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Newsletter | July 2016, Issue 2
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LABOR & EMPLOYMENT
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Korea’s Labor Ministry Announces Guidelines on Ordinary Dismissal and Procedures for Changing Working Terms and Conditions
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On January 22, 2016, the Ministry of Employment and Labor (“MOEL”) announced administrative guidelines regarding ordinary dismissal, and the correct procedures for changing employees' working terms and conditions (i.e., the “Rules of Employment”).
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Details
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The guidelines regarding ordinary dismissal emphasize the importance of performance evaluations to change the current seniority-based system to a performance-based system. Regarding performance evaluations, these guidelines call for fair and objective criteria.
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Specifically, the guidelines state that underperformers, as determined by fair and objective evaluations, can be subject to ordinary dismissal without having additional justifiable reasons that might warrant disciplinary dismissal.
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However, for such dismissals to be valid, the evaluation standards must be truly fair and objective, and employees must have opportunities to improve their performance (e.g., training and/or internal transfer).
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Regarding changes to the Rules of Employment, MOEL announced that an adverse change may be valid and effective, even if the employer does not obtain consent of the majority of employees or the labor union, as long as the change is “reasonable within social norms.”
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The guidelines set forth the following six factors that should be considered when determining whether the change to working terms and conditions is “reasonable within social norms”:
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1.
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The level of disadvantage that will result to the employees upon a change to working terms and conditions;
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2.
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The type of change that is required, and the extent to which such a change to working terms and conditions is necessary for the employer and the workplace;
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3.
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Whether the change in working terms and conditions is reasonable;
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4.
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Whether other working terms and conditions will be improved;
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5.
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Whether the employer used its best efforts to consult with the employees or the labor union; and
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Market and industry practices.
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