South KoreaI'm being told I'll be dismissed for business reasons.
In South Korea, dismissal for business reasons is only lawful if the employer proves genuine managerial necessity, selects employees fairly, makes sincere efforts to avoid dismissal, and gives 30 days’ notice or severance pay.
What the Law Says
South Korean labor law strictly limits dismissals for business reasons. Employers must meet four statutory criteria — necessity, fairness, effort to avoid dismissal, and procedural compliance — or the dismissal is invalid.
Under the Labor Standards Act (LSA), an employer may dismiss a worker for 'urgent managerial necessity' — such as serious financial hardship, restructuring, or technological change — but only if all four conditions are satisfied.
First, the reason must be objectively urgent and unavoidable — for example, sustained losses requiring workforce reduction of at least 50% of affected roles. Second, selection of dismissed employees must be based on objective, reasonable criteria (e.g., performance, seniority, family status) — not discrimination or retaliation.
Third, the employer must make sincere efforts to avoid dismissal, including reassignment, reduced hours, early retirement incentives, or training for alternative roles. Fourth, the employer must give at least 30 days’ written notice or pay one month’s average wage as substitute notice.
Additionally, under the LSA, workers with at least one year of continuous service are entitled to severance pay equal to 30 days’ average wage per year worked — payable even in business-reason dismissals.
Statutory TextAn employer may dismiss a worker only where there is urgent managerial necessity and the employer has made sincere efforts to avoid dismissal.
— Labor Standards Act, s. 24 — Dismissal for Urgent Managerial Necessity
Statutory TextThe employer shall give the worker at least thirty days’ prior written notice of dismissal or pay the worker an amount equal to thirty days’ average wage.
— Labor Standards Act, s. 26 — Notice of Dismissal
Statutory TextWhere a worker has been employed continuously for one year or more, the employer shall pay severance pay equivalent to thirty days’ average wage for each year of continuous service.
— Labor Standards Act, s. 34 — Severance Pay
What to Do
Confirm in writing whether the dismissal is truly for urgent managerial necessity — ask for documentation (e.g., financial statements, restructuring plans).
Check if you were selected using objective, non-discriminatory criteria — compare treatment with peers in similar roles.
Verify whether the employer offered alternatives like reassignment, reduced work, or early retirement before dismissal.
Ensure you receive either 30 days’ notice or one month’s average wage as notice pay — plus full severance if employed ≥1 year.
File a complaint with the local Labor Office (Ministry of Employment and Labor) within 3 months if your rights were violated.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.