Notable Developments in Labor Case Law

Seoul Central District Court : 2023.5.11. In a legal case initiated by four individuals, comprising current and former employees of a credit information company, the Court held that the implementation of the 'peak wage system'—a scheme that reduces remuneration to 45-70% of the prior year's earnings based on performance, instead of extending the retirement age from 58 to 60 via a labor-management accord, is markedly detrimental to the workers. The Court further concluded that the company's insufficient measures to mitigate these adverse impacts constitutes unjustifiable age discrimination

Seoul Administrative Court : 2023.5.18. In a landmark ruling, the Court has determined that the mandatory disability employment contributory charge, a levy imposed on businesses failing to satisfy the legislated employment quota for disabled individuals under the "Act on Employment Promotion and Vocational Rehabilitation of Persons with Disabilities," is not subject to corporate tax. This ruling came during a case where a savings bank contested the levy. The Court expressed the view that the charge is considered more as a financial responsibility targeted at realizing policy objectives, rather than a punitive measure

Seoul High Court : 2023.5.19. In a case where an executive officer serving as the head of a COVID-19 response team in a public institution was dismissed for violating quarantine guidelines and playing golf amid the spread of COVID-19, the Court determined that the officer was not under an employment relationship subject to the Labor Standards Act. Rather, he was under an appointment relationship based on delegation or a contract similar to delegation. The Court therefore judged the dismissal to be lawful, given that the officer violated the duty of good faith and the obligation to maintain dignity, and was significantly hindering the performance of his duties

Notable Developments in Employment and Labor Policies

Workplace Risk Assessment : On May 21, 2023, the Ministry of Employment and Labor (“MOEL”) announced its plan to implement the "Guidelines for Workplace Risk Assessment" beginning May 22, 2023. The purpose is to establish and promote the on-site application of a self-regulatory preventive system and a risk assessment system as a crucial means of strict accountability. The guidelines include the following provisions: 1) Redefining risk assessment to focus on identifying risk factors and improvement measures, 2) Diversifying assessment methods by using a simplified and convenient checklist instead of quantitative measurements based on frequency/intensity, 3) Initiating frequent assessment systems such as workplace inspections, accident checks, and an improvement proposal system while maintaining an evaluation system, 4) Encouraging worker participation in the risk assessment process and sharing of results to raise awareness and improve the mitigation of hazardous factors

Furthermore, on May 22, 2023, MOEL responded to an article titled “Simplified ‘Industrial Risk Assessment’ ‥ Controversy Over the Same Standards for Multiple Workplaces”. The article suggests that replacing hazard and risk assessments with simplistic procedures such as checklist methods and a three-level risk assessment method may render them ineffective. MOEL counters this argument by explaining that the previous risk assessment process was complex, involving numerical calculations and estimations of the frequency (likelihood of occurrence) and intensity (severity) of risks. However, with the incorporation of various methods, including checklist approaches, a three-level risk assessment method, and a holistic consideration of industrial accident cases and workers' experiences, it is now possible to comprehensively estimate the presence and level of risks. Therefore, MOEL maintains that these measures will contribute to strengthening and implementing risk assessments in small and medium-sized workplaces

Operation of the Wage Commission for Mutual Growth : On May 23, 2023, the MOEL held a seminar to establish measures for improving the dual structure of the labor market. During the seminar, members of the Wage Commission for Mutual Growth reflected on the history and status of wage system reforms since the commission’s establishment in February and discussed policy alternatives. Moving forward, the following plans were emphasized: 1) Expanding industry-specific consulting to promote the dissemination of wage system reforms and exploring effective support measures such as incentives and tax benefits, 2) Considering amending relevant legislation to establish the foundation for wage system reforms, enhancing wage information and establishing a specialized labor statistics institution, 3) Setting socially desirable goals to address wage disparities, and 4) Focusing on discussions regarding autonomous support measures for mutual growth and solidarity between labor and management