Law "Even in urgent business situations... firing without efforts to maintain employment is 'unfair'"

Seoul Administrative Court, Seocho-gu, Seoul. / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Daehyun] A court ruling has declared that it is unfair to dismiss employees without efforts to avoid layoffs, even in urgent company situations.

On the 8th, according to the court, the Seoul Administrative Court Administrative Division 14 (Chief Judge Lee Sanghoon) ruled against the plaintiff in the first trial of the lawsuit filed by nursing home A in Busan to cancel the reconsideration decision of unfair dismissal relief against the Chairman of the Central Labor Relations Commission.

Nursing home A notified seven workers, including Mr. B, on January 8, 2020, of dismissal due to business reasons. At that time, nursing home A had received a long-term care benefit cost recovery order of approximately 5.33 billion KRW from the National Health Insurance Service, and the number of facility residents sharply decreased from 91 to 59. The local district office also imposed a 50-day business suspension order.

Subsequently, workers including Mr. B filed an application for relief from unfair dismissal. The Central Labor Relations Commission stated, "Although the urgent business necessity at the time of dismissal is recognized, the plaintiff did not make every effort to avoid dismissal and did not select the subjects based on reasonable and fair criteria," and accepted the relief application.

Nursing home A filed an administrative lawsuit requesting the cancellation of the Central Labor Relations Commission's decision, arguing that "the dismissal was justified." They claimed that "there was an urgent business necessity including financial difficulties, and they had sincere consultations with the workers' representatives, including establishing a voluntary retirement procedure."

The court did not accept nursing home A's claim. The court pointed out, "Although the facility could operate after the business suspension period, selecting all workers who did not apply for voluntary retirement as dismissal targets cannot be seen as the plaintiff making every effort to avoid dismissal or selecting dismissed workers based on reasonable and fair criteria."

The court added, "At the time of the voluntary retirement recruitment announcement, 25 out of 32 workers applied for voluntary retirement, which would reduce the existing workforce by 78%, and about 30 residents expressed their intention to re-enter the facility after the business suspension period ended, so resuming operations seemed possible."

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