Once a business operates with more than 5 employees in South Korea the Labour Standards Act affords a relatively protective regime for employees. Dismissals are unlawful without “just cause”, making unilateral terminations difficult and hard to defend within Korea and termination payments are relatively generous. In addition, works councils/ labour management councils are required where there are more than 30 employees and the Trade Unions in Korea are generally strong. However, underpinning some of the stricter aspects of the regime is a general sense of commerciality, for example it is common to agree sensible exit packages with employees where no “just cause” exists.
Whilst many labour law concepts in Korea are familiar to those who have experience in Europe, such as the protection of employees on a business sale and the need for proportionality and reasonableness in the enforcement of post-termination restrictions, there are also cultural sensitivities unique to Asia, for example a termination should usually take place by someone older and more respected than the employee.