Hello,

I am Choi Jong-ha, a lawyer at Cheongchul Law Firm.

What happens when a situation changes after notifying the worker of their 'pass'?

Employers often cancel hiring for various reasons. The employee who originally intended to leave may end up not leaving, or a planned expansion of the business may get postponed. In such cases, can we tell the person we were considering hiring, 'I'm sorry, but let's work together on a better opportunity next time'?

The court views the cancellation of a hiring decision after the employer has set specific employment conditions and the employee has accepted the offer as a termination. More specifically, the Seoul Administrative Court stated, “The employer's recruitment of workers corresponds to the invitation to make a labor contract, and the employee responding to the recruitment process meets the conditions for the application of a labor contract. When the employer notifies the employee of final acceptance and hiring through the selection process, it should be considered that the intention to accept the labor contract has been expressed. This is likewise true in the case of so-called 'employment confirmation' where the employer decides on hiring well before the actual provision of labor and payment of wages. Therefore, by notifying the employment confirmation, a labor contract relationship is established between the employer and the employee, and if the employer later cancels the employment confirmation, it is practically a termination,” it has been ruled.

In other words, even if the employee goes to work and the employment contract has not been formally written, it is considered that a labor contract has already been established. Generally, if the start date, salary, and job responsibilities are already determined, it is common to view it as 'the cancellation of the employment confirmation equivalent to a termination'.

So, what should be done if we want to cancel the employment confirmation after it has already been made—i.e., after notifying the pass?

As mentioned earlier, the cancellation of the employment confirmation is judged similarly to a termination, thus (1) there must be objective and reasonable grounds that can be deemed as inappropriate for the formal hiring of the confirmed individual, and (2) the fact, timing, and reason for the cancellation of the employment confirmation must be communicated in writing. In practice, the legitimate grounds for canceling an employment confirmation are applied more leniently than the grounds for terminating already hired employees. The Seoul High Court ruled that it was justified to cancel the employment confirmation when it was later confirmed that the required experience was insufficient as stated in the announcement (Seoul High Court ruling 2020. 4. 22. 2019Nu58034). However, it would be difficult to recognize a cancellation of employment confirmation based on business reasons such as 'the need for hiring has disappeared'.

If the cancellation of the employment confirmation is viewed as a termination, should we pay 30 days' worth of wages as severance pay, just like a termination?

Unfortunately (or fortunately), the obligation to notify of termination under Article 26 of the Labor Standards Act does not apply if the period of continuous employment is less than 3 months. In other words, there is no obligation to notify in advance or to pay severance pay instead of notifying for someone who has not yet had any work period as a confirmed hire.

Cheongchul Law Firm consists solely of lawyers from the top five large law firms in the country, prosecutors, and corporate legal teams, where specialized lawyers in relevant areas collaborate as a team to provide responses. Cheongchul provides comprehensive legal consulting solutions that go beyond just resolving specific issues, focusing ultimately on achieving what the client desires. If you need assistance in achieving your goals, feel free to contact Cheongchul.