 On January 22, 2016, the Ministry of Employment and Labour (MOEL) announced Guidelines on Fair Employee Evaluations and Guidelines on Rules of Employment (collectively, the Guidelines) as part of its efforts to reform labour markets, create more jobs and increase employment stability. The Guidelines reflect labour-related case law and statutory law, such as the Labour Standards Act and the Act on Prohibitiaon of Age Discrimination in Employment and Aged Employment Promotion.Below is a summary of the main terms of the Guidelines: Guidelines on Fair Employee Evaluations The Guidelines on Fair Employee Evaluations consist of two parts: performance and ability-based resource management and termination of employment contracts. The ‘performance and ability-based resource management’ section regulates resource management from the time of hiring until termination. It introduces recruiting and selection tips to ensure that companies hire employees based on their ability to do the work, rather than simply on academic background and test scores. That change is designed to improve competitiveness and fairness. This guideline also requires that companies provide adequate compensation, including salary raises and promotions, to employees using a fair evaluation process, and to help employees improve their capabilities by implementing employee training programmes and placing employees in appropriate positions given their skill sets. Companies are also required to establish systems to support employee career moves when employees resign. The guidelines on ‘termination of employment contracts’ section prescribes standards and procedures for terminating employment contracts. It permits several types of dismissals previously recognised under existing law and precedent, including disciplinary dismissals, layoffs (redundancy) and ordinarily permitted dismissals. It also identifies restrictions on dismissals, including just cause and proper dismissal procedures, for each type of permitted dismissal. The ‘termination of employment contracts’ section limits an ‘ordinary dismissal on the grounds of poor performance’ to exceptional cases where employees have shown ‘noticeably’ low job performance to the point that they burden their colleagues. It also emphasises that even in such cases, the dismissal can be justified only if it complies with strict standards and procedures. Additionally, it provides that if employees are evaluated as being noticeably underperforming, before dismissing them, employers must first attempt to help them improve their performance, such as by giving the employees vocational training or assigning them to other responsibilities. If such efforts fail to improve the employees’ job performance or attitude, then the employer may legitimately terminate the employee. Guidelines on rules of employment While the Supreme Court acknowledges that making any changes to the rules of employment that may harm employees requires consent of a majority of labour representatives or the employees, it has held that revisions to employment rules may be considered valid, even absent of such consent, under exceptional circumstances, if the revisions are judged to be socially acceptable and reasonable. Given that proposed extensions of the retirement age and reorganisation of the wage system, such as a ‘wage peak’ system, are changes that may harm certain employees, the MOEL developed the Guidelines on the Rules of Employment to give shape to the Supreme Court’s decisions. The Guidelines on the Rules of Employment provide that the effects of revisions to the rules of employment would be determined based on the totality of circumstances. This includes: the degree of harm to employees; the need for such changes; the appropriateness of the proposed changes given the needs; improvements to other employment conditions; efforts to thoroughly communicate with labour unions; and the existence of other similar rules within the industry. Expected effects _______________ Poongsan Bldg. 23 Chungjeongro, Seodaemun-gu, Seoul 03707, Korea |
The Korean government announces Guidelines on Fair Employee Evaluations and Rules of Employment to help enforce its labour reforms
