12/17/2014

"Cause" Needed to Terminate During Probationary Period in Korea?

Korean Labor & Employment law is a labyrinth that the majority of our clients struggle with on a near daily basis.  For many foreign-capital invested companies, doing business in Korea, the major risk shall be from employees. 
  
One issue that a client has, recently, requested answered is if an employer needs "cause" to terminate an employee during a contractually imposed 3-month probationary period.  The answer is a resounding YES.

An employer must provide some reason to an employee for termination even under a contractually imposed probationary.

The Supreme Court has noted that:
"An employers have a broad right to cancel a contract. However, even in (the case of a probationary employee), the reasons of dismissal must be rational, objective and should be considered a proper decision based on social norms"
Supreme Court and lower court decisions have applied a lower standard than the typical "cause" standard applied by the Korean Courts.  However, the burden of proof is still, seemingly, on the employer to establish cause for termination of the employee even if the employee is within a three-month probabtionary period.

Other articles that may be of interest:
To learn more about IPG's Labor & Employment Law Team, please see:
IPG's Labor Law Team

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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.