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Justified and Unfair Dismissal
- Legal Standards and Practical Responses -

Bongsoo Jung, labor attorney at KangNam Labor Law Firm

I. Introduction

Employers say they must dismiss problematic employees to protect their organizations, while employees complain of losing their livelihoods without explanation. Dismissal is both an exercise of managerial authority and a measure directly affecting employees’ livelihoods. Cases filed with the Labor Relations Commissions increased by more than 10% annually: 21,691 in 2023, 24,265 in 2024, and 26,806 in 2025. Although these include unfair labor practices, discrimination correction, and labor dispute mediation, more than 80% concern dismissal.^[1]

Article 23(1) of the Labor Standards Act prohibits dismissal without justifiable cause. An employee who considers a dismissal unfair may apply to the competent Regional Labor Relations Commission for relief within three months of dismissal (Article 28). Under Article 51 of the Rules of the Labor Relations Commission, hearings should generally be held within 60 days of filing, subject to extensions for postponement requests or lengthy investigations. Service of the written decision can take another 30 days after the hearing. A dissatisfied party may appeal to the National Labor Relations Commission within 10 days of receiving the decision. This process is relatively prompt and accessible compared with court litigation. Labor specialists decide cases through hearings and deliberations, and enforcement penalties promote compliance with remedial orders.^[2]

The justification for dismissal can be summarized in three questions: Why is dismissal necessary? Is it disproportionate to the misconduct? Were the procedures required by law and the Rules of Employment observed? This article examines these standards and actual cases, offering preventive guidance to employers and potential remedies to employees.

II. Three Standards Distinguishing Justified and Unfair Dismissal

First, the grounds for dismissal. Embezzlement seriously damaging workplace order, repeated refusal of lawful work instructions, or persistent unauthorized absence may justify dismissal. But mere inconvenience to the company or personality conflicts with a supervisor do not necessarily establish a breakdown of trust. Courts consider the nature of the business, job duties, motives and circumstances of misconduct, its impact on workplace order, and the employee’s usual conduct.^[3]

Second, proportionality of discipline. Even if misconduct occurred, whether dismissal?the most severe sanction?is necessary is a separate issue. One mistake differs from repeated violations despite corrective instructions. It matters whether retraining, warnings, reassignment, or lighter discipline offered a chance to resolve the problem.

Case: Even proven misconduct does not make dismissal anything but a last resort

Serious misconduct such as embezzlement, assault, or disclosure of confidential information may undermine trust between employer and employee. However, misconduct varies in gravity. Immediate dismissal for a single minor mistake may be excessive. A court found that dismissal for one minor violation constituted an abuse of disciplinary discretion.^[4]

Conversely, dismissal of a managerial employee who neglected duties for an extended period following reassignment and failed to improve despite repeated warnings and personnel measures was upheld. The distinction was not simply the number of violations: severity, prospects for improvement, opportunities offered by the company, and the possibility of restoring the employment relationship were all assessed.^[5]

Third, dismissal procedures. Statutory written notice is a requirement for dismissal to take effect. Procedures stipulated in the Rules of Employment or collective bargaining agreement, including disciplinary committee composition, an opportunity to respond, and prior notification, must also be followed. Thirty days’ advance notice or payment in lieu of notice is separate from the substantive justification for dismissal. Paying an allowance does not make an unfair dismissal lawful.

Case: Failure to follow procedure can defeat a dismissal even where grounds exist

A language institute orally dismissed two instructors for insufficient qualifications and claimed to have sent text messages and ordinary mail afterward. It failed to establish that proper written notice had been given. Without reaching the merits, the Labor Relations Commission found the dismissals unfair for procedural violations and ordered monetary compensation for each employee. The key was failure to give lawful written notice specifying the reasons and effective dates.^[6]

In another case, a taxi company had grounds to discipline employees for abusive language, but its review was conducted only by employer representatives rather than the labor-management disciplinary committee with equal representation required by the collective agreement. The discipline was found unfair. Companies must follow their own rules even when inconvenient.^[7]

III. Assessing Justification in Different Dismissal Cases

1. Probation Is Not a Period of Unrestricted Dismissal

Is it sufficient to say “You are not a good fit” at the end of a three-month probationary period? Employers may have broader discretion to assess probationary employees’ suitability for regular employment than in ordinary dismissal. However, the assessment must be objective and reasonable, and written notice under Article 27 of the Labor Standards Act is still required.

In a translator’s case, the employer conducted interim and final assessments, and the employee signed an evaluation form recording the end of the employment contract. Considering individual interviews and the employee’s attitude, the Labor Relations Commission found no unilateral dismissal. Yet signing an evaluation does not always establish termination by mutual agreement. If the employer terminates unilaterally, written notice of the reasons and effective date is required.^[8]

2. Workplaces with Fewer Than Five Employees Require a Different Starting Point

The dismissal restrictions and written-notice obligations under Articles 23(1) and 27 generally apply to workplaces regularly employing at least five employees. Some rules, including advance notice and settlement of wages, also apply to smaller workplaces. Thus, “anything goes with a small workforce” is incorrect: civil, contractual, and other statutory liabilities may remain.

In an unfair-dismissal case at a small Japanese-affiliated company, the applicant claimed six workers including executives. The Commission excluded two directors who independently performed services under mandate agreements, finding fewer than five actual employees and dismissing the application without considering the merits. Actual status matters more than titles or names on a roster.^[9]

3. Freelancers Are Protected If They Are Employees in Substance

Even a “Service Agreement” or “Freelance Agreement” may constitute employment where work is directed at fixed times and places, substitutes are prohibited, and payment compensates labor itself. The Supreme Court recognized native-speaking instructors as employees despite their service agreements and business-income tax payments because they were controlled through institute rules, performance assessments, and schedules.^[10]

Employers should examine actual supervision and work arrangements instead of relying on contract titles. Employees should preserve attendance records, work-instruction messages, evaluations, and payment records.

4. Expiration of a Fixed-Term Contract Does Not Always End Employment

A fixed-term contract ordinarily ends upon expiration. However, renewal provisions, repeated renewal practices, or employer representations may create a legitimate expectation of renewal, making the reasonableness of refusal relevant. Conversion to indefinite-term employment after more than two years under the Fixed-Term Employees Act must also be assessed alongside statutory exceptions. Ignoring renewal practices and relying solely on the contractual end date can cause disputes.

Withdrawal of an employment offer also requires care. If final acceptance has been communicated, onboarding documents submitted, and an employment relationship effectively formed, withdrawing the offer before work begins may constitute dismissal. A court invalidated a company’s withdrawal of offers without justifiable cause after it postponed successful applicants’ starting dates for several months.^[11]

5. “We Explained It Verbally” Is No Substitute for Written Dismissal Notice

A dismissal notice should state not only the effective date but sufficiently specific grounds for the employee to understand what happened, when, and how. Abstract phrases such as “company circumstances,” “poor attitude,” or “insufficient ability” readily create disputes. Inventing additional reasons after the fact is also risky.

As a rule, dismissal requires at least 30 days’ advance notice or payment of at least 30 days’ ordinary wages, with statutory exceptions including service shorter than three months. Written dismissal notice is a separate validity requirement. Therefore, even paying an allowance in lieu of notice does not cure the absence of written notice or justifiable grounds.^[12]

Employees should preserve the notice and record its stated reasons, actual delivery date, dismissal date, and previous warnings rather than refuse the document. Employers should retain evidence of delivery and service.

6. Recommended Resignation or Coerced Dismissal?

A resignation letter does not necessarily end a legal dispute. Requiring all employees to submit resignations but accepting only some may amount to dismissal if employment ends against their genuine wishes. Conversely, voluntary acceptance of early retirement after considering terms and disadvantages may constitute termination by agreement. Sufficient time for consideration and clear terms protect both sides.^[13]

7. Poor Performers Should First Have an Opportunity to Improve

Can an employee be dismissed simply for ranking last in sales? A low relative ranking does not prove inability to perform the job. Dismissal for poor performance requires consideration of objective evaluation criteria, seriously deficient performance over a substantial period, training and reassignment efforts, opportunities to improve, and prospects for recovery.^[14]

A performance improvement plan (PIP) should explain evaluation criteria in advance, establish attainable goals, measurement methods, and support resources, and document interim meetings and feedback. A PIP does not automatically justify dismissal. Impossible targets imposed to force resignation may instead become evidence of unfair dismissal.

When assessing dismissal for weak sales or appraisals, consider market changes, account allocations, assigned territory, customer information, and support staff?factors beyond the employee’s individual control.

Employees should document performance evidence, project responsibilities, insufficient company support, and changes in evaluators. Employers should guard against evaluator bias and apply consistent standards.

8. Workplace Harassment and Sexual Harassment: Findings and Disciplinary Severity Must Be Distinguished

On receiving a harassment complaint, employers should promptly investigate, protect the complainant, and maintain confidentiality. The complaint alone should not be treated as conclusive grounds for dismissal. Examine the conduct, repetition, power relationships, harm, and objective evidence, then impose proportionate measures if misconduct is established.^[15]

Where an employer ignored an employee’s sexual-harassment complaint and instead imposed unfounded discipline and disadvantageous standby assignment, the court recognized damages for secondary victimization and breach of the employer’s protective duty. Protection does not end with accepting a report. The accused must also be informed of specific allegations and given an opportunity to respond.^[16]

9. Workplace Rule Violations and Collective Action Must Be Assessed in Context

Repeated refusal of lawful instructions or unauthorized absence seriously disrupting operations may justify discipline. However, if an instruction violates law or the employment contract, or stems from an unjustified transfer, refusal cannot be judged in isolation. Private conduct and outside employment should be assessed in light of actual interference with workplace order and job performance.^[17]

Collective action is neither automatically protected nor punishable simply because it involves a union. Its purpose, timing, procedures, and methods must be examined. Retaliation for lawful union activity is prohibited, but violence, destruction, or prolonged refusal of lawful instructions may create separate liability. Employers should identify each individual’s conduct rather than impose identical sanctions based solely on group membership.^[18]

As disputes escalate, lawful collection and preservation of original recordings, CCTV footage, and emails are important. A chronological factual account supported by consistent evidence is more persuasive than isolated statements.

IV. Conclusion and Implications: What to Do Before Dismissal

Even when one side wins a Labor Relations Commission hearing, the time spent and damaged relationships cannot easily be restored. Justified dismissal rests not on employer dissatisfaction but on documented objective grounds, proportionate measures, and compliance with statutory and agreed procedures. Neglecting any one of these can result in unfair dismissal.

Sound personnel management should not make employees fear dismissal at any moment. Employers should communicate standards in advance, explain problems fairly, and support improvement. Dismissal should be the final option only when employment cannot continue despite these steps. This reduces employers’ legal risks and gives employees a predictable working environment.

1. Preventive Checklist for Employers

First, identify alleged misconduct by date. Second, review applicable rules and evidence and hear the employee’s explanation. Third, consider warnings, training, reassignment, suspension, or other alternatives. Fourth, compare sanctions in similar cases and check for discrimination. Fifth, follow collective agreement and Rules of Employment procedures and, when dismissing, properly deliver written notice stating specific grounds and the effective date. Finally, preserve the full investigation record for possible proceedings.

2. Steps Employees Should Take

After unexpected notice of termination, first clarify whether it is dismissal or recommended resignation. Do not hastily sign a resignation letter against your wishes before reviewing its legal effect. Gather the employment contract, Rules of Employment, attendance records, evaluations, instructions, warnings, and dismissal notice. If grounds are unjustified or procedures defective, consider applying for Labor Relations Commission relief within three months of dismissal.

3. Settlement Is Also a Reasonable Option

Besides reinstatement, back pay, monetary compensation orders, appeals, and litigation, parties may settle voluntarily. Settlement is meaningful only when the employee understands and freely accepts it. The agreement should clearly state the termination date, amount and timing of payment, settlement of outstanding amounts, confidentiality, and scope of dispute resolution, without improperly waiving statutory rights