Understanding Cultural Differences at Work Between Korea and the
West
Labor Attorney Jung, Bongsoo
I. Introduction
While Korea has been making free trade agreements (FTAs) with the
United States and the European Union, more and more foreign
companies have been establishing branches in Korea. Companies here
are hiring more foreign professionals in an effort to enhance their
competitiveness in the markets of advanced nations. While working
in the same company or workplace, it is very common for
disagreements or misunderstanding to arise between Koreans and
Westerners due to differences in culture, occupational habits and
language. It is very difficult to understand our counterparts if we
do not understand the cultural characteristics that have formed
over long periods of time, which of course can lead to an
atmosphere that is not conducive to business. There are many
differences in the way we think and behave at work, such as the
kind of hierarchy we are familiar with, the way we relate to each
other through linguistic expression, the way we address each other,
and the way we express our opinions. I would like to deal with this
issue through one tragic case involving culture, and the opinions
of some foreigners living and working in Korea. II. Culture: the
Secret Behind a Plane Crash
At about 1:42 am on August 6, 1997, a Korean Air passenger plane
approached Guam Airport and attempted to land, but because of the
low visibility due to stormy weather and pilots’ accumulated
tiredness, the plane went off the runaway and crashed into a small
hill nearby the airport. This accident resulted in the deaths of
228 of the 254 passengers onboard. As the pilots were trying to
land, they could not see the runway due to the poor weather. When
the ground proximity alarm sounded at 500 feet (152 meters), the
co-pilot suggested gently "Let's give up the landing." When the
pilot did not do so, the co-pilot said again, strongly this time
"No visibility, give up the landing!" The pilot then gave up trying
to land, but it was too late: the plane continued to descend and
crashed. If the co-pilot had spoken in a commanding voice instead
of a suggestion, the pilot would have understood the emergency
situation they were in, and prevented the crash.1
After David Greenburg from Delta Air was hired by Korean Air to be
a flight safety manager, he discovered the fundamental causes for
this tragedy: the complicated ways of expressing 1 Malcolm
Gladwell, “Outliers” Chapter 7, page 252, (The Ethnic Theory of
Plane Crashes)
2
oneself in the Korean language and Korea’s vertical hierarchy. His
approach was to create a rule for Korean Air pilots: they must
speak English. “The official language in Korean Air is English. If
you want to continue to work as a Korean Air pilot, you must be
able to speak English fluently.” English does not have such strict
rules regarding politeness, and emotional authority between
positions and ages is not as high as in Korea. In the ‘Power
Distance Index,’ which indicates the degree of authority people in
higher social positions have over those in lower positions, Korea
places among the highest, while the US places among the lowest.
Although a pilot and co-pilot work in a situation which requires
them to operate a plane together in cooperation, Korean pilots have
a very clear vertical hierarchy of superior and subordinate,
putting the co-pilot in a position of obedience to the pilot. The
pilot can discipline his co-pilot by hitting his hand for minor
mistakes, something taken for granted. In addition, this vertical
hierarchy includes complicated expressions of language. The
superior talks down to the subordinate while the subordinate talks
in high forms to the superior. For example, using the lowest form
of language includes orders “you will do this”; talking in low form
would be “do this”; talking in high form would be “please do this”;
talking in the highest form would be “would you please do this?”
Under such a strict vertical hierarchy and the required forms of
expression, a subordinate cannot simply point out his superior’s
mistakes, but must speak indirectly in a way that does not offend
the superior.
Since Korean Air began employing Mr. Greenburg, accidents have
almost ceased and the company was able to restore confidence, both
internally and in terms of how other entities view Korean Air. Mr.
Greenburg changed the cultural atmosphere inside the cockpit by
insisting on the use of English, hiring more civilian pilots to
join an organization made up mostly of former military pilots, and
standardizing technical terms and conversational methods. By making
adjustments to these organizational cultures, Korean Air has been
able to prevent similar plane crashes, and has become an example of
air safety for other airlines. On April 10, 2010, a plane with the
Polish president, Lech Kaczynski, aboard, crashed while trying to
land at a Russian airport in very foggy conditions, killing 97
passengers. One of Poland’s major daily papers, Gazeta Wyborcza,
introduced Korean Air and its recent safety history. “During the
late 1990s, Korean Air faced a crisis: Air France and Delta Air
were requesting the airline leave their alliance, and the American
Federal Aviation Agency (FAA) had given it a very poor safety
rating. However, Korean Air was able to get through the crisis with
the help of safety consultants. The answer was to ‘speak English.’
Korean culture demands such a high form of respect for superiors or
seniors that a co-pilot could not address directly the fact that a
pilot was making a mistake. But through English communication, the
airline was able to work around this strong hierarchical structure
rooted in the Korean language ‘trap’.”
3
III. Cultural Differences Related to Position and Age 1. Cultural
differences: position
In Korea, addressing someone by their title or position is
important. People at work call each other by their job positions,
while westerners use first names, or Mr., Mrs., or Ms., plus family
names for respect. In western culture, position titles only
indicate persons-in-charge, and are not used when addressing that
person. Mr. or Mrs. is acceptable regardless of someone’s position,
with first names used once two people are on friendly terms. In
Korea, title indicates status, so if someone is addressed in a way
that is not suitable for his age or position, he or she may be
offended and feel they are being talked to as an inferior. Sales
employees introduce themselves using a title that is higher than
their own, to give themselves authority in the eyes of customers.
Following are some titles used in Korean companies when addressing
other persons or describing their positions.
Korean Titles Chinese Titles Pronunciation English Title Hway jang
Chairman Dae pyo isa Representative Director Sa jang President Bu
sa jang Vice President Jun moo isa Executive Managing Director Sang
moo isa Managing Director Isa Director Bu jang General (Senior)
Manager Cha jang Manager Gwa jang Section Chief (Manager) Dae ri
Assistant Manager Sa won Employee
2. Cultural differences: age
In Western culture, people can be friends with whomever they want,
while in Korea you can only call someone your friend if he or she
is the same age as you. In Western culture, people keep in mind the
age difference and give respect where it is due, but nevertheless
they are free to befriend anyone they please. In the Korean work
environment, to be in a higher position than someone older than you
is
4
difficult because age is very important. To be young and in a
higher position than someone older puts you in a predicament
because you are not able to conduct yourself as that person’s
senior as they may think there’s nothing to learn from you or you
have no authority to lead them because you are younger. In western
cultures, positions in the workplace are more respected than
here.
IV. Cultural Differences Related to Behavior
Here are examples of cultural differences related to behavior that
I collected from expatriates living and working in Korea. 2 1. “In
Korea it is polite to decline something that is offered to you and
maybe on the 2nd or 3rd time it is offered you accept it. In
western culture if something is offered to you and you want it you
can gladly accept it the first time it is offered.” 2. “Also in
Western culture, the use of “thank you” is much more common than in
Korean culture. It is quite common for friends, spouses, and family
members in Korea not to say thank you to each other for little
gifts, for giving someone something they requested etc., whereas
this would be quite rude in Western culture. We even say “thank
you” to the salesperson at a store when we buy something, for
giving us our change.” 3. “In Korea when people eat they have to
wait for the oldest member to eat first (in family) or the teacher
(in school/institute) before they can start eating. In Western
culture it doesn’t really matter.” 4. “If a Korean knows you then
they’re extremely kind and helpful but if they don’t know you they
ignore you like you don’t exist. In Western culture people are
relatively friendly even if they don’t know each other: e.g.
they’ll greet and start a conversation, etc.” 5. “Saying ‘OK OK OK’
or ‘Yeah yeah yeah’ in English can be extremely rude. In Korea, it
just means ‘I really understand or ‘Yes, right away.’ In English it
means ‘OK, shut up. I don’t want to hear what you are saying.’” 6.
“Koreans cannot confront their superiors directly (for example,
when they feel they have been treated unfairly, or the superior is
doing something in the wrong way). Westerners usually can, and do.”
7. “In Western culture, a graduate school student can discuss
freely, ask questions, and provide opposing opinions about his/her
major subjects to his/her academic advisors (professors), but in
Korea his/her professors are so authoritarian that the student
cannot
2 Opinions of cultural differences are provided by expatriates who
have lived more than two years in
Korea. They are: an Italian PhD candidate at Sookmyung Women’s
University, a Canadian employee of
Daewoo Ship Building Co., an Italian embassy staff member, a South
African native English teacher at
SDA, and a Polish employee of SBNTECH.
5
oppose their opinions, and so generally accepts their opinions
unequivocally.” 8. “A common mistake for Koreans is to say ‘Mr.
Shawn’ or ‘Miss Jennifer.’ In English, we don’t use the first name
with ‘Mr.’ or ‘Miss etc. We use the family name instead. So, Shawn
Stenson would be ‘Mr. Stenson,’ and Jennifer Beal would be ‘Miss
Beal’ or ‘Mrs. Beal’ (if she’s married).”
V. Conclusion
The cultural differences between Korea and the West are very wide,
go very deep, and reach into a huge variety of situations. If
employees are unable to come to a cultural understanding of these
differences, even in this Global Era, then Koreans and expatriates
working together will have to settle for a relationship of ‘close
in proximity, but distant in relationship’. When cultural
differences are allowed, accepted, and understood, employees can
work better, more constructively, and in greater cooperation. With
a partnership based on this acceptance, Korean employees can work
well with foreign expatriates, improve their own work efficiency
and help the company increase its competitiveness with leading
companies from around the world.
6
Labor Attorney Kim, Suehee
Korean Companies are based on the hierarchy system. You may know
the job title in Korean such as ‘Kwa Jang’,’Bu Jang’, ‘Dae Ri’.
These job titles are related to seniority-based years of service
and loyalty. Here is the case you may already know, which can show
a hierarchical atmosphere of the Korean company.
“A plane carrying the Polish president and dozens of the country`s
top political and military leaders to the site of a Soviet massacre
of Polish officers in World War crashed in western Russia on 10
Apr, 2010, killing everyone on board. The accident happened at the
moment that Russia and Poland were beginning to come to terms with
the killing of more than 20,000members of Poland`s elite officer
corps in the same place 70years ago. But the commemorational event
became another national tragedy happening in the same place 70years
apart. “
I think most people still remember this accident of the Polish
president`s plane. After the accident, opinions loomed large about
the cause of the jet crash. One of the news articles attracted my
attention. The Gazeta Wyborcza, the Polish daily newspaper, said
that Poland needs to learn from South Korea that reduced a plane
accident by improving its culture of hierarchical relations. It
says that Korean Airline had consecutive plane crashes at the end
of 1990s, the company faced a crisis as a result of those
accidents. Then, the Korean Air scouted David Greenberg as a vice
president in 2001. The vice president changed the official language
spoken in the company from Korean to English and recruited a
civilian aviator. Afterwards the company regained its credibility
both inside and outside of the country as the plane crash rates
dropped to near zero. You might think why simply changing language
can work. Many foreigners in Korea say that they find Korean people
can make friends only with those who are in the same age as them.
And there are certain ways people call each other depending on
their ages like Oppa(when woman calls an older man) or Un-ni(when
woman calls an older woman) instead of calling their names.
I think it is because of the form of the Korean language and the
influence of the Confucian culture. Korean language has honorifics.
So if you do not use it properly, you might be considered impolite.
And also Korean society is influenced by the Confucian culture.
Confucianism was the ruling principle during the Joseon
dynasty(1392~1910). Confucian manners became the fine customs in
the traditional society but it had negative effects of having
formalism all the time.
6
During the Joseon dynasty, Korea basically had a rigid class
system, and there were various
classes in that system, conforming to Confucianism: Yangban(noble
class), Jungin(in-between nobleman and farmers), Pyeongmin(farmers,
manufacturers, merchants) and Nobi(slaves). The scope of entering
the workforce and intermarriage was limited, and the clothes and
even languages were different based on the class they belong to. So
the vertical class order was established firmly in society and
Confucianism inculcated respect for elders.
The relationship between people at work place can more complicated
than in your private life because of your position and age. If you
are younger and in a higher position than your men, you might have
trouble with the person as he/she does not follow your order or
accept your idea because you are younger than her/him.
When Some Korean companies recruit new employees, they hire the
people in consideration of the employees` age because the company
does not want to have problem with the existing vertical culture
based on age. However, many companies are changing this vertical
culture nowadays. Changing the way of speaking may serve as a
tipping point of big change. However, it can influence your work as
you may speak more directly and honestly to others.
7
Disguised Outsourcing Cases and Criteria for Judgment Labor
Attorney Jung, Bongsoo
I. Introduction
Issues surrounding the use of irregular workers in Korea began with
the introduction of two legal provisions during the Asian economic
crisis in 1998: ‘dismissal for managerial reasons’ in the Labor
Standards Act and the Employee Dispatch Act. The increased use of
irregular workers by companies hoping to save on labor costs and
ensure flexibility in management of personnel has resulted in
greater polarization of society. As this polarization has worsened,
laws designed to protect and benefit irregular employees began
coming into effect in July 2007, with the aim of encouraging
employers to hire them as regular employees. The main thrust of the
laws is to limit the use of irregular employees to two years, and
eliminate any discrimination between them and regular employees
doing the same work. Even though the laws have restricted the
increase in the use of irregular workers, many companies have been
using loopholes in the laws to continue hiring irregular employees.
There have been two recent cases heard by the Supreme Court which
provide good examples of this. In this article, I would like to
look at the details of the Supreme Court rulings and review the
criteria used in making their decisions.
II. Dismissal of Employees Outsourced to Hyundai Mipo Shipbuilding
Company 1. Summary
Hyundai Mipo Shipbuilding Company (hereinafter “the Shipbuilder”)
terminated its service contract with Yongin Company (hereinafter
“the Subcontractor”) when a labor union was established inside the
Subcontractor. Right after termination of this contract, all 30
employees (hereinafter “the applicants”) of the Subcontractor were
dismissed, and the company closed down on January 31, 2003. The
applicants filed a “claim for confirmation of employee status”
against the Shipbuilder. Busan Appellate Court rejected this claim
on the grounds that the service agreement between the Shipbuilder
and the Subcontractor could be recognized as an outsourcing
contract, but the Supreme Court overturned the Appellate Court’s
decision, stating that it was possible to recognize the Shipbuilder
and the Subcontractor’s employees as having an implied employment
contract.
2. Supreme Court Ruling (July 10, 2008, Supreme Court
2005da75088)
A. Legal principles for implied employment: As a person hired by
the original employer provides labor service for a third party at
the third party’s location, to be regarded as an employee of the
third party, his employment shall satisfy the following: 1) The
original employer does not have independence in management and
works as an agent of the third party in managing employees; 2) The
original employer’s business entity is nothing more than formal and
nominal, and the employee
8
shall be subordinate to the third party in reality; 3) The party
that actually pays wages to the employee is the third party; 4) The
party to which the person provides labor service is the third
party. Based on these criteria, it should be concluded that there
was already an implicit employment contract made between the
employees and the third party (Supreme Court, Sep 23, 2003
2003du3420).
B. Confirmed facts: The Subcontractor where the applicants had been
employed had worked exclusively for the Shipbuilder as an
outsourcing partner to inspect and repair marine engine heat
exchangers, safety valves, etc. for the previous 25 years. The
Shipbuilder required that employees who wished to work for the
Subcontractor pass a skills test before being hired by the
Subcontractor. They were then qualified to receive an additional
allowance directly paid by the Shipbuilder. Furthermore, the
Shipbuilder had substantive authority for employment and promotion
of the Subcontractor’s employees, including the ability to demand
disciplinary action or choosing candidates for promotion. In
addition, the Shipbuilder directly monitored the applicants’
attendance (including if they left work early), leaves, overtime,
hours worked, and their work attitude. The Shipbuilder also
determined the volume of work, working methods, work orders, and
when and how the applicants would cooperate, and directly assigned
work duties or placed applicants for substantive work duties
through the Subcontractor’s responsible manager. The Shipbuilder
required the applicants to complete its own work assignments in
addition to work given by the Subcontractor, paying a certain wage
even when there was no work from the Subcontractor by assigning
other duties such as receiving education, cleaning of the
workplace, and assisting other departments in their work. The
Shipbuilder directly supervised and managed the applicants.
Furthermore, the Subcontractor was, in principle, supposed to
receive a service fee calculated by multiplying each time unit by
the volume received, to which the Shipbuilder added the wages paid
when Subcontractor employees were engaged in other
Shipbuilder-assigned work not directly related to the Subcontractor
duties (such as fixing the marine engines). The Shipbuilder also
paid bonuses and severance pay directly to the applicants.
While the Subcontractor handled income tax deductions, income
reports, and bookkeeping for its employees under its own business
name and registration, it used offices provided by the Shipbuilder,
as well as all required facilities such as rooms for its own
employee education. C. Judgment: Upon review of the confirmed facts
in B above, and based on the legal principle mentioned in A, it can
be determined that even though the Subcontractor had made a formal
outsourcing contract with the Shipbuilder and had a formal
structure in which its own employees (the applicants) performed the
necessary labor service, the Subcontractor did not substantially
manage itself in terms of work performance or management of its
business. The Subcontractor worked just like a department of the
Shipbuilder would, or as a labor management agency for the
Shipbuilder. Rather, as it is assumed that the Shipbuilder received
subordinate labor service from the applicants and
9
decided their working conditions (including wages), an implied
employment should be estimated to exist between employees of the
Subcontractor and the Shipbuilder, just as if the Shipbuilder had
hired the applicants directly. III. Disguised Outsourcing Case of
Hyundai Motors Company 1. Summary
While Yesung Company (hereinafter “the Subcontractor”), an in-house
outsourcing company of the Hyundai Motors Factory – Ulsan
(hereinafter “HMC”), was engaged in assembling automobile parts, it
dismissed its 15 employees (hereafter “the applicants”) on February
2, 2005, due to union activities. The applicants then filed for
‘remedy for unfair dismissal and unfair labor practices’ against
HMC and the Subcontractor, immediately after the Subcontractor
closed down. The applicants’ claims were not accepted in the lower
courts, who determined that the Subcontractor, who had already
closed down, was their real employer, and not HMC. While the
Supreme Court did not determine an implied employment relationship
existed between HMC and the Subcontractor, it determined that a
dispatch relationship did. According to the Employee Dispatch Act
before its revision, in cases where a dispatched employee has
served more than two years, the applicant is determined to be a
direct employee of the using employer. 2. Supreme Court Ruling
(February 23, 2012, 2011du7076) A. Legal principles for employee
dispatch: Whether employment is employee dispatch or not shall,
regardless of the formal and nominal contract made between the two
parties, be determined by collectively considering the purpose of
the contract or job characteristics, specialty and technology,
business registrations of the contracting parties and managerial
independence, and the using employer’s actual command and control.
B. Confirmed facts: Of the work processes directly and indirectly
necessary to produce cars, assembly on the conveyer belt system
does not require the Subcontractor to possess much in the way of
technological or specialized skills, and the Subcontractor can give
few instructions to its employees in this process.
The applicants were placed on either side of the conveyor belt
assembly line together with regular employees of HMC, carrying out
simple and repetitive tasks according to the various instructions
prepared and distributed by HMC, and using HMC’s own facilities,
parts, and supplies. In this manufacturing process, the
Subcontractor did not supply its own unique technology or make
capital investment.
HMC possessed the general rights to give the applicants their work
duties and change their work area, and determined the volume of
work to be finished, working methods and working procedures. HMC
directly managed the applicants or indirectly gave them substantial
work orders through an on- site manager of the Subcontractor. In
considering the characteristics of the applicants’ work, the
10
responsibility of the on-site manager was simply as the messenger
of HMC orders to the applicants. HMC decided the starting and
finishing times of each work shift, recess hours, overtime and
night
work, shift duties, the pace of manufacturing, etc., for the
applicants, and in cases where HMC’s regular employees were absent
due to occupational accidents or leaves, the applicants would fill
in. C. Judgment: The Appellate Court ruled that, based upon legal
principles for employee dispatch and the confirmed facts, the
employees were, in actuality, working under HMC’s direct
supervision after hiring by the Subcontractor and dispatch to HMC.
IV. Criteria for Evaluation 1. Guidelines for determining “employee
dispatch”3 A. Employment relations: 'Employee dispatch' refers to a
business situation where the 'Sending Employer', who acts as an
employee dispatch agency, hires an employee and sends him/her to a
third party (the ‘Using Employer’) according to the employee
dispatch contract. The dispatched employee carries out his/her
duties in accordance with the using employer’s directions at the
using employer’s workplace.
B. Judgment method 1) Whether employment is subject to rules under
‘employee dispatch’ shall be determined by
whether the sending employer who made the employment contract with
the employee can retain the substantive entity of “employer”. 2) In
cases where the sending employer is not considered to have the
substantive entity of
“employer”, the using employer (who did not hire the dispatch
employee) shall be judged as having directly hired the dispatch
employee. 3) In cases where the sending employer is considered to
have the substantive entity of “employer”,
the situation of the corresponding employee shall be investigated
as to whether he/she is under the direction or authority of the
using employer. The corresponding employment contract shall also be
evaluated to determine whether his employment is direct or
dispatch.
C. Criteria for judgment
1) Determination of a sending employer as having the substantive
entity of “employer” If the sending employer does not have
authority over the following items, it is unlikely that
he/she
shall be considered as having the substantive entity of “employer”:
Rights to hire, dismiss, etc.;
3 Joint guidelines of the Ministry of Labor and the Ministry of
Justice, April 19, 2007
11
Responsibility to raise funds and make the necessary expenditures;
An employer’s legal responsibilities (the four social security
insurances, corporate taxes, etc.); Responsibility for providing
machinery, facilities, tools and instruments; and Responsibility
and authority to make plans related to professional skills and
experience.
2) Judgment on directions and orders from the using employer If the
using employer has authority over the following items for a
dispatched employee, the sending
employer has engaged that employee in work under the direction and
authority of the using employer: Decision-making regarding work
assignments and transfers; Directing and supervising work;
Monitoring sick leaves and other types of leave etc. and the right
to take disciplinary action; Evaluating work performance; and
Decision-making regarding assignment of overtime, holiday and night
work. 2. Guidelines for auditing internal outsourcing (July 2004,
The Ministry of Labor) A. Employment relations: Outsourcing is a
business situation where one party promises to complete a
particular work, and the other party promises to pay compensation
in return for completing that work (Civil Law, Article 664).
Internal outsourcing (subcontracting) is a type of outsourcing
where a company (the Contractor) assigns a certain task or tasks at
its workplace to a Subcontractor, who is to complete the
work.
B. Method and criteria for judgment
If the Subcontractor’s situation does not satisfy the criteria of
both ‘independence in personnel management’ and ‘independence in
management of business,’ the Subcontractor shall be regarded as an
‘employee dispatch business.’ 1) “Independence in personnel
management” refers to the Subcontractor being the source of
work
instructions to its employees and being the exclusive manager of
the following items: Hiring, dismissing etc.; Decision-making
regarding work assignments and transfers; Directing and supervising
work; Jurisdiction over working methods and evaluation of work
performance; Whether the Subcontractor’s employees work with the
Contractor’s employees, and the difference of work between them;
Monitoring sick leave and other forms of leave, etc.; Decision-
making regarding assignment of overtime, holiday and night work;
Other conditions determining status as an employer according to the
Labor Standards Act and the Labor Union Act.
2) “Independence in management of business” refers to the
Subcontractor carrying out its work duties independently from the
Contractor in terms of the following:
12
Responsibility to raise funds and make the necessary expenditures;
Retention of an employer’s legal responsibilities; Responsibility
for providing machinery, facilities, tools and instruments; and
Planning, professional skills and experience.
V. Conclusion The two cases in this article are typical examples of
disguised outsourcing. The first, with Hyundai
Mipo Shipbuilding, shows the most common disguised subcontract
where, despite the fact that an outsourcing service contract was
made between the two parties, an implied employment relationship
existed, in light of the lack of Subcontractor independence in
personnel management or management of business. The second, with
Hyundai Motors, deals with an illegal employee dispatch. Even
though a service contract was evidently recognized between the two
parties, the Contractor was the one who directed and supervised
both its own and the Subcontractor’s employees while they worked
together in the conveyor belt assembly line, which, again, means
there was no subcontractor independence.
13
Driver of Director Paid Less than Statutory Allowances Labor
Attorney Jung, Bongsoo
I. Introduction4 The exclusive driver of a director (hereinafter
referred to as “the Employee”) of Company A (hereinafter referred
to as “the Company”) resigned after serving approximately 6 six
years, and filed a petition to the Ministry of Employment &
Labor for severance pay owed him, as well as statutory allowances
for overtime, night, and holiday work, which were significantly
different than what he received from the Company. The Employee was
hired by the Company on September 29, 2005 as a temporary employee
and driver of the director’s car. He renewed his employment
contract every year for four years, after which the Company made
him a dispatched employee of another company due to the limitations
on continued employment of fixed-term employees, and had him
continue doing the same duties. The Employee resigned on August 13,
2011, after working two additional years. The reason the Employee
filed the petition is because the Company just paid a fixed
allowance for overtime exceeding the fixed overtime and holiday
work. These fixed allowances were much lower than the allowances
calculated by the Labor Standards Act, and the same situation
existed for his severance pay. The legal issues in this labor case
were 1) overtime and holiday work allowances for an intermittent
worker, 2) method used in calculation of overtime, night, and
holiday work, 3) who was the employer responsible for payment of
overtime for him as a dispatched employee, 4) Statute of
Limitations regarding unpaid wages, and 5) method used in
calculating average wages for severance pay. II. Details of the
Petition 1. The company’s fixed allowance and statutory requirement
As the director’s exclusive driver, the Employee’s working hours
were according to the director’s work schedule. While employed, the
Employee constantly worked overtime hours exceeding the contractual
working hours of 8 hours per day and 40 hours per week, as
stipulated in the employment contract. Working hours were
stipulated as between 9 am and 6 pm, with a one hour recess during
that time. Wages included basic pay and a certain allowance which
was set to cover a fixed overtime of two hours every day. For
overtime, night, and holiday work, a fixed allowance was paid of a
minimum 5,000 (for daily overtime exceeding 2 hours) and a maximum
80,000 (for holiday work exceeding 8 hours). 4 Mr. Park Kyuhee of
KangNam Labor Law Firm handled this petition case from Nov 2011 to
Feb 2012.
14
The calculation of statutory allowance according to the Labor
Standards Act is not to pay a fixed allowance stipulated in the
employment contract, but to multiply the number of overtime and
holiday working hours with ordinary hourly wages, and then add 50%
additional statutory allowance.
The Employee’s employment contract: Article 2 (wages) Wage
details
Basic pay 2,086,000
Total 2,869,000 / month
Overtime allowance for hours before 8 pm is replaced with the fixed
OT allowance
in above.
5,000 for overtime beyond 8 pm, but before 10 pm;
10,000 for overtime beyond 10 pm, but before 12 am;
20,000 for overtime past 12 am.
40,000 for holiday work of 4 hours or more; 80,000 for holiday work
of 8 hours
or more. (However, no pay will be given for fewer than 4
hours.)
Related examples follow:5 1) Regular work day: Arrived at 6 am on
Wednesday, Nov 19, 2008. Started driving and finished at
2 am the following day for a total of 11 hours overtime and 4 hours
night work. à Payment from the Company: 20,000 fixed overtime
allowance. à Statutory allowance: 150% of 9 hours excluding 2 hours
already included in the fixed OT allowance, plus 50% of 4 hours for
night work. That is, 13.5 hours for overtime and 2 hours for night
work equal 15.5 hours. Ordinary hourly wages of 9,980 x 15.5 hours
= 154,690. As 20,000 was already paid, 134,690 is the amount
due.
2) Saturday work6: Arrived at 7:30 am on Saturday, May 30, 2009,
and finished working 12:20 am that night for a total of 16 hours
overtime and 2.5 hours for night work. à Payment from the Company:
Regarded as holiday work exceeding 8 hours, so 80,000 was paid as a
fixed allowance. à Statutory allowance: 150% of 16 hours, plus 50%
of 2.5 hours for night work. That is, 24 regular hours for the
overtime and 1.25 (1¼) hours for night work equals 25.25 hours.
Ordinary hourly wages of 9,980 x 25.25 hours = 251,995. As 80,000
was already paid, 171,995 is due.
3) Sunday work: Arrived at 5:30 am on Sunday, September 20, 2009,
and finished working at 10:30 pm for a total of 16 hours holiday
work, 8 hours for overtime and 30 minutes for night work. à Payment
from the Company: 80,000 in fixed holiday allowance.
5 Working details were recorded in “car operation details” and
calculated by the Company. 6 Calculation of ordinary hourly wages:
Monthly ordinary wage ( 2,086,000) / Monthly contractual working
hours (209) = 9,980
15
à Statutory allowance: 150% of 16 hours for holiday work, 50% of 8
hours for overtime, and 50% of 8 hours for night work. That is, 24
regular hours for holiday work, 4 hours for overtime, and 0.25
hours for night work for a total of 28.25 hours. Ordinary hourly
wages of 9,980 x 28.25 hours = 281,935. As 80,000 was already paid,
201,995 is the amount due.
2. Calculation of average wages to calculate severance pay
The Employee’s employment contract stipulates, “30 days’ average
wages as severance pay are payable to employees who serve one year
or more, upon contract expiry.” In calculating average wages, the
Company included only the basic pay and fixed OT allowance into the
total amount of wages received for the three months prior to the
date of resignation, excluding other allowances. In addition, the
Company also paid his severance pay every year when his employment
contract was renewed. The average wages calculated under the Labor
Standards Act shall include not only basic pay and fixed OT
allowance, but also meal and statutory allowances like overtime,
night work, and holiday work. The Employee requested that the
excluded allowances be calculated as part of his severance
pay.
3. Details of unpaid wages (1) Unpaid statutory allowances:
93,961,874
Employment Actual Payment Statutory
Dispatch Co B Sep 09~Aug 11 18,900,000 100,378,312 81,478,312
(2) Unpaid severance pay: 10,946,582 Employment Daily Average Wages
Severance Pay Difference
Company A
(3) Total amount claimed: 104,908,456
7 Due to the three year Statute of Limitations, the Employee only
claimed what was due for the applicable period. 8 As the employment
contract was renewed each year, severance pay was paid yearly, so
severance pay for the previous three years has been claimed.”
16
III. Major Issues 1. Overtime and holiday work allowances for an
intermittent worker
Generally, drivers of directors have long working hours, with the
majority of these hours spent waiting, so it is not really fair to
consider a driver’s working hours as equal to a regular employee’s
working hours. Due to this, companies who receive permission, can
be exempt from paying additional overtime and holiday work
allowances. However, the Company in this case did not receive
exemption from the Minister of Employment & Labor, so statutory
allowances cannot be excluded, and the driver’s allowances shall be
recalculated according to the Labor Standards Act.
The Labor Standards ActArticle 63 (Exceptions to Application)
The provisions as to working hours, recess, and holidays shall not
be applicable to workers who are
engaged in any of the work described in the following
subparagraphs: 3. surveillance or intermittent
work, for which the employer has obtained the approval of the
Minister of Employment & Labor.
Administrative GuidelineKungi 68207-1215, Oct 2, 2003
Even though the work characteristic is surveillance or intermittent
work, if the employer has not
obtained approval from the Minister of Labor, provisions in the
Labor Standards Act concerning working
hours, recess, and holiday shall apply.
2. Method of calculation for overtime, night work, and holiday work
The Company paid fixed allowances for the driver’s overtime, night
and holiday work. However,
until obtaining approval for exemption “for a surveillance or
intermittent worker”, the Company shall pay additional statutory
allowances for overtime, night and holiday work exceeding the legal
standard working hours just like it would for ordinary workers. In
cases where the Company pays fixed allowances for overtime, night
and holiday work, if the fixed allowances exceed the statutory
allowances, it is allowed. However, if the fixed amount is lower
than statutory allowances, the Company shall pay the additional
amount.
3. Employer responsible for payment of overtime for dispatched
employees
Article 34 of “The Act Relating to Protection, etc. for Dispatched
Workers” (Special cases relating to application of the Labor
Standards Act) regulates that the sending employer is regarded as
the employer responsible for matters concerning employment and
wages, and that the using employer is regarded as the employer for
matters concerning working hours. Accordingly, the sending employer
directly determined and paid such wages as monthly salary, meal
allowances and the fixed overtime allowance stipulated in the
Employee’s employment contract, but the using employer paid the
Employee additional variable overtime allowances exceeding the
fixed overtime allowance, as decided by the Company’s regulations
(according to its car operation records). Therefore, the using
employer shall be responsible for statutory allowances for
additional work performed as requested by the Company.
17
4. Status of Limitations regarding unpaid
According to Article 49 of the Labor Standards Act (Prescription of
Wages), as the statute of limitation to exercise a claim for wages
is three years, the Employee can claim his unpaid statutory
allowances and severance pay for the past three years, and not the
past six. 5. Method of calculating average wages for severance
pay
Severance pay is calculated based upon average wages, and upon the
total amounts paid in meal, overtime, night work, and holiday work
allowances, but the Company intentionally excluded these.
1) As long as the meal allowance is paid periodically and
uniformly, this cannot be pure welfare or a
bonus expressing favor, but shall be regarded as money
characteristic of wages paid as remuneration for
labor service. (Supreme Court, 2001do1186, May 15, 2001)
2) As the total wages calculated for average wages are any money
and valuable goods an employer
pays to a worker for his/her work, what the worker receives
continuously and regularly, and what the
employer has to pay according to the collective agreement and Rules
of Employment, regardless of how
such payments are termed, the holiday work allowance shall be
included [in calculation of severance pay].
(Supreme Court 91da5587, April 14, 1992)
3) As the overtime allowance is not money paid under friendly and
favorable conditions, but rather, is the
remuneration that the employer has to pay for an employee’s work,
regardless of its label, the overtime
allowance shall be included into average wages when calculating
severance pay. (Seoul District Court
2005na175, May 26, 2005)
IV. Conclusion This petition case for unpaid allowances is a case
of wages that were unpaid due to the HR manager’s ignorance of
labor law and lack of work-related preparation. The Company
concluded this case by paying the difference between what they had
already paid in fixed amounts and the statutory allowances
occurring due to actual work. Through this case, the Company
learned to recognize the fact that wages remained unpaid from a
neglect to follow the procedural rules and calculation methods
under labor law, even though the company paid enough regular wages.
This case happened because the Company was used to paying fixed
allowances for overtime, night
and holiday work over a long period of time, due to the convenience
of calculation. 1) If the Company had adjusted its wages by
reducing the basic pay and increasing fixed allowances, or 2) if
the Company had previously submitted to the Labor Office “an
application for exemption for surveillance and intermittent
workers” and received the necessary approval while keeping the
current wage system, there would have been no problem related to
unpaid wages. Accordingly, companies are required to understand the
wage rules in the Labor Standards Act first, before establishing
their wage systems.
18
Criteria for Determining Whether Forced Resignation is Agreed
Resignation or Dismissal
Labor Attorney Jung, Bongsoo
I. Introduction
There are two ways to terminate employment: one is voluntary
resignation and the other is dismissal, which is a unilateral
decision by the employer. Resignations do not cause labor disputes
as the employee chooses to resign, whereas dismissals require a
justifiable reason in accordance with Article 23 of the Labor
Standards Act since they terminate the employment relationship
without mutual consent.
Forced resignations are in the grey area between resignation and
dismissal, and refer to cases where the employee does not wish to
quit but must submit a letter of resignation at the employer’s
insistence, whereupon the employer terminates the employment
relationship. In this case, it would seem that there would be no
labor dispute about whether this was a dismissal or not because the
employer simply terminated the employment by accepting the letter
of resignation submitted. In relation to this, the Civil Law
(Article 17: Declaration of Untrue Intention) stipulates, “A
declaration of intent shall be valid, even if the declarant has
made it with the knowledge that such declaration is different from
his intent: Such declaration of intent shall be void if the other
party was aware, or should have been aware, of the real intent of
the declarant.” Judicial rulings have shown that if an employer
receives letters of resignation from all employees but dismisses
them selectively, such terminations are considered dismissals,
whereas if employers pay certain employees a voluntary early
retirement bonus and, in return for that, receive a letter of
resignation before engaging in managerial dismissals due to urgent
business reasons, these are considered mutually agreed
resignations.
There are no substantial or stipulated criteria for determining if
forced resignations are agreed resignations or de facto dismissals,
resulting in frequent labor disputes. I would like to look at
related cases and review the legal criteria for such
determinations.
II. Cases Determined to be Dismissals
In cases where an employee was unilaterally forced by the employer
to submit a resignation letter to the company, the resignation can
be invalidated because it was not the employee’s actual intent to
resign. Judicial rulings have shown that when an employer forced an
employee to submit a letter of resignation and terminated the
employment based upon the received letter of resignation, this was
considered de facto dismissal as the decision to terminate
employment was a unilateral employer
19
decision. In addition to this, dismissal without justifiable reason
is equal to unfair dismissal.9 Following are some cases where
resignation was considered de facto dismissal.
1. Employee unable to enter the country if a resignation letter was
not submitted
An employee who was working overseas had to enter the country to
undergo medical treatment for an illness, but the company insisted
that he submit a letter of resignation if he wished to enter the
country, and so he did so, although that was not his original
intent. In this case, the employee’s letter of resignation was not
considered a valid reason for termination of employment.10
2. All employees submitted letters of resignation, after which the
company terminated employment with all of them
A company’s quality team was strongly criticized by the quality
management director for quality problems. The quality team held a
meeting where they decided that the entire team would submit
letters of resignation to the board members to show their desperate
determination to improve their work. The letters of resignation
were not meant to express an actual intention to resign, but to
apologize for the quality problems collectively, and express their
intention to not repeat those mistakes. However, the company
accepted their letters of resignation and terminated employment
with everyone on the quality team. Included were low-ranking
employees who had to submit the letters of resignation in
solidarity with the other members of the quality team (including
the quality management director and the team leader). This
termination was judged as unfair dismissal.11
3. All employees submitted letters of resignation, but the company
only terminated selected employees.
A company received an order from the supervisory office to
terminate a certain number of employees, and in implementing this
order, the company forced all employees to submit letters of
resignation. The applicant for remedy of unfair dismissal had to
submit a letter of resignation along with his other coworkers,
against his will. The company then terminated employment for six
employees. This case was considered a dismissal because employment
was, in reality, terminated by unilateral decision of the employer.
12
4. Personnel at the managerial level or higher were forced to
submit letters of resignation, which the company accepted
9 Supreme Court ruling on July 12, 1991, 90da11554 10 Supreme Court
ruling on Sep 1, 1992, 92da26260 11 Seoul Administrative Court
ruling on Nov 25, 2008, 2008guhap27674 12 Supreme Court ruling on
Feb 9, 1993, 91da44452
20
A company president ordered all senior managers to submit letters
of resignation so that they could get recognition from the chairman
of the board. All managers had to submit their resignations against
their will, which the company accepted, and terminated employment
with all of them. These terminations were ruled to be unilateral
dismissals by the company president.13
5. A company terminated employment with all employees after
receiving their letters of resignation, and hired them again
All employees had to submit letters of resignation according to
company business policy. The company accepted these resignations
and terminated employment relations. They were then rehired. Since
there was no gap in time between their resignations and rehiring,
it was determined that the employees had not truly intended to
resign when they submitted their letters of resignation, and that
the employer was aware that the employees resigned only on the
condition of reemployment. Therefore, the company’s terminations
based upon the letters of resignation were not valid. 14 6. An
employee was transferred only after submitting a letter of
resignation, in accordance with company policy
In cases where an employee transfers from the parent company to its
subsidiary, or from the subsidiary to the parent company, whether
continuous employment exists or not depends on whether he actually
intended to resign or is simply following company requirements that
he resign before such a transfer. If the employee submitted a
letter of resignation to the parent company or the subsidiary with
the real intention of terminating the employment relationship,
received severance pay and later was hired by the parent company or
its subsidiary again, it can be regarded that his employment with
the previous entity has been terminated. However, if the employee
had to resign and be rehired by the company according to the parent
company’s unilateral policy, and so submitted a letter of
resignation (without really intending to terminate the employment
relationship), even should the employee receive severance pay, the
employment shall not be considered terminated as the employee had
no intention to do so in actuality. 15
7. Employees with poor performance results forced to quit by the
employer Korea Rural Community Corporation was required to downsize
its workforce in accordance with a government management innovation
plan. The Corporation selected some employees to terminate without
rational or fair criteria, and forced them to submit letters of
resignation. These forced
13 Supreme Court ruling on Apr 29, 1994, 93nu16185 14 Supreme Court
ruling on May 10, 1988, 87daka2578 15 Supreme Court ruling on
1997.03.28, 95 51397
21
resignations were considered to be dismissals since they were done
by unilateral decision of the employer.16
III. Cases Determined to be Agreed Resignations The criteria for
determining agreed resignation refer to conditions where the
employee submits a
letter of resignation without really desiring to resign, but
resignation is admittedly in his or her best interest. This may be
considered agreed resignation. The following legal principle can be
used as criteria for judgment.
Even though an employer forces an employee to submit a letter of
resignation against his will, then accepts the resignation and
terminates employment, this may not be dismissal, but an agreed
resignation. The employee outwardly expressed his intention to
resign as fitting the situation, even though that was not his real
intention. Therefore, even though he did not want to resign, if he
judged that expressing his intention to do so was the best thing he
could do under the circumstances, it can be understood that his
real intention was to express regret, not actually resign.17
1. Voluntary resignation in relation to dismissal for managerial
reasons Even though the employees of a certain company did not wish
to resign, they submitted letters of
resignation as they seemed the best plan of action when
collectively considering the economic situation, the company’s
redundancy plans, and the company’s early retirement bonus, and the
interests of both sides. The employment relationship between the
employees and the company was terminated on the basis of agreed
resignation after the employees submitted letters of resignation as
recommended by the company. 18 2. An employee submitted a letter of
resignation on the basis of forced resignation rather than
resigning for disciplinary reasons
Even though an employee at another company did not wish to resign
at the time he submitted a letter of resignation, he chose his best
option, which was to avoid disciplinary dismissal and resign, as a
way of gaining severance pay and future employment rather than seek
judgment on the validity of disciplinary dismissal under those
circumstances. The letter of resignation was considered to be valid
as his resignation corresponded to his expression of his true
intention.19
16 Supreme Court ruling on Jun 14, 2002, 2001du11076 17 Supreme
Court ruling on Apr 25, 2003, 2002da11458 18 Supreme Court ruling
on Apr 22, 2002, 2002da65066 19 Supreme Court ruling on Apr 25,
2000, 99da34475
22
V. Conclusion Whether an employee submits a letter of resignation
without real intent is dependent upon whether
his true intentions were understood and accepted. If they weren’t,
then the employer shall take responsibility for unfair dismissal,
whereas when an employee’s letter of resignation is determined as
true intent, no issue related to unfair dismissal will occur as it
is then regarded as an agreed resignation or honorary
resignation.
Judicial rulings provide us with the following criteria: If an
employer terminates the employment relationship with an employee
who submits a letter of resignation under pressure from the
employer,
or who is forced to do so, this is a termination of the employment
contract by unilateral employer decision, and will be considered a
dismissal. However, even should an employee not truly wish to
resign but does so as his best choice under the given situation, it
will not be considered a dismissal.
Kangnam labor law firm hompage www.k-labor.com
23
The Adjudication Committee and the Mediation Committee of the Labor
Relations Commission
Labor Attorney Jung, Bongsoo
I. Introduction (Purpose) The Labor Relations Commission is
established both to identify unfair dismissals and unfair labor
practices in labor relations and to implement adjustments for
disputes between company and labor union interests promptly and
fairly. As these labor disputes are dynamic, continuous, and
collective, if administrative agencies or courts were the only
organizations to handle them, fair, prompt, and reasonable
solutions would be difficult to expect, due to the inflexibility of
bureaucracy and lack of experience of some agencies. The Labor
Relations Commission is an independent administrative agency that
has the authority and the ability to resolve labor disputes fairly
and promptly. Here, I would like to review the composition of the
Adjudication and Mediation Committees within the Labor Relations
Commission: what issues they handle, the procedures they follow,
and the outcomes. II. The Adjudication Committee of the Labor
Relations Commission 1. Composition of the Committee
The Adjudication Committee shall be composed of three members
(including a chairperson or one standing commissioner) designated
by the Labor Relations Commission chairperson from among the public
interest representatives in charge of adjudication, and shall deal
with matters which require adjudication, resolution, approval or
recognition, etc., of a Labor Relations Commission in accordance
with the Labor Union Act, the Labor Standards Act, the Act on the
Labor-Management Council Act and other laws. (Article 15 of the LRC
Act)
2. Procedural Details (1) Summary Major issues decided upon by the
Adjudication Committee are unfair dismissals and unfair labor
practices. The procedures for dealing with applications for remedy
regarding unfair dismissals or unfair labor practices are as
follows:
1. Application for remedy received à 2. Fact finding, inspection
(investigation & inquiry), and Recommendation for
Reconciliation (Case ended when both parties reach reconciliation.)
à 3. Adjudication Hearing à 4. Adjudication Committee decision:
rejection or order for remedy à 5. Either
24
party can appeal to the National Labor Relations Commission within
10 days from the date when the order for remedy is received à 6.
Either party can appeal National Labor Relations Commission
decision to the Administrative Court within 15 days from the date
the reexamination results are received. If no application for
reexamination is made or no administrative lawsuit is filed within
the prescribed periods, the order for remedy, dismissal decision or
decision on reexamination shall be confirmed. The effect of orders
for remedy, dismissal decisions or review decisions made by the
Labor Relations Commission shall not be suspended by an application
for review to the National Labor Relations Commission or by the
initiation of an administrative suit.
<Procedures for Requesting Remedy for, and Review of Unfair
Dismissal, etc.>
25
(2) Application for Remedy Regarding Unfair Dismissal, etc. 1) If
an employer dismisses a worker unfairly, the employee may apply to
the Labor Relations Commission for remedy. The application for
remedy shall be made within three months from the date on which the
unfair dismissal and related acts took place. 2) The Labor
Relations Commission and its jurisdiction: The employee shall apply
to the Labor Relations Commission nearest his/her workplace for
remedy regarding unfair dismissal or unfair labor practice.
(3) Inspection, Investigation and Recommendation for Reconciliation
1) The Labor Relations Commission shall, without delay, conduct the
necessary investigation and inquiry of the parties concerned, upon
receipt of an application for remedy. When conducting the inquiry,
the Labor Relations Commission may, at the request of the parties
or by virtue of its own authority, have witnesses appear before the
Commission, and interview them on pertinent matters. The Labor
Relations Commission shall also provide sufficient opportunities
for the parties concerned to present evidence and to cross-examine
witnesses. 2) The Chairman of the Labor Relations Commission that
receives the application shall, without delay, form an Adjudication
Committee of three public interest representatives, appoint an
investigating officer who will be in charge of the case, and inform
the applicant of the next stages of the adjudication: preparation
of written documents, adjudication by a single commissioner, and
recommendation for reconciliation. 3) The investigating officer
shall, upon completion of the investigation, issue a report of the
actual facts and each party’s claims, and shall hold an
adjudication hearing to be held within 60 days after filing of the
case. 4) Recommendations for reconciliation: the revised Labor
Relations Commission Act in 2006 stipulated the reconciliation
system to promote resolution of disputes through mutual settlement
by the two parties. In the past, an informal reconciliation system
existed in labor cases on unfair dismissal and unfair labor
practice, but as there was no legal backing, some dispute arose
when endeavoring to understand the systems’ legal effect. Now that
this system has been stipulated in law, the statement of
reconciliation has the same effect as reconciliation decided by a
court, in accordance with the Civil Procedure Act.
(4) Calling of the Adjudication Hearing The Adjudication Hearing is
initiated upon attendance of all three public interest committee
members, as well as one committee member representing the employee
and one representing the employer. The Adjudication Hearing shall
be open to the public, unless the Committee decides otherwise. The
Chairman shall select witnesses and have them come to the
Adjudication Hearing. Both parties shall be given opportunity to
examine and cross-examine witnesses.
26
(5) Adjudication and Resolution Upon conclusion of the Adjudication
Hearing, a judgment meeting shall be held. The Adjudication
Committee is held when all three public interest committee members
are present, and resolutions shall be passed upon approval by two
of the three committee members. Public interest committee members
shall sufficiently consider the opinions provided by the employee
and employer representative committee members, as well as the
opinions mentioned in the open discussions, etc. Decisions shall be
made by majority vote.
1) Adjudication statements
#1: Application for remedy regarding unfair dismissal (Order for
Remedy)
1. The employer in this case shall agree that dismissal for the
applicant on
Month/Day/Year was an “unfair dismissal”.
2. The employer in this case shall reinstate the employee within 30
days from the day this adjudication
statement is received and shall pay an amount not less than the
amount of wages he/she would have
received if he/she had worked during the period after he/she was
dismissed.
#2: Application for remedy regarding unfair dismissal (Dismissal /
Rejection)
The application by the employee in this case is dismissed or
rejected.
#3: Application for remedy regarding unfair dismissal (Order for
monetary compensation)
1. The employer in this case shall agree that dismissal of the
applicant on
Month/Day /Year was an “unfair dismissal”.
2. The employer in this case shall pay an amount not less than the
wages the applicant would have
received if he/she had worked during the period after he/she was
dismissed, in lieu of ordering his/her
reinstatement within 00 days from the date this remedy order is
received.
#4: Application for remedy regarding unfair labor practice (Order
for Remedy)
1. The employer removing labor union notices on the bulletin board
of the labor union office on
Month/Day/Year is determined as an unfair labor practice:
domination of or interference with labor
union activities.
2. The employer in this case shall post a notice apologizing for
the removal of the notice without
permission and shall post a notice on company bulletin boards that
such actions will not be repeated.
#5: Application for remedy regarding unfair dismissal & unfair
labor practice (Orders for
Remedy)
1. The employee’s dismissal by the employer in this case on
Month/Day/Year is determined as an
“unfair dismissal” and the related discrimination as “unfair labor
practice”.
27
2. The employer in this case shall reinstate the employee
immediately and shall pay an amount not
less than the wages he/she would have received if he/she had worked
during the period after he/she
was dismissed.
3. The employer shall post a notice on company bulletin boards
declaring that such dismissals will not
happen again.
#6: Application for remedy regarding unfair dismissal & unfair
labor practice (Orders for
Remedy for Dismissal, but Rejection of Unfair Labor Practice
application)
1. The employee’s dismissal by the employer in this case decided on
Month/Day/Year is determined as
an “unfair dismissal”.
2. The employer in this case shall reinstate the employee
immediately and shall pay an amount not
less than the wages he/she would have received if he/she had worked
during the period after he/she
was dismissed.
3. Other applications are rejected.
#7: Application for remedy regarding unfair dismissal & unfair
labor practice (All applications
rejected)
All applications that the employee and labor union submitted are
rejected.
2) Monetary compensation system The monetary compensation system
was introduced so that employees not wishing to be reinstated can
still receive remedy. Under the monetary compensation system, the
Labor Relations Commission may order the employer to pay the
employee an amount not less than the wages he/she would have
received if he/she had worked during the period after he/she was
dismissed, in lieu of ordering an employee’s reinstatement. The
amount equivalent to wages (or more) includes some additional
compensation as well, which shall be determined by the Labor
Relations Commission after considering such things as any employee
fault, and degree of unfairness of the dismissal, etc. This
monetary compensation system has contributed to employee rights by
providing alternative methods for receiving remedy for unfair
dismissals.
3. Enforcement Levy An enforcement levy is the penalty that the
Labor Relations Commission charges to an employer who fails to
comply with the “order for remedy” and/or a “decision on
reexamination concerning an order for remedy”. The enforcement levy
is 20 million or less per dismissed person, and can be levied twice
a year for two years for non-compliance, up to a maximum 80 million
per person. However, if the employer wins the case in the end, the
enforcement levies that the employer has paid will be
returned.
28
III. Mediation Committee of the Labor Relations Commission
1. Summary The Mediation Committee refers to public mediation that
both parties shall go through before the labor union takes
industrial action (Article 45 of the Labor Union Act). The term
“labor disputes” in the Labor Union Act means any controversy or
difference arising from disagreement between the employer and the
labor union concerning the determination of terms and conditions of
employment such as wages, working hours, welfare, dismissal, or
other treatment, etc. Accordingly, the Mediation Committee in the
Labor Relations Commission shall deal with disputes concerning each
party’s interests, but disputes related to each party’s rights
shall not be subject to bargaining or mediation procedures.
2. Composition of Mediation Committee The Mediation Committee shall
be composed of three members (an employer representative, employee
representative, and a public interest representative. The Mediation
Committee members shall be designated by the Chairperson of the
Labor Relations Commission from among members of the Labor
Relations Commission concerned so that each Mediation Committee
member can represent employers, workers, and the public interest.
The employee representative shall be chosen from a list recommended
by the employer, and the employer representative shall be shall be
chosen from a list recommended by the labor union. However, in
cases where a list of recommended Mediation Committee members is
not submitted within three days prior to a meeting of the Mediation
Committee, the Chairperson may designate the members him or
herself. The Chairperson of the Mediation Committee shall be the
public interest representative. Special Mediation Committees shall
be composed of three public interest representatives.
29
Employer
↓
↓
Mediation Committee (for general purposes) Special Mediation
Committee (public services,
essential public services)
1 employer representative, 1 employee representative, 1 public
interest representative The employer representative and the
employee representative are cross-recommended.
↓
↓
5) Advance mediation
↓
Meeting opened, participants confirmed, and committee members
introduced Investigator: summary of major dispute(s) , Voicing of
opinions from both parties and Committee Q&A session
Mediator’s proposal Discontinuance of mediation Administrative
guidance
Takes effect upon acceptance by both parties.
If the employer and the union are divided greatly on the issue,
the
process ends with no proposal being made.
For mediation that concerns a
matter not subject to mediation.
30
Mediation done
Industrial action possible
No eligible party Return Industrial action
impossible No justification for Industrial action Return Industrial
action
impossible Lack of
Employer side reason
Industrial action possible
Employee side reason
Industrial action impossible
(1) Mediation Activities The Mediation Committee or a single
mediator, as the case may be, shall specify a date for the parties
concerned to appear so as to verify the main points of their
respective claims. The Chairperson of the Mediation Committee may
restrict attendance to the hearing to the parties concerned and
witnesses. The Mediation Committee shall prepare a proposal to be
presented to the parties concerned, with recommendation for their
acceptance. If the Mediation Committee determines that further
proceedings are not warranted due to the parties' refusal to accept
the proposal, it shall terminate mediation and notify the parties
concerned. If an application for mediation is determined as
unsuitable for mediation or arbitration, the Labor Relations
Commission shall inform the applicant of the reasons for rejection
of the application and other possible courses of action
(Administrative order).
(2) Interpretation and Implementation of the Mediation Committee
Proposal If the parties concerned, after accepting the Mediation
Committee proposal, do not agree on any of the interpretation or
implementation measures of the proposal, they shall request the
Mediation Committee to provide clarity. Upon receiving such a
request, the Mediation Committee shall clarify the measures within
seven days of the date of receipt of such request. None of the
parties concerned shall conduct industrial action on issues for
which clarity on interpretation or implementation has been
requested, until such clarity is rendered by the Mediation
Committee.
(3) Effect of Mediation Committee Proposal If the parties accept
the Mediation Committee proposal, all members of the Mediation
Committee shall prepare the mediated agreement in writing, and sign
or seal it together with the parties concerned. The labor disputes
shall be considered resolved, and the mediated agreement shall have
the same effect as a collective agreement. Clarity on the
interpretation and implementation measures rendered by the
Mediation Committee shall have the same effect as an arbitration
ruling.
31
Employment insurance Industrial accident
insurance
Employees aged 18 or older but
younger than 60 All employees
Those excluded Employers, foreigners Employers
Employees who have worked less than 1
month
month
In principle, they shall be covered,
depending on their nationalty.
Standard monthly income
- Employment security/Vocational ability development program: total
wage x 0.25~0.85%
Total wage × 0.006~0.177
Standard monthly income
development program
expenses, injury/disease compensation
Ministry of Health and
32
Request for Interim Severance Payment 1. I hereby request payment
of an interim severance pay for the period
below, which I have worked thus far:
Period: (May 1, 2011 through April 30, 2012)
1.1. My reason for applying for the interim severance pay is
(Please check the reason in the box below. Also, attach document(s)
verifying your reason): ( ) 1. Where an employee who did not own a
house has purchased a house; ( ) 2. Where an employee or his/her
dependent family member has received medical
care for six months or more; ( ) 3. Where an employee has received
a decision for commencement of a
rehabilitation proceeding under the Debtor Rehabilitation and
Bankruptcy Act; ( ) 4. Where an employee has been declared bankrupt
under the Debtor Rehabilitation
and Bankruptcy Act; or ( ) 5. Where other reasons and conditions
prescribed by the Ordinance of the Ministry
of Employment and Labor, such as natural disasters, armed
conflicts, etc., are met.
2. I understand that the consecutive period to be used for
calculation of the amount of severance pay accumulated hereafter
shall be reckoned anew from the time when balances are
settled.
3. This request is made solely at my discretion and for my needs
and I
hereby swear not to take any civil or criminal legal action
pertaining to this request and payment.
May 31, 2012
Employee: (Signature) ID:
AAA KOREA LIMITED
33
Paid Time-Off System The Union Activity Review Commission (UARC)
determined the maximum number of
paid time-off hours at a conference attended by labor, management
and public committee representatives on May 1, 2010, which was
announced on May 14 by the Ministry of Labor and will be
implemented from July 1, 2010.
Wage subsidy for full-time union officers is prohibited, but if the
collective agreement stipulates such subsidy, activities for which
full-time union officers receive a subsidy from the employer are
allowed within the maximum number of paid time-off hours regulated
by the Ministry of Labor. If there is no such stipulation in the
collective agreement, full-time union officers’ activities shall
not be subsidized financially in principle.
Number of Union Members
Maximum Number of Part-Time Union Officers
Fewer than 50 Up to 1,000 hours (0.5)
Companies with fewer than 300 union members: in cases where paid
time-off is split between part-time officers, the number of
part-time union officers shall not exceed three times the number in
parentheses.
Companies with 300 union
members or more: in cases where paid time-off is split between
part-time officers, the number of part-time union officers shall
not exceed two times the number in parentheses.
50 ~ 99 Up to 2,000 hours (1 )
100 ~ 199 Up to 3,000 hours (1.5)
200 ~ 299 Up to 4,000 hours (2)
300 ~ 499 Up to 5,000 hours (2.5)
500 ~ 999 Up to 6,000 hours (3)
1,000 ~ 2,999 Up to 10,000 hours (5)
3,000 ~ 4,999 Up to 14,000 hours (7)
5,000 ~ 9,999 Up to 22,000 hours (11)
10,000 ~ 14,999 Up to 28,000 hours (14)
15,000 or more
Until June 30, 2012: 28,000 hours (14) + 2,000 hours (1) per each
unit of 3,000 members
After July 1, 2012: Same as above, with a ceiling of 36,000 hours
(18)
1) “Number of Union Members” refers to the total number of union
members at an identical business or workplace.
2) 2,000 Time-Off Hours required to maintain one full-time union
officer. (considering 2,088 hours = 40 hours per week x 52 weeks +
8 hours; annual leave)
When a worker is, without justifiable cause, dismissed, laid off,
suspended, transferred, had his wages reduced or placed under any
other punitive action, he may request remedial action from the
Labor Relations Commission.
, , , , .
Procedures to Request for Remedy and Review for Unfair Dismissal,
etc.
for dismissal, etc.
D is m is s a l
Dissatisfaction
Dissatisfaction
Dissatisfaction
Dissatisfaction
survey &
interrogation
Dissatisfaction
National Labor
Relations Commission
Employer Applicant
