Dismissing Low-Performing Employees Under Korean Labor Law

Article 23, Part 1 of the Korean Labor Requirements Act (근로기준법) stipulates that an worker can’t be dismissed with out simply trigger. 

Article 23 (Restriction on Dismissal)

(1) An employer shall not, with out justifiable trigger, dismiss, lay off, droop, or switch an worker, scale back his or her wages, or take different punitive measures (hereinafter known as “unfair dismissal, and many others.”) towards him/her.

Nevertheless, the regulation doesn’t prohibit the “justifiable trigger” for dismissal to solely disciplinary actions. Subsequently, if there’s a justifiable trigger, it’s potential to dismiss the worker whose efficiency or job competency is considerably missing (known as “low-performance dismissal”). On this article, we’ll discover key issues relating to low-performance dismissal based mostly on current rulings by the Korean Supreme Courtroom.

Supreme Courtroom’s Standards for Justifying Low-Efficiency Dismissals

Within the landmark case, Supreme Courtroom Determination, February 25, 2021, 2018Da253680, the Supreme Courtroom established the factors for figuring out the legitimacy of low-performance dismissals. These standards are as follows:

1. Goal and Honest Analysis: The employer’s evaluation of the worker’s efficiency or job competency should be based mostly on honest and goal requirements.

2. Incapability to Enhance and Proceed Employment: The worker’s efficiency or job competency should be considerably under the anticipated degree for a chronic interval, to the extent that persevering with the employment is now not viable. This consists of conditions the place there may be little to no potential for enchancment sooner or later.

Elements that ought to be thought-about in figuring out whether or not the worker’s efficiency is inadequate to proceed the employment embody: 

The worker’s place and the character of their duties,
The anticipated degree of efficiency or experience required for the function,
The extent and length of the worker’s poor efficiency,
Whether or not the employer offered alternatives for enchancment (resembling coaching or reassignment),
Whether or not the worker’s efficiency improved after being given the chance to enhance,
The worker’s angle and conduct,
The general circumstances of the office.

Latest Case Legislation on Low-Efficiency Dismissals

1. Supreme Courtroom Determination, December 28, 2023, 2021Du33470

The current resolution by the Supreme Courtroom on December 28, 2023, upheld the factors established within the 2021 ruling and validated a low-performance dismissal in step with these ideas. Key information from the case embody:

The worker, who had been with the corporate for 25 years, was chargeable for cost-saving operations and was anticipated to carry out at a excessive degree given his function and seniority.
Over the 11-year interval from 2007 to 2017, the worker’s efficiency and job competency have been under normal, with a efficiency rating of 11,222nd out of 11,229 staff within the final three years.
Regardless of being positioned in a efficiency enchancment plan (PIP) for seven instances, the worker continued to carry out poorly and failed to enhance regardless of a number of alternatives for coaching. The corporate tried to reassign the worker to different responsibility, however the worker refused.

2. Decrease Courtroom Determination Acknowledged Low-Efficiency Dismissals

The Seoul Central District Courtroom’s resolution on Might 18, 2023, 2021Gahap544824, acknowledged the legitimacy of the dismissal, citing the next circumstances, in a case the place the worker had principally acquired a D grade from 2016 to 2018 and was topic to a low-performance program, and was given a number of alternatives to enhance, however was dismissed resulting from lack of enchancment.

Goal and Honest Analysis: There isn’t a proof to counsel that inappropriate analysis standards have been deliberately utilized to drawback the worker
Incapability to Enhance and Proceed Employment:

The worker carried out poorly, resembling accessing the pc community solely throughout the analysis interval, steadily left work for lengthy intervals of time with out supervisor approval, which was identified however didn’t enhance.
Didn’t submit a report in any respect within the first low performer program, and submitted an enchancment plan within the second low performer program, however didn’t do any precise enchancment work.
Was provided the chance to switch to a different division and proceed working there, however was rejected resulting from lack of competence and lack of willingness to enhance throughout each the paperwork and interview course of.

3. Decrease Courtroom Determination Rejected Low-Efficiency Dismissals

There are instances the place courts denied the legitimacy of the dismissal on the grounds that the analysis was not goal and honest. In a case the place a member of a creative troupe was dismissed after receiving the second lowest ranking in a periodic analysis for 3 consecutive years, the Seoul Administrative Courtroom discovered it tough to consider that the periodic analysis was carried out pretty, noting that the member was not given a chance to make a protection in relation to the analysis (Seoul Administrative Courtroom, August 19, 2021, Determination 2020Guhab83553). The court docket additionally identified that there have been no inside controls in place to stop arbitrariness in evaluations, such because the disclosure of analysis scores and attraction procedures (Seoul Administrative Courtroom, Jan. 13, 2023, Determination 2022Guhap51079).

There are additionally instances the place courts denied the legitimacy of dismissal as a result of there isn’t any proof to objectively acknowledge poor work efficiency of the worker. In a case the place an worker was dismissed for receiving the bottom grade twice in a row, the Seoul Administrative Courtroom dominated that the bottom grade was at all times acquired by 5% of the evaluated staff, so it couldn’t be concluded that the worker’s efficiency was objectively poor, and no particular knowledge was submitted to point out how low the efficiency was (Seoul Administrative Courtroom, February 10, 2023, Determination 2022Guhap51161).

There are additionally instances the place courts have rejected the legitimacy of dismissal on the grounds that no alternative for enchancment was given. The Seoul Northern District Courtroom held that there was no particular proof that self-discipline or coaching had been offered as much as the time of the dismissal discover, and subsequently, it was tough to conclude that the worker was given the chance to enhance their work efficiency via coaching or reassignment (Seoul Northern District Courtroom, July 11, 2023, Determination 2021Na40738).

Necessary Concerns for Employers in Low-Efficiency Dismissals

From the case regulation offered, there are a number of key factors for employers when contemplating low-performance dismissals:

1. Burden of Proof: The burden of proving the legitimacy of the dismissal lies with the employer. The employer should current proof that the dismissal is justified, and that the worker’s efficiency was sufficiently poor to warrant it.

2. Goal and Honest Analysis Standards: It’s essential for employers to make sure that their efficiency analysis requirements are each goal and honest. Employers ought to keep away from utilizing subjective or biased standards. Moreover, staff ought to be given a chance to attraction or contest their efficiency evaluations if mandatory.

3. Periodic Evaluations: Employers ought to implement common and constant efficiency evaluations. This helps present a transparent file of the worker’s efficiency over time and ensures that the analysis standards are utilized persistently.

4. Offering Alternatives for Enchancment: Employers are required to supply staff with enough alternatives to enhance their efficiency. This will likely embody providing coaching, reassignment, or different remedial actions. A failure to supply such alternatives may undermine the justification for dismissal.

5. Consideration of Worker Attitudes: Worker attitudes, together with their willingness to enhance and cooperate, ought to be documented and brought into consideration. A scarcity of cooperation or poor angle throughout the efficiency enchancment course of can strengthen the case for dismissal.

6. Compliance with Inside Procedures: Even in instances of low-performance dismissal, employers should be sure that all inside procedures, resembling disciplinary actions or reassignment efforts, are correctly adopted. In some instances, it could be essential to revise the corporate’s inside guidelines to make clear the procedures for dismissals.