South Korea: COVID-19 and its implication for employers
The main law governing the relationship between employers and employees in Korea is the Labour Standards Act (“LSA”) and its Enforcement Decree. There are other enactments relating to part time employees and health and safety standards. It is also notable that employers who employ ten or more people must issue and have in place “Rules of Employment” (“ROE”). These are expansive and detailed specific rules affecting the particular workplace – a handbook so to speak. Generally, from a legal point of view, Korea would be considered as employee friendly. However, there is a price to be paid. Korea has a long hours working culture. It is also generally much more hierarchical than in the West though this latter consideration is more a product of the culture than the law.Prophylactic measures without lay offs
As Dostoevsky argued in The Brothers Karamazov, we are all connected: a negative consequence for one, will inevitably have consequences for all. For example, the employee who is made redundant will have less money to purchase the goods or services of a business. A ripple effect. There are a number of prophylactic measures a business can take without resorting to making staff redundant even if this is possible at all. These include:- Reducing work hours
- Reducing salary and / or delaying salary payments
- Use of holidays
More serious measures
Suspension of the Business It is possible for a business to temporarily cease its activities i.e. to suspend its business. In the case of a suspension i.e. without the employees’ consent then the business must pay not less than 70% of average wages – the suspension allowance. If the company’s situation is so dire that it is unable to continue to pay the suspension allowance, it may be permitted to pay less provided there is agreement from the Labour Relations Commission. Of course, it may be possible to avoid paying a suspension allowance with the employees’ consent but this would obviously need to be handled very carefully. Redundancy Theoretically, it is possible to terminate an employee’s contract for “managerial reasons”; however, Korea is arguably much more restrictive in this regard than other jurisdictions. An employer would need to satisfy at least the following requirements pursuant to Article 24 LSA:-- Immediate managerial reasons. This would include financial difficulties for an extended period e.g. 2-3 years. In the circumstances, it is difficult to see how COVID 19 would qualify due to the relatively short period it has been here.
- The company must show that it has made every effort to avoid redundancies.
- The selection criteria must be fair and reasonable.
- There must be consultation and not less than 50 days’ notice provided.
- the provision of masks and hand sanitisers at the work place
- temperature checks
- staggering work hours or implementing a work from home policy
- distancing in the work place / minimising travel, face to face meetings etc.