SOUTH KOREA Law and Practice Contributed by: Heejun Choi, Kyoung-Ho Kim, Sungsok Yang, Eunjee Kim and Kwang-Chun Park, Dentons Lee
Collective Redundancies Collective redundancy (dismissal for managerial rea - sons) is separately regulated under the Labour Stand - ards Act. The employer must satisfy four requirements: • an urgent business necessity; • best efforts to avoid dismissal; • reasonable and fair selection criteria; and • advance notice to and good-faith consultation with, the relevant employee representative. Where a majority trade union exists, it acts as the employee representative; otherwise, consultation must take place with a representative of the majority of employees. The redundancy plan must generally be notified at least 50 days before the intended dis - missal date and, where statutory thresholds are met, reported to the Ministry of Employment and Labour. Unless otherwise provided by a collective bargaining agreement, work rules, an employment contract or a voluntary separation programme, no separate statu - tory redundancy payment is required beyond ordinary termination entitlements. Employees remain entitled to accrued wages, payment in lieu of notice where applicable, unused statutory leave payments and statutory severance or retirement benefits. Failure to satisfy these statutory requirements may render the dismissals invalid, entitling affected employees to reinstatement and back pay. 4.5 Employee Representations Korean law requires employee representation, infor - mation or consultation in specified circumstances. The principal mechanisms are: • the labour-management council under the Act on the Promotion of Workers’ Participation and Coop - eration; and • the employee representative system under the Labour Standards Act and related legislation. These operate separately from, but may coexist with, trade unions. A labour-management council must be established at any business or workplace ordinarily employing 30
or more employees. It consists of an equal number of employer and employee representatives, generally between three and ten on each side. Employee rep - resentatives are elected by direct, secret ballot unless a trade union representing a majority of employees exists, in which case the union appoints them. The council promotes labour-management coop - eration rather than replacing collective bargaining. Employers must report or explain specified manage - ment matters and the council exercises consultation and, in some cases, resolution functions in areas such as productivity, training, welfare, occupational safety and labour-management policies. Separately, the Labour Standards Act requires con - sultation or written agreement with an employee representative in specified circumstances. Where a majority trade union exists, it acts as the employee representative; otherwise, a representative must be democratically selected by the majority of employees. Employee representative involvement is required for: • collective redundancies; • certain flexible, selective and discretionary work - ing-time arrangements; • substitution of paid leave for overtime pay; • substitution of annual paid leave; and • unfavourable amendments to work rules. Depending on the statute, the employer may be required to consult in good faith or obtain a written agreement or consent. Failure to do so may affect the validity of the employer’s action, particularly in relation to collective redundancies and adverse amendments to work rules. Trade unions remain distinct from both the labour- management council and the statutory employee representative system. They conduct collective bar - gaining and conclude collective agreements with normative effect, whereas the labour-management council primarily serves as a cooperative consulta - tion body. Accordingly, Korean law does not require employee representation for ordinary management decisions
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