Is your Korean Employee a Dispatched Worker and Thus a De Facto “Employee” under the Korean Labor Standards Act?

In 2015, the Korean Supreme Court detailed standards in determining if a Subcontracted Worker in Korea is actually a Dispatched Worker and, thus, a de facto employee of your Korean Company.  The designation has implications for retirement benefits, employment security and the payment of benefits. Dispatched Workers vs. Subcontracted Workers Companies employ, in Korea, often workers via manpower supply companies and via subcontracting agreements.  These employees are not retained directly by the Company, but are retained via a manpower company (“Dispatched Worker”) or a subcontracting agreement (“Subcontracted Worker”). The difference in these two type of relationships lies in the control over the workers – not in the mere nature of the retention according to the Korean Courts.  If the Company has a sufficient degree of control over the worker, in the eyes of the specific Korean court, the worker is deemed a Dispatched Worker and, thus, an employee of the

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Legality of an Employer Lockout in Korea: Korean Labor & Employment Law Basics

Korea, in the eyes of many domestic and foreign companies, has been lax in the enforcement of the rights of employers to run a business.  One noted cases that lead to a decision by the Supreme Court of Korea comes to mind.  Because of a labor strike at a major automobile parts manufacturer and the physical blocking of the use of replacement workers and employer machinery by the employees, the employer implemented a partial unpaid lockout of certain employees (employees were employed by a unit of the employer), thus disallowing certain workers to enter the workplace in order to prevent further disruption of the manufacturing process.  The employees physically blocked production and thus did not allow certain orders to be fulfilled by the employer, thus affecting the employer’s business. The case is a great case to demonstrate Korea’s Lockout Law. Following the lockout, the locked-out employees, on several occasions, expressed

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IPG’s Korean Employment & Labour Law Chapter in Global Legal Insights 2018

IPG is proud to announce the contribution of the Korean chapter to GLI’s 2018 Edition of Employment & Labour Law.  The publication contains chapters from 29 different countries.  The publication may be found at: Employment & Labor Law, Sixth Edition. Key Issues addressed are, among others,: -General Labour Market Conditions in Korea -Employment Policies under the Moon Administration -Litigation Trends in Korea -Definition of “Ordinary Wage” in Korea -Korean Supreme Court’s Regular Interval Bonus Case -Director as an Employee for Korean Employment Security Purposes -Korean Employee Lockouts -Layoffs and Dismissals Based on Fault of the Employees in Korea -Korean Restrictive Covenants Law -Trade Secrets Protection in Korea -Severance Payments in Korea -Childcare Leave in Korea -Maternity Leave in Korea -Paternity Leave in Korea -Annual Leave in Korea Please see the other articles below and via the Employment Law Tag. [ABTM id=1137] (c) Sean Hayes – SJ IPG. All Rights reserved.

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Guidelines on Rules of Employment & Guidelines on Fair Personnel Management Withdrawn by Korean Ministry of Employment

Inline with the labor union and employee-focused promises of the President Moon Administration, the Ministry of Employment & Labor has withdrawn the impeached President Park’s Guidelines on Rules of Employment & Guidelines on Fair Personnel Management to the regret of most of industry.  The withdraw of the Guidelines does not change the present state of Korean Labor & Employment Law. Ex-President Park’s Guidelines on Rules of Employment, inter alia, noted procedures to amend the rules of employment of a company even without the mandated consent of the employees and the Guidelines on Personnel Management noted a procedure and reasons to terminate poor performing employees.  The Guidelines, together, were a means, in part, to express an opinion and clarify issues, seemingly, with the purpose to to add more labor flexibility to a system that is perceived to be overly protective of employees.  Korea, in international surveys, is rated as have one

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Korean Employment Law & Labor Law amendments under Pres. Moon Administration

President Moon President Moon promised during his presidential campaign to make major changes to Korean Labor Law & Korean Employment Law .  President Moon intends to make Korean Labor Law more protective and beneficial for workers.  The major changes,  in short,  promised by the new administation are the following: Create 810,000 New Jobs via expanding Korea’s Public Sector President Moon has vowed to create over 340,000 new government social service jobs and over 140,000 new government jobs in public safety and security while converting 300,000 non-regular workers to permanent workers. Impose Limitations on the Utilization of Non-Regular Workers in Korea President Moon has vowed to propose a bill that some have named the “Special Act on Preventing Discrimination Against Non-Regular Workers.”  This Bill would, among other things, according to the President Moon Administration: Impose limits on the use of part-time and fixed-term workers to only work that is seasonal or

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Must I grant Male Employees Maternity/Paternity Leave in Korea?: Korean Labor/Employment Law Updates

Article 19 of the Korean Labor Standards Act (LSA), in part, governs whether an employer must grant an employee unpaid maternity leave.  Any employer, under the LSA, must grant a male or female employee maternity leave (Literal translation: Temporary Retirement for Childcare) if the child of the parent is taking care of the child and the child is under the age of 8 (Western/Legal Age). The employer is required to give the employee a maximum of one year unpaid leave, the employer may not dismiss the employee or otherwise disadvantage the employee during this leave period and the employer must include this period in the employee’s “continuous employment” and must pay the employee, at least, the same wage amount as when the employee commences the leave as when the employee returns to work. More articles on employment law that may be of interest to the reader. IPG’s Labor & Employment

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Ordinary Wages and the Principle of Good Faith in Korea: How long should the principle be applied to Korean CBA?

We wrote a post on this blog a few years back entitled: Ordinary Wages Under Korean Law Clarified by Supreme Court: Regular, Uniform & Flat Defined.  Our post noted, in part, that: ” . . .the Supreme Court, in a case that I will call the Regular Interval Bonus Case, has delivered  a couple of more clear examples, than in the past, of cases that will be considered Ordinary Wages.   In the case, the employer was providing a “regular bonus” every two months. The Court in the Regular Interval Bonus Case opined, in part, that: Any collective bargaining agreement (labor-management agreement or like agreement) that deems a certain type of payment as not an Ordinary Wage is void and, thus, unenforceable.  An exception is available for certain specific companies that have implemented this practice in particular limited situations based on the vague principle of “good faith and trust.”  I will

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“Ordinary Wages” Under Korean Labor Law Clarified by the Supreme Court: “Regular, Uniform & Flat” Definition

The definition of “ordinary wage” has been clarified by the Korean Supreme Court in two decisions handed down on December 18, 2013.  The cases will have a significant impact on Korean Labor & Employment Law and will, likely, lead to additional litigation. The calculation for an Ordinary Wage is utilized to calculate statutory entitlements, thus, has an impact on the aggregate amount of contributions necessary to be paid to an employee.  The issue is one of the most significant issues, this year, for domestic and foreign employers. For example, under Article 56 of the Korean Labor Standards Act, an employer must pay 50% of the “ordinary wage” plus the ordinary wage for overtime, night and weekend work performed by the employee.  For many companies, this calculation could increase costs to a point that will make profitable companies head, immediately, to the red. The basic test has been that an Ordinary

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Hiring Employees in Korea: The Basics by an HR Guru and Advisor to IPG Legal

“Hiring is your most important task,” said the late Steve Jobs. Considering a wrong hiring decision can be extremely expensive to repair, let’s look at some recruiting options. Ideally, a succession plan will have an internal candidate ready for promotion: advancing a rising star’s career and providing continuity with minimum controversy and a positive message to the workforce that capable people who do well will be recognized and rewarded. Often, however, hiring from outside is required. If the company has a competent HR recruiting function, direct ads and in-house screening may be effective for lower and some midlevel positions. For more important midlevel management or specialist positions, outside assistance may be needed. There are many recruiting companies. By going to any networking event, it is hard not to collect business cards from such firms. Most recruitment firms offer contingency searches. Usually the process begins with interviewing the hiring managers and

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Return of Fraudulently Obtained Subsidies by Employer in Korea

The Seoul Administrative Court ruled, late in 2011, that the provision of the Enforcement Decree of the Employment Insurance Act (article 56(2)) requiring the return by an employer to the Korean government of all fraudulently obtained vocational training funds (and other like funds) collected by the Korean employer was unconstitutional (2011 gu-hap 14852).  The law required, in most cases, the return of all vocational training funds received if any funds were received fraudulently. The holding of the Administrative Court of Korea noted that the ““Article 56(2) of the Enforcement Decree of the Employment Insurance Act, before amendment, has failed to properly apply to the matter the concepts of “minimal intrusion” and “balance of legal interests,”” violating the Constitution because it unduly infringes the ‟property rights” of companies obtaining fraudulent funds. If your company has been required to return subsidies for any reasons, please contact an attorney immediately.   You may be

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