As South Korea’s corporate landscape evolves amidst global competition and economic uncertainties, companies face the pressing challenge of managing low-performing employees. Recent trends indicate that major Korean conglomerates are increasingly recommending voluntary resignations— a practice aimed at restructuring or letting go of employees with deficient performance without resorting to outright dismissals, which require a justifiable cause (as explained below) under the law. This approach reflects a strategic response to the need for performance-driven workforce optimization, but also highlights the unique challenges of dismissing employees in Korea due to stringent labor laws and cultural norms that prioritize job security.

Unlike in some Western countries where employment-at-will doctrines provide employers with broad discretion to terminate employment, Korean law imposes significant restrictions. These stringent labor laws are the primary hurdles for both domestic and foreign enterprises unfamiliar with Korea’s legal environment. Understanding these challenges is crucial for employers seeking to navigate the complexities of Korean labor law while maintaining operational efficiency. This article explores and analyzes the legal framework governing employment terminations and examines landmark court cases that shed light on how the law is applied in practice.

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