Did the Company Really Try Everything First? What "Efforts to Avoid Dismissal" Actually Means in Korea

This requirement exists because Korean labor law treats dismissal as a last resort, not a first option. Before letting anyone go, the book I've been studying lists a whole menu of alternatives an employer is expected to seriously consider: reducing the use of outsourced, subcontracted, temporary, or dispatched workers first; freezing new hiring and not renewing short-term contracts; cutting back on production, overtime, and unused leave through selective working hours; reducing directors' salaries, bonuses, and other cost-heavy allowances; temporarily suspending operations rather than ending them permanently; and promoting early retirement or voluntary resignation programs before resorting to outright dismissal.

What struck me most, though, were the actual court cases showing what happens when a company skips these steps — or only pretends to follow them.

In one case, a company closed a plant in a certain area because of chronic financial losses but made absolutely no effort to transfer the affected employees to its other plants, and did not even attempt something as basic as temporary suspension of work instead of permanent dismissal. The courts ruled plainly: the company had not completed genuine efforts to avoid dismissal, so the dismissals could not stand.

In another case, a company anticipated needing to reduce its winter-season workforce, yet instead of encouraging voluntary retirement or making a real plan to improve efficiency ahead of time, it kept hiring new employees right up until the layoffs happened. The court found it impossible to accept that this company had genuinely tried to avoid the resulting dismissals — because their actions during that period told a completely different story than their stated intentions.

There's also a case that I think many of us can relate to on an emotional level. An employer offered an "honorary resignation" to an employee who was going to retire from the company within nine months anyway. Since that employee was already so close to his natural retirement, letting him go early through dismissal would not have actually reduced the company's labor costs in any meaningful way. When he refused the honorary resignation, the company dismissed him regardless — and the court ruled this could not be accepted as a socially fair or objective dismissal for managerial reasons, precisely because dismissing him didn't even achieve the cost-saving purpose the whole managerial dismissal process is supposed to serve.

I also want to mention something the book raised about how fairly a company selects who gets let go, once dismissal genuinely becomes necessary. Korean law requires that the criteria used to choose who is dismissed be rational and fair, and specifically prohibits gender discrimination in that selection. But "fair" does not simply mean picking one obvious factor like age, length of service, or education and applying it mechanically. In one case, a local government dismissed temporary employees strictly by age, from oldest to youngest, without weighing anything else and without even consulting employee representatives first — the court called this an abuse of the right to manage personnel, precisely because it ignored individual circumstances entirely. In another, an employer used educational background as the sole criteria, essentially telling only less-educated staff to resign — this too was ruled unfair, because it wasn't a rational or job-related basis for deciding who stays and who goes.

There is one particularly interesting ruling that I think protects workers in a very specific, common situation: an employee who kept refusing to transfer to a different department, and who also declined the company's suggestion to voluntarily resign, was dismissed largely because of those two refusals. The court ruled this selection was not rational or fair — even though the company had properly consulted with the labor union beforehand — because simply refusing a transfer or refusing to resign voluntarily is not, by itself, a valid basis for choosing someone for dismissal over other equally-situated employees.

I share these details, kababayan, because I know how easy it is for an employer to say "wala akong magagawa, dapat talaga kitang tanggalin," as if the decision were purely mechanical and unavoidable. What these cases show is that Korean labor authorities expect real thought, real alternatives, and real fairness behind that decision — not a shortcut dressed up as inevitability. If you are ever told you are being let go "for managerial reasons," it is worth asking, gently but clearly: what did the company actually try before reaching this decision, and how exactly was I chosen over my co-workers?

Susunod na natin pag-usapan kung ano ang mga Voluntary Early Retirement Programs, o ERP, na madalas gamitin ng mga kumpanya bilang alternatibo sa dismissal. Ingat po tayong lahat.

About the Author

English Instructor in South Korea | 22 Years of Teaching Experience

Majella Pagayon is the founder of Pinoy Sarang, a community platform dedicated to helping Filipinos navigate life, work, education, and immigration in South Korea. She regularly writes practical guides, safety tips, and educational resources for Filipinos living and working abroad.