SOUTH KOREA Law and Practice Contributed by: Heejun Choi, Kyoung-Ho Kim, Sungsok Yang, Eunjee Kim and Kwang-Chun Park, Dentons Lee
• the Minimum Wage Act; • the Employee Retirement Benefit Security Act; • the Act on the Protection of Fixed-term and Part- time Employees; • the Act on the Protection of Temporary Agency Workers; • the Equal Employment Opportunity and Work- Family Balance Assistance Act; and • legislation governing mandatory social insurance, including: (a) the national pension; (b) national health insurance; (c) employment insurance; and (d) industrial accident compensation insurance. Collective labour rights are governed by the Trade Union and Labour Relations Adjustment Act, which regulates trade unions, collective bargaining, collec - tive agreements, industrial action and unfair labour practices. Collective agreements may have a norma - tive effect on covered employees and, in some cir - cumstances, other employees within the same work - place and employee category. Many employers must also maintain work rules gov - erning working conditions and workplace discipline. These cannot provide terms less favourable than those set by mandatory legislation or applicable col - lective agreements and adverse amendments gen - erally require employee consent under the statutory procedure. Individual employment contracts define matters such as duties, wages, workplace and working hours. However, contractual freedom is limited by manda - tory employment legislation, collective agreements and valid work rules, with more favourable contractual terms generally prevailing over less favourable work rules. Although Korea is a civil law jurisdiction in which statutes are the primary source of employment law, Supreme Court precedents are highly influential, par - ticularly in determining employee status, assessing dismissals, interpreting ordinary wages, evaluating amendments to work rules and distinguishing employ - ment from independent contractor relationships.
Accordingly, Korean employment law is best char - acterised as a mandatory statutory framework sup - plemented by collective agreements, work rules, individual contracts and influential case law, with statutory minimum standards forming the baseline of the employment relationship. 4.2 Characteristics of Employment Contracts The employer must specify matters including wages, prescribed working hours, holidays and annual paid leave, together with the components, calculation method and payment method of wages. Failure to comply with these written notification requirements may result in statutory sanctions, but does not invali - date the employment relationship. Additional written requirements apply to certain categories of employees. Fixed-term and part-time employees must receive written terms covering the employment period, working hours, wages, holidays, leave, place of work and duties. Separate written for - malities also apply to dismissal notices, which must generally state the reason for dismissal and its effec - tive date. Employment contracts may be either indefinite-term or fixed-term. A fixed-term employee may general - ly be employed for up to two years, after which the employment is deemed indefinite unless a statutory exception applies, including project-based employ - ment, replacement of an absent employee, education or vocational training, employment of certain senior employees or other grounds recognised by law. Even where a contract specifies a fixed term, Korean courts may examine its substance. If the fixed term is merely formal or the employee has a legitimate expec - tation of renewal based on the contract, work rules, a collective agreement, repeated renewals or other circumstances, refusal to renew without reasonable grounds may constitute an unfair dismissal. Probationary periods are permitted, but the employ - ment relationship is regarded as having commenced from the outset. Refusal to confirm employment fol - lowing probation must be supported by reasonable grounds relating to the employee’s suitability, per -
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