Labor: Is poor performance a “justifiable” cause for employment termination?

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It is first noted that the cases that have dealt with employment termination based on poor performance are only a few. The reason may be that employers rarely terminate employees on the ground of poor performance alone because they know that it is difficult to justify such termination under the provisions of the Labor Standards Act of Korea.

Below are a few examples of prior court cases where the employment termination by reason of poor performance was at issue.

(i) Case: central Labor Committee’s ruling on March 8, 1993; 93BuHae3

This case involves an employee (a medical insurance association employee) who were terminated due to poor performance and brought an unjust employment termination claim to a regional Labor Committee under the Labor Ministry. The regional Labor Committee found the relevant employment termination unjust and ordered the relevant employer to reinstate the employee’s position, and the employer objected to the ruling and thus filed an appeal with the central Labor Committee under the Labor Ministry. The central Labor Committee, in confirming the ruling of the regional Labor Committee, stated that although the item 1 of Article 35 of the regional medical insurance association operation regulations (“operation regulations”) provide for relieving an employee of his or her post when an employee’s work abilities are deficient or the employee has a poor work record or the employee’s attitudes towards work are significantly insincere, any such relieving of one’s post based on that provision would only be proper if and when the employee’s work abilities, work record or attitudes towards work are significantly below the normal standards. The central Labor Committee further stated that though there may be certain evidence indicating that the employee’s work record was somewhat poor, the employer’s discharge of the employee from his post, on the basis that the discharge falls into one of the causes prescribed in the item 1 of Article 35 of operation regulations, is outside of the realm of just termination.

(ii) Seoul Administrative Court’s ruling on November 2, 1999; 99Gu10178

This is a case where the Seoul Administrative Court did find that there was sufficient evidence indicating the work performance of the employee in question was very poor to a point where the employment termination was warranted. So the Seoul Administrative Court confirmed the central Labor Committee’s ruling that the employee was properly discharged. In this case, there was a substantial amount of negative opinions expressed by the employee’s colleagues and supervisors who worked with the employee at various branches, and his supervisors at various points in time recommended that the employee be discharged due to the significant deficiency in work abilities. Even a high-ranking labor union official, who was in a position to protect rights of union members, expressed his opinion that a disciplinary discharge be taken against the employee. So there was no doubt in this case that the employee’s work abilities and work attitudes were substantially poor, and the Seoul Administrative Court found that the employer’s order to the employee to leave his post and wait for further action (on the basis of item 1, paragraph 1, Article 24 of the personnel regulations) would not constitute an unjust measure taken. Further, under item 5, paragraph 1, Article 22 of the personnel regulations, the deficiency in work abilities is a cause for termination, and in view of the ample record indicating the substantially poor work abilities and work attitudes, the employee discharge based on the foregoing provision would be considered a justifiable discharge.

(iii) Seoul Administrative Court’s ruling on November 26, 2002; 2002GuHap14416

The court, in finding that there was not sufficient record indicating that the employee in question lacked work abilities or did not properly carry out the assigned duties, reiterated the standards for proper discharge of an employee under the Labor Standards Act. Specifically, the Labor Standards Act prohibits termination of an employee without a “justifiable cause,” and a justifiable cause would mean that the employee is responsible for rendering the relevant employment relationship no longer possible to continue by commission of grossly negligent, illegal, or criminal acts, etc. And whether an employee’s act or conduct would be deemed a “justifiable cause” under generally accepted public notions will finally be determined upon review of all circumstances, taking into account such factors as the relevant employer’s business objective and nature of its operations, reason for the infringing act by the employee, effects on the employer caused by the employee’s act, past job performance and so forth, and the employer has the burden of proof for justification of the relevant employment termination. So, citing the foregoing standards, the court concluded that the employer failed to present any evidence that the discharge of employee was based on a “justifiable cause” as prescribed under the Labor Standards Act.