배움과 공유의 시간

04 Termination of Labor Contracts

Termination of labor contracts is much easier than termination. This is because the contract ends naturally when it expires. However, it is only available for the first fixed contract and at the end of the second fixed contract the user is no longer entitled to terminate the employment. Another problem is that, even when the contract expires, the contract expiration is automatically deferred until the situation expires if the employee is in a special situation, such as a medical device or three female planes.

1. Requirements for termination of labor contracts


Concept of termination of labor contract
The termination of a labor contract means that the labor relations formed between users and workers are automatically extinguished by the emergence of legal reasons. In other words, unlike the lifting of a labor contract, neither labor nor management is required to express their opinions, and if legal reasons are met, labor relations are extinguished.
ᄋ Termination of maturity: By fulfilling the contract by the expiration of the contractual term promised in a fixed-term labor contract and not renewing the contract at maturity, this means that the contract is terminated naturally (unapplicable for indefinite-term labor contracts).
ᄋ Court termination: if a worker retires, dies, or the company goes bankrupt or is liquidated;

In case the contract cannot be terminated at the time of the contract expiration;
In some cases, the management cannot unilaterally terminate the labor contract unless the negotiation is lifted even if the labor contract expires.
1 If a worker meets the requirements of a non-fixed contract
In case a contract for two consecutive fixed-term labor is signed, and the contract for ten consecutive years of continuous service is reached;
2 In case of special reasons for being restricted from dismissal
a If a special reason for legal protection exists, the termination of the contract shall be automatically postponed until the expiration date of the special reason. There is no need to sign a separate labor contract during the net period.
3 female employees (pregnancy, childbirth, breastfeeding period) and legal medical period due to illness
b Employees with less than five years of service until retirement (no termination of contract until retirement)

[Article 44 of the Labor Contracts Act]
1 In case of a disease or injury, it is allowed to remain in the hospital until the expiration of the legal medical period.
2 For pregnant female employees, the contract expiration is automatic until the infant is 1 year old.
3 If the company has 15 years of service and less than five years of legal retirement, the contract is not terminated until retirement.

Mandatory 30 days prior notice at the end of the contract term - only applicable to some localities
It is a provision that does not exist in the central labor law or contract law. However, some provinces (Daeryeon, Kang So-seong, etc.) were required to give prior notice 30 days by local law before the labor contract law took effect.
In addition, since the Labor Contract Act was not repealed even after its entry into force, companies based there are obliged to choose between giving prior notice 30 days before the expiration of the labor contract, or paying one month of advance notice, and ending the labor relationship early.
Nearly all companies are paying one month's advance notice and ending labor relations early, as normal work is not expected for a month until the expiration of the contract.

[working-level measures]

1 Areas where prior notice is mandatory (Bukgyeong, Gangsoseong, Daeryeon, etc.)
Special reasons such as a disease or pregnancy that limits termination of a contract may arise if the labor relationship continues to be maintained after prior notice 30 days. Therefore, it is recommended to pay an additional one-month notice in advance, sign a transfer agreement, and then take over and retire. Even if the company did not give prior notice for various reasons, the contract will end naturally and the company will have to pay as many days more for violating the prior notice.

[Requirement clause for early termination of contract]
If the labor contract matures on 30 September 2015, it is necessary to insert a clause in the turnover agreement, "For the convenience of sufficient time needed to find new jobs for the room (workers), Eulbang will raise its end of business as of 1 September 2015 and the company agrees to this."
(CAUTIONS)
If the above turnover agreement ends a month early, there is a possibility that the worker will seek illegal dismissal and economic compensation in the future, saying, "It is not the termination of the labor contract but the termination of the labor contract."

2 Areas without prior notification obligation
It is safe to notify you on the date of the expiration of the contract, but it is advisable to notify you by one or two weeks before the termination of the contract, receive a confirmation form, pay the remaining monthly salary and economic compensation, and complete the retirement procedure promptly. It is important to note that too early notice may create special reasons for limiting termination of the contract, such as the submission of a sick person, to delay the termination of the contract.

2. Risk related to termination of labor contract

(1) Termination of the net deferral of the contract

This means that the contract cannot be terminated due to the occurrence of a special reason just before the expiration of the labor contract, and after automatic postponement until the special reason is lost, the labor contract is terminated. However, it is possible to negotiate as much as possible if labor and management agree. The question is how much compensation will be offered as a condition of negotiation.
Especially, for female 3rd grade employees, employment is guaranteed for up to 1 year and 10 months from the time of conception.
Since we have the right to receive a living allowance for four months of maternity leave, we ask for substantial compensation
There is a possibility of doing it. In this case, the company enters into a long-term unpaid leave agreement (social insurance payment terms),
Select appropriate measures, such as lifting negotiations (pay preservation conditions during maternity leave) and job adjustment, to respond
I need it.

[Example] The contract cannot be terminated during the medical period due to illness
K worked for a parent company for three years and is due on Jan. 5, 2008. By the way, K had an accident while traveling to the suburbs on January 1, 2008, which resulted in a amputation of his right leg and three months of treatment. On January 5, 2008, the company notified K that it would not renew the labor contract at the time of the expiration of the contract, but K disagreed, saying that the company could terminate the contract only after the expiration of the medical term.
(Analysis)
In the case of a medical period within the prescribed period of the law, the company cannot terminate the labor contract even if the labor contract expires. Only after the medical device expires can the company terminate the labor contract on a non-executive basis.


(Question) Handling of 3rd term female employees with expired contracts
I would like to inquire about employees who are pregnant, delivered, and breastfeeding among the employees whose contracts have expired. There are departments whose jobs have been transferred to other countries, where several employees are pregnant, delivered and delivered. I know that because I don't have any more work, I don't want to sign any additional contracts at the expiration of the contract, but I can't because of the provisions of the Labor Contract Act. Do I have to make an additional contract at the expiration of the contract or can I not terminate the contract?
(answer)
At the expiration of the contract, but at the 3rd term (pregnancy, birth and breastfeeding) the labor contract is automatically re-enacted until the expiration of the legal protection period (until the infant is one year old). However, since there is nothing to do with your company in the real world, we should try to negotiate a settlement on the condition that you give compensation of economic compensation plus three months of maternity leave. 　

(2) Risk of termination of employment after the expiration of the contract

If the term of the contract has expired but is left unrenewed, a "factual labor relationship" is formed, and if this condition exceeds one month, a payment obligation of double wages is imposed on the user (there is no one month grace period in Beijing). In fact, in the event of labor relations forming, the company shall promptly conclude a written contract to prevent the accumulation of double-wage penalties.
After the expiration of the contract with the worker, ending the labor relations is regarded as a middle-of-the-road solution, and the economic compensation amount is calculated from January 2008 but not from January 2008. For those who entered the company before 2008, the amount of economic compensation will increase significantly.
In addition, if the company disposes of labor relations after the expiration of the contract, it may be deemed as an illegal release and may result in an economic indemnity payment risk. Therefore, it is necessary to choose between termination of employment or signing a renewal contract before the term of the contract expires

[Example] Risk of termination of employment after expiration of contract
J joined the parent company in 2000, the last labor contract was signed on May 1, 2007, and the maturity date was April 30, 2008. By the time the labor contract was due to expire soon, the company had announced that it would no longer renew the contract because it was in bad management and needed to cut jobs. Instead, since J had worked for a long time, he acknowledged his contribution to the company and gave him the opportunity to find a new job for two months without going to work, during which time he paid his wages normally. Two months later, the company gave J half-month economic compensation, and J applied for labor arbitration to calculate the economic compensation based on the total number of years of service after retirement.
(Explain)
Since J has in fact formed a labor relationship with the Company after the expiration of the labor contract, the termination of employment is considered to be a middle-of-the-road termination rather than a termination of the labor contract, so an economic compensation of 7.5 months shall be paid on the basis of the total service life. In this case, terminating employment at the expiration of the labor contract and giving a two-month wage on a per-unit basis would be a way to avoid unnecessary legal risks.


(3) Other precautions at the end of the contract expiration

1 Delivery of a notice to terminate a labor contract
If the company sends a notice of termination at the time of the expiration of the labor contract, but the company refuses to sign the contract, leaving it unattended will not be legally effective. Therefore, EMS should be sent to the place where the labor contract is contracted to be delivered to the place where it is sent, and the EMS delivery card with the name and the document title must be kept.
2 Check if unused date of annual leave exists
If an unused annual leave exists at the time of retirement, a compensation of 200 per cent shall be paid, so the employee who ends the employment shall be notified to use the unused annual leave by a fixed period prior to the notice of termination of employment.
3 Alternative vacation days for extra work (Tuesdays and Sundays.
200 per cent of overtime payment risks are avoided by arranging alternative leave prior to notice of termination of employment.

3. Terminate medical device terminators

If a worker suffers from an illness or is injured in non-work, fails to report to work normally after the expiration of a legally defined medical device, or is unable to engage in the original work, or is also unable to engage in other work arranged by the company, the company may pay economic compensation plus one month’s severance notice allowance ("N+1") and terminate the labour contract.

Standards for the determination of incapacity of work
In the event of a situation in which an employee is unable to enter the office but is unable to engage in the work, the entity may consider whether to terminate the contract. In this case, the entity cannot determine whether the employee is able to engage in the work, and must be assessed by the Labor Competency Assessment Committee (article 35 on the slight issue of the thorough implementation of the Labor Law). There is a risk that a company considers it impossible for an employee to do his or her job only through appearances without being appraised by the Commission on Labor Ability Test, and that it is considered illegal to terminate a labor contract. In practice, cases that are even audited by the Labor Competency Assessment Committee are very rare, and most are conducted by giving and lifting economic compensation, depending on the inability to report to work after the medical plane is over.

4. Terminating contracts of persons who are not qualified for the job

If a worker is unable to perform his or her duties and is still judged unfit for the job after training or job adjustment, the company may pay economic compensation plus one month’s notice of dismissal ("N+1") and terminate the labor contract.

[Case] Lose due to default of court procedure
J is a technical company, A/S, and due to its negligence in A/S, the amount of returns and customer complaints have been continuously reported. Two months later, the company notified J of the cancellation of the labor contract for the reason of non-compliance. J has thus filed for arbitration, and the company has lost.
(Explain)
The company lost the case because it could not provide evidence that it had gone through such legal procedures, although dismissal was possible only after education or job adjustment, and the decision to fail the job was made again.

Criteria for judging job defects
The criteria for non-compliance of duties stipulate that" the duties agreed upon in the labor contract or the workload of the same job or of the same person cannot be achieved" (Article 26 of the Explanation of the Labor Law). However, the final judgment is delegated to the entity, which requires a fair and objective high performance system. In addition, labor contracts or employment rules should define the criteria for job deficiencies, such as two consecutive high scores of less than 60 points (100 points), etc.

Provide a second chance in either training or job coordination
In the event of dismissal, training or job adjustment must be carried out. Whether an entity conducts education or adjusts its duties, the entity can choose on its own. When selecting an education, it is common to take a few hours or so to satisfy the formal requirements and to get a confirmation of the training.
Since the selection of job adjustments is due to lack of job responsibilities, there is no need to obtain consent from employees, there is no need to change labor contracts, and the company can unilaterally adjust its duties (Article 1 of the Ministry of Labor’s Public Affairs’ Reply to the question of the occurrence of labor disputes between employees and businesses due to the change of position). If the assessment of non-compliance is still made after education or job adjustment, the entity may fire the employees.

30 days' notice or one month's wage payment
Since workers are free from negligence, they are required to pay 30 days' notice of dismissal, or an additional one-month wage. Almost all companies pay one-month wages and immediately lift labor contracts. Because if you enter a medical plane or get pregnant with a disease in that month, you will not be able to fire until the special situation

Procedure for dismissal of the reason for non-commissioned job
In the event of a labor dispute, users are liable to prove the legality of their dismissal, and it is very rare in practice for them to actually take such procedures and fire, except for those with clear sales positions, because there is a high possibility of losing if there is a clear set of assessment criteria, evidence of job defect and any defect in the implementation of the court procedure (usually in the form of a negotiation).
1 Unsustainable situation of the current task
Evidence is needed that the work agreed to in the labour contract has not been completed or that the work force of the same task has been significantly underperformed. This requires the completion of explicit and objective standards of high performance in labor contracts or employment rules.
(e.g. in case of a sales position, the sales amount of 100,000元 per month is not met, considered unfit for duty.
It is necessary to preserve evidence related to performance outcome, or job defect, such as work duties determined by the company or data related to the incomplete workload (employee verification required)
2 Progress in education or job adjustment for workers
Job deficiencies can be caused by problems in the work environment rather than by one's own ability.
The law stipulates that one more opportunity is given through education or job adjustments. Education
Education records, employee education registration tables, education reports, or post-education examination papers,
It is necessary to preserve evidence such as education's contents.
3 Judging that he is still unfit for the job after training or job adjustment
Demonstrate that they still fail to complete their duties or workload even after training or job adjustment.
relevant evidence is needed to do Usually, the outcome is proof.
4 Completion of labor contract cancellation notice and preservation of evidence to the person

Practical measures to dismiss employees who are not qualified for the job

[Question] Method of firing a person who is not in the position
One of the employees is not capable of doing his job, so we are going to give him/her economic compensation this time (no negligence by the person to be dismissed). What would be the problem if such incompetent staff were to be organized, the economic compensation plus one month’s worth of layoffs?

There is a clause in the Labor Contract Act that allows for the temporary dismissal of a worker without a job, but in reality, using this provision to fire him requires a very complicated process over a long period of time, as described above. In reality, it is difficult for small and medium-sized companies to take the procedures prescribed by the law, either on time or on evidence. Therefore, in this case, it is realistic to use the company as a bargaining chip with objective data related to poor performance and to take a "negotiate-off" approach under the N+1 condition, putting pressure on the company to exercise its job-coordinating card in the event of non-compliance.

5. Contract cancellation based on the reason for the significant change in objective circumstances


In the event that a significant change occurs in the objective circumstances that were based on the signing of the labor contract, the user may cancel the labor contract under the terms of N+1, and negotiations on the change of the labor contract cannot be made even though the labor-management agreement has been reached.

an interpretation of a significant change in the objective situation
Companies should secure evidence of changes in objective circumstances that would no longer be able to implement labor contracts such as corporate transfers, closures of stores and M&As. While there is nothing wrong with external objective factors, it is debatable whether they belong to a significant change in the objective situation when job cuts are needed in accordance with the closure of certain departments within the company, or reorganization of the company’s.
Legally and strictly, this can be seen as a subjective judgment of the company’s management class rather than a change in objective circumstances. However, in a situation where the business environment is radically changing, it cannot be tied to the legal profession alone. For example, because the cancellation of a business item may be recognized at the discretion of the judge if there is a reasonable and sufficient reason for the department to be shut down altogether, the company needs to try to adjust its duties and negotiate on the basis of Article 40(3) of the Labor Contract Act, and take action to terminate the contract if it fails to reach a settlement.

[The Labor Ministry's explanation of the "labor law"] ( 해석1994 [No. 289)]]
Article26 The "observation situation" of this clause shall be such that it is impossible to enforce the terms of all or part of a labor contract.
This refers to, for example, other circumstances that make it impossible, such as the transfer of an entity, the consolidation of an entity’s absorption, or the transfer of an entity’s assets.

[working-level measures]

1 Collection and presentation of data demonstrating significant changes in objective situations
As to what is a "significant change in the objective situation" that would make it impossible to implement labor contracts, labor laws do not have a clear interpretation. In the event of a labor action, the enterprise shall be liable for proof of "significant changes in the objective situation" and it is difficult to obtain the support of the judge for reasons that go beyond rationality or that are sub-approval.
2 Conduct negotiations with workers on the change of labor contract
The company needs a consultation process regarding the change of labor contracts with workers. The labor contract’s negotiation change notice [Sample10-12], which takes into account objective changes in the situation, is sent to the workers, and the workers are required to respond within a certain time frame, leaving evidence that the consultation was carried out. If such a court procedure is not followed properly and the contract is unilaterally terminated, it is considered an illegal dismissal and a double-time economic compensation payment risk occurs.

[Labor Contracts Act]
Article40 In the case below, the contract may be terminated after written notice 30 days in advance, or after payment of one month's wages.
(3) In case a significant change in the objective situation that was based on the signing of a labor contract prevents the user from fulfilling the original labor contract, it is not possible to reach an agreement on the change in the contents of the labor contract even though the employee has consulted;

A change in the organizational structure of the company is not recognized as a significant change in the objective situation
L joined a foreign-invested company and successfully served as the sales manager, but the deteriorating market conditions forced the company to restructure its operations, and the senior L was relieved of its labor contract in the process, citing "significant changes in the objective situation." L filed for labor arbitration, and the company lost.
(Explain)
Significant changes in objective circumstances generally refer to situations in which a company cannot continue to fulfil labor contracts, such as production conversion, distance transfer, technology modification, mergers, and spin-offs, and, in the case of changes in management strategy, is not part of this category because it is adjustable to other departments.

[Case of victory]
The relocation of the factory is recognized as a major change.
L is a front-line official in the factory production department and has signed a five-year labor contract. However, under the local government's natural heritage protection policy, the factory was forced to relocate from A to B, and only the sales department remained at A. The company had hoped to go to the city of B and continue its original work, but the two sides failed to reach an agreement even though negotiations were underway, as L did not back down from its position of staying at A. The entity decided to terminate the labor contract on one-sided basis, and L rejected it and applied for labor, but the company won the case.
(Explain)
The objective situation that was based on the conclusion of the labor contract, as it was inevitable to relocate according to the government's policy.
A major change in can be seen as a typical example of a failure to continue to fulfil a labor contract.
In addition, the company negotiated with Hong Gil-dong on the change of labor contract, but they agreed.
Because it could not be, it can be seen that the lifting of a company's labor contract is in accordance with the law.