In a recent case handled by IPG Legal’s Labor & Employment Law Team, a foreign expat employed by the Korean branch of a U.S. company was wrongfully dismissed after years of service. The company argued that the employment contract was governed by U.S. law, asserting that an “employment-at-will” relationship existed, allowing termination without cause or notice. However, under Korean law, foreign expats working in Korea are protected under the Korean Labor Standards Act (KLSA) notwithstanding the contract particulars.
IPG Legal attorneys in Korea have extensive experience representing expats in Korean employment disputes. In the aforementioned dispute, IPG Legal successfully argued that regardless of contractual terms citing foreign jurisdiction, employees working in Korea are subject to Korean Labor Laws. Under Korea’s Act on Private International Law, employees, whether foreign or domestic, working in Korea are governed by local employment laws and regulations.
| ACT ON PRIVATE INTERNATIONAL LAW Article 43 (Jurisdiction over Employment Contracts) (1) Where an employee provides his or her labor habitually or provided such labor for the last time in the Republic of Korea, employee may file a lawsuit against the employer with the court. The same shall also apply where the employee did not or does not habitually provide labor in the Republic of Korea, but the place of business in which the employer hired him or her existed or exists in the Republic of Korea. Article 48 (Employment Contract) (1) Even where the parties to an employment contract choose the applicable law, the protection given to the employee pursuant to the mandatory provisions of the country of the applicable law designated under paragraph (2) shall not be deprived. (2) Where the parties to an employment contract do not choose the applicable law, the employment contract shall be governed by the law of the country in which the employee habitually provides his or her labor, notwithstanding Article 46, and where the employee does not habitually provide his or her labor within one country, the law of the country, in which the place of business of the employer who hires the employee is located, shall govern. |
Protections Under Korean Employment Law
Once recognized as an employee under the Korean Labor Standards Act, dismissal without cause in Korea is prohibited. Korean law requires employers to demonstrate either significant misconduct/inability to improve performance on the employee’s part or compelling financial difficulties for the employer to justify termination.
In this case, IPG Legal filed a successful complaint to the Korean Labor Board, resulting in the reinstatement of the foreign expat. This case highlights the protections available to foreign employees in Korea and the importance of understanding how local South Korean labor laws apply to each situation.
| Korean Labor Standards Act Article 23 (Restriction on Dismissal) (1) An employer shall not, without justifiable cause, dismiss, lay off, suspend, or transfer an employee, reduce his or her wages, or take other punitive measures (hereinafter referred to as “unfair dismissal, etc.”) against employee. Article 24 (Restrictions on Dismissal for Managerial Reasons) (1) Where an employer intends to dismiss an employee for managerial reasons, there must be an urgent managerial necessity. (2) In case of paragraph (1), an employer shall make every effort to avoid dismissal and shall establish and follow reasonable and fair criteria for the selection of those persons subject to dismissal. |
Key Considerations for Expats in Korea
Foreign expats in Korea often face unique challenges when it comes to employment, including issues like wrongful dismissal, unpaid severance, and workplace harassment. Over the years, IPG Legal has represented hundreds of expats in resolving these disputes and ensuring their rights are upheld under Korean law.
If you are facing employment issues, it is crucial to seek legal counsel. IPG Legal has the expertise and experience to assist you in navigating these complex legal matters.
by Mina KIM
If you would like a consultation with an attorney, please schedule a call at: Schedule a Call with an Attorney. For more articles on Korea’s Labor & Employment Law please see our Labor & Employment Law Archive. For see: IPG Legal’s Labor & Employment Law Practice for more information on IPG Legal.
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