A recent amendment to the Labour Standards Act (“LSA”) in South Korea clarifies an employer’s obligation to provide written reasons when terminating contracts of employment.

The Old Position

Prior to the amendment on 24 March 2014, when terminating an employment contract employers were required to comply with two separate notification requirements:

(i) advance notification of dismissal (s26 LSA)

(ii) written notification of reasons for dismissal (s27 LSA)

Advance Notification

S26 of the LSA requires an employer to:

“…give an advance notice to a worker at least thirty days before dismissal…”

Written Notification

S27 of the LSA requires an employer to:

“…notify the worker of the reasons for dismissal and the date of such dismissal in writing”

Separate Requirements?

Under the old position it was not clear whether the Advance Notification and Written Notification requirements were separate; many employers issued employees with an Advance Notification thirty days prior to termination and a separate Written Notice on or shortly before the date of termination. Aside from the additional administrative burden, some employers inadvertently used different language in the two notices, and on occasion gave employees conflicting reasons for the dismissal. Such inconsistencies could then be relied upon by an employee to challenge whether the termination was for ‘just cause’.

New position

The amendment to s27 now clarifies that if an employer states the reason and the date of dismissal in the Advance Notification, there is no need to issue the employee with a separate Written Notification. The two requirements can be rolled into one letter given to the employee at least thirty days before the date of dismissal, clearly stating the reason for the dismissal and the employee’s last day of employment.

Going Forwards

The amendment clarifies and simplifies the notification requirements. However, there is still no guidance as to the level of detail required in relation to the reason for the dismissal. Given the relatively strict criteria that need to be satisfied before a termination can pass the ‘just cause’ threshold in South Korea, employers should pay close attention to the reason stated in any notice given to an employee.