The Wrongful Dismissal Dispute Resolution Process in South Korea

Suppose you’ve been sued for wrongful dismissal or another allegedly unfair employment practice in South Korea — or you’re about to dismiss an employee. Now what?

For clarity, if documents have arrived, you’re probably in receipt of a demand from your regional labor relations commission (RLRC) to explain the reasons for some action against an employee, whether it’s wrongful dismissal or something else. Alternatively, you might have received service of process for a civil claim in district court. This article discusses both.

Nutshell Review: Differences in Korean Labor Tribunal and Court Procedures

There are some key differences in procedure that color any wrongful dismissal case in South Korea. Here are the most important ones of interest to multinational and foreign-invested employers:

No jury system. South Korea does not empanel juries in civil court; instead, all issues of fact and law are considered by trained jurists. In the labor tribunal system, there are still no juries, but tribunal members may not have legal training.

Burden of proof. South Korea is not an at-will employment jurisdiction. Most employers know that South Korea’s Labor Standards Act (LSA) Article 23 requires “just cause” for termination; however, the text of the statute extends just cause — and the employee’s right to dispute — to virtually any disciplinary action or adverse employment decision.

LSA Article 23, Paragraph (1) provides: “An employer shall not, without just cause, dismiss, lay off, suspend, or transfer an employee, reduce wages, or take other punitive measures … against the employee.” In the statute, all these actions are described as “wrongful dismissal, etc.” and therefore any may become the object of the dispute resolution process we’ll describe.

Additionally, because LSA Article 23 declares termination unlawful unless the employer has just cause, the burden of proof in a dispute over adverse actions shifts the burden of proof to the employer. If the employee seeks redress from a labor tribunal or court, the employer then needs to affirmatively prove all elements of its case for termination.

No punitive or exemplary damages. Korean law does not recognize punitive or exemplary damages as additional elements of a judgment. Generally speaking, only direct economic damages may be awarded.

Sometimes, a civil court may award nominal damages for emotional distress to the employee when there has been outrageous conduct by the employer. Claims for these damages are subject to the usual plaintiff’s burden to prove the cause of action and damages. Still, the possibility of additional damages should not deter employers because the awards will be quite small — measured in amounts of a few million South Korean won (a few thousand U.S. dollars at current exchange rates).

Weak powers to compel evidence. The Korean court nominally has the power to compel production of evidence by subpoena demanding documents or witness testimony. However, the court lacks the broad judicial contempt power inherent in common-law jurisdictions, meaning there are no penalties, or very light penalties (a non-criminal fine), imposed on witnesses who beg off appearing to testify, or parties who fail to produce documents. There is no discovery process to gather evidence from parties or witnesses as deponents. In short, disputes are a “come as you are” affair where employers must rely on evidence already in their possession. This makes a thorough investigation prior to disciplinary action, and routine evidence retention by management and the HR function, absolutely critical for employers.

In for a penny, in for a pound. Many multinational employers imagine that as a tactical measure, they may terminate an employee without just cause, or without adequate evidence, and then “wait out” the employee through an extended judicial process during which the employee’s need for money will prompt settlement. Sometimes they also imagine they can develop evidence during the trial through discovery or subpoenas. The process in South Korea is quite rapid in comparison to other jurisdictions and undermines the efficacy of these tactics.

All or nothing. In wrongful dismissal disputes, the primary remedy the employee seeks is a declaration of the labor tribunal or court that the employer lacked just cause for termination, and therefore the employee should be reinstated and made whole for lost wages from the date of termination to the date of reinstatement. The employee’s angle is to be reinstated and then, from a position of strength, negotiate for a large settlement to end the dispute.

Five Stages of Dispute Resolution

Depending on which track the employee plaintiff has chosen, there are potentially up to five stages of wrongful dismissal dispute in South Korea, from the initial labor tribunal to the country’s Supreme Court.

Initial Labor Tribunal

The Ministry of Employment and Labor (MOEL) has established a labor tribunal system under the National Labor Relations Commission (NLRC), which operates 13 offices in cities around the country. Two additional commissions do not operate under the control of MOEL — a Jeju Provincial Labor Relations Commission delegated to the supervision of the provincial government on Jeju Island and a Seafarers’ Labor Relations Commission under South Korea’s Fisheries Ministry.

Labor tribunals at the regional commissions consist of a three-member panel, whose members are each drawn equally from pools of commissioners representing labor, management, and the public interest. Tribunal members may or may not have legal education (many employment lawyers do volunteer as tribunal members), but they all have an interest in labor relations issues and professional experience.

The labor tribunal process in a wrongful dismissal case starts with a notice to the employer demanding its written response to the employee’s complaint, and evidence in support of the employer’s position, usually within seven days of receipt. When the employer appoints counsel, lawyers can often obtain an extension of time to prepare, but in most cases, the tribunal will only grant an additional seven days.

The labor tribunal is a “come as you are” affair. The parties and the tribunal do not have subpoena power and cannot compel the production of evidence. The employer bears 100% of the burden of proof — the employee need only establish the fact of wrongful dismissal, after which the burden shifts to the employer to prove just cause for termination.

Additionally, the employer is only permitted to defend the causes stated in the written notice of termination that is required under Article 27 of the LSA. Evidence discovered after termination and during the tribunal process may not be considered by the tribunal, which makes the employer’s investigation prior to termination a critical matter.

South Korea’s working language and the language of the tribunal are, unsurprisingly, the Korean language. All submissions to the tribunal must be prepared in this language; where a multinational employer’s records and other evidence are maintained in English, there will be a significant translation burden.

Parties are encouraged to settle the dispute during this process. RLRCs operate conciliation and mediation functions and often direct disputes to these functions before scheduling a tribunal hearing. When a settlement is reached through the auspices of the RLRC, the settlement is final, binding, and nonappealable. But settlement is unlikely before the conclusion of the initial tribunal process.

After the employer’s initial written response and evidence are submitted, the employee will respond; there may be two or three more rounds of briefs exchanged before the tribunal hearing convenes. After about 60 days of frantic effort (which could be less, as scheduling is up to the discretion of the case officer), the parties will be questioned by the three-member panel about the written record in a single, 45- to 50-minute hearing.

Because the hearing is so short, the parties do not have a meaningful opportunity to present witnesses — especially where the witness is foreign and would need interpretation.

The tribunal usually informally discloses its decision to the parties in the early evening after the date of the hearing. Its written decision will arrive by mail within 30 days after the hearing. In total, the labor tribunal process takes 60 to 90 days from the date an employee petitions for redress.

Even though the tribunal members and the LSA may seem to be slanted in favor of employees, at the labor tribunal, employers prevail more often than employees.

Central Committee of the NLRC

After the decision of the initial labor tribunal is received by mail, either party has an automatic right of appeal to the Central Committee of the NLRC.

The Central Committee is in the city of Sejong, which was established in 2007 to become South Korea’s new administrative capital. It is not connected to Korea’s efficient high-speed rail network, unfortunately, which means the hearing of the Central Committee will require several hours of travel for the parties and/or attorneys.

The Central Committee will conduct its process almost identically to the initial labor tribunal: two or three rounds of written submissions, possibly an attempt to promote settlement, and a single 45- to 50-minute hearing in Sejong. After the hearing, the Central Committee will announce its decision and mail the written decision within 30 days after the hearing. All told, the appeal to the Central Committee will be resolved in another 60 to 90 days.

Settlement is, in principle, desired by the Central Committee and in further appeals through the court system, but as with the initial labor tribunal, the likelihood of settlement is low.

First Instance Court Proceedings

Depending on the theory of the claim and the judicial district, appeals from the labor tribunal system may be heard by the district court in the district having jurisdiction over the dispute or the Seoul Administrative Court, South Korea’s sole specialized administrative court.

Sometimes employees eschew filing their claim with an RLRC and commence the dispute in a district court, skipping the labor tribunal track entirely. This is uncommon, because the labor tribunal system is free of cost and the employee need not hire a licensed attorney, but sometimes wrongful dismissal cases do begin in district court.

LSA Article 28 establishes a three-month period for employees to petition the labor tribunal for redress. But if an employee is terminated and three months have passed since the date of termination, the employee still has the right to sue in civil court. Interestingly, there is no time limit for wrongful dismissal claims in the civil court system.

District Court

There are 18 district courts around South Korea. As approximately half of all Koreans and many businesses are in the greater Seoul metropolitan area, Seoul itself has five district courts.

At the district court, trials are overseen by a panel of three judges, led by a senior judge. The junior judges assigned to a case support the senior judge with legal research, preparation of the decision, and administrative scheduling. Depending on their experience and the personality of the senior judge, junior judges may also directly question witnesses and counsel.

From the date of filing to judgment, it typically takes only 12 to 14 months. Korean trials are not concentrated trials, meaning the courtroom activity will be limited to brief appearances between 15 and 30 minutes to review evidence and arguments previously submitted in writing by the parties, discuss party requests for production of evidence and witnesses, and schedule future trial sessions. When witnesses appear, longer trial sessions may be scheduled, but even in those cases, trial sessions are not lengthy. There will be little room for courtroom theatrics and drama, and the trial will largely be conducted on paper.

Seoul Administrative Court

The Seoul Administrative Court is a specialized bench for the Seoul district addressing claims of error by administrative agencies of the Korean government, including the NLRC. The court is made up of professional judges. Its process is largely the same as the process in a district court, but is slightly accelerated in comparison to the district court.

From the date of filing to judgment, disputes in the Seoul Administrative Court may be expected to be resolved in six to nine months.

High Court; Intermediate Court of Appeal

South Korea’s intermediate courts of appeal are the high courts. There are six high courts in major cities around the country: Seoul, Busan, Daegu, Gwangju, Daejeon, and Suwon. Unexpectedly, there is no high court for the city of Incheon; appeals from the Incheon District Court go to the Seoul High Court.

The high court accepts appeals from the district courts, the Seoul Administrative Court, family courts, and specialized bankruptcy courts.

Appeals to the high court are trials de novo, or new trials. Either party may introduce new evidence and new arguments, as well as contest findings of fact and law by the lower court. The composition of the trial bench, process, and timing are also similar to the initial trial in a district court — 12 to 14 months exchanging briefs and evidence, and limited appearances in the courtroom.

Supreme Court

After the high court issues its decision, either party to the dispute may appeal to the Supreme Court if dissatisfied with the decision.

Appeals to the Supreme Court are not trials de novo. Formally, no new evidence may be considered, although parties usually do try to influence the court to consider new evidence when it has been discovered. Appellants may only argue issues of interpretation and application of law and logic, or procedural errors by the lower court. For example, the Supreme Court may find that lower courts overlooked certain legal issues or evidence. In such cases, the court may remand cases back to the lower levels for reconsideration, subject to instructions from the Supreme Court. Otherwise, if it takes up an appeal, the Supreme Court will limit its review to the evidence developed in past proceedings and whether the law has been properly applied.

Appeals to the Supreme Court are common. Annually, up to about 50,000 cases are appealed to the Supreme Court. These cases are triaged and disposed of by a corps of experienced judges from lower courts and academic experts in jurisprudence, assigned to the Supreme Court as research judges and juridical researchers.

Litigants are each offered a single opportunity to submit a brief addressing the lower courts’ decisions, and the research judges and juridical researchers will give the brief perhaps three or four minutes’ consideration to decide whether to recommend the court should affirm the high court’s decision, remand the case back for further consideration, or take it up for further consideration and judgment by the Supreme Court.

Additionally, an appellant is afforded only 20 days to prepare argumentation and the respondent — that’s the employer — will be afforded only 10 days from receipt of the appellant’s arguments to respond. This makes the single submission to the Supreme Court of paramount importance for counsel, and it is usually advisable to begin initial preparation of the Supreme Court brief immediately after conclusion of high court proceedings, regardless of whether the employee has signaled an intention to appeal.

Every case will be considered by a four-judge panel drawn from the 14 members of the Supreme Court, guided by the preliminary screening of the research judges and juridical researchers. The majority of appeals are quickly dismissed. Tens of thousands of cases will be adjudicated by the four-judge panel guided by the initial screening, and a very few — up to a couple of dozen annually — may be deemed so important that the court will convene an en banc hearing, where all judges of a particular court hear a case, at which parties may present arguments.

Brendon Carr and Eunhee Kim are attorneys with HHC Employment & Labor Law in Seoul, South Korea. © 2025 HHC Employment & Labor Law. All rights reserved. Reposted with permission of Lexology.