Thursday, January 25, 2018

Korean Labor Standards Act (2)

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This is the second posting on Korean Labor Standards Act (hereafter referred to as “the Act”). As you might know, the Act aims at setting up “the standards for terms and conditions of employment in conformity with the Constitution, thereby securing and improving the fundamental living standards of workers and achieving a well-balanced development of the national economy”. According to the purpose of the Act, I’d like the foreign employees in Korea informed the key Articles of the Act and to secure their basic rights as workers. In this posting, I’m going to introduce the important Articles of the Act after you make a labor contract. Please note that in principle, the Act shall apply the workplaces who have five or more employees. On the other hand, several Articles shall also exceptionally regulate the workplaces of which workers are four or less. However, in general, most Articles related to basic labor standards shall be applied to every workplace. I’m going to mention it if the Articles does not regulate the workplaces of which workers are less than five.    

First, I’d like to inform you of Article 15 of the Act. If you find that there is a clause against the Act in your labor contract after signing it, please remember the Article 15 of the Act as follows.

Article 15 (Labor Contracts in Violation of This Act)

(1)  A labor contract which has established terms and conditions of employment not in compliance with the standards prescribed by this Act shall be null and void to that extent.

(2)  Those parts made null and void in accordance with paragraph (1) shall be governed by the standards prescribed by this Act.

Based upon the Article above, you may assert that the clause shall be null and void to that extent, and demand the standards stated by the Act.  


Second, what can be done if all the clauses of the labor Contract are legal, but they are not complied with? If you face difficulties working with an employee ignoring the Contract, please note the Article 19 of the Act. I’d make it clear that the paragraph (2) of the Article 19 of the Act does not regulate the workplace of which workers are less than five.

Article 19 (Breach of Terms and Conditions of Employment)

(1)  When any of the terms and conditions of employment as expressly set forth pursuant to Article 17 is not observed, the worker concerned shall be entitled to claim damages on the ground of the breach of the terms and conditions of employment and may terminate the labor contract forthwith.

(2)  When a worker intends to claim damages in accordance with paragraph (1), he/she may file a claim with the Labor Relations Commission, and, if the labor contract has been terminated, the employer concerned shall provide travel expenses for returning home to the worker who changes his/her residence for the purpose of taking up a new job.


Third, it is necessary to know about the unfair dismissal. I have received many inquiries of unfair dismissal from the expatriates. On unfair dismissal, Article 23 of the Act prescribes as below and please keep in mind that the paragraph (1) of the Article 23 shall be only applied to the workplaces having five or more regular workers.


Article 23 (Restriction on Dismissal, etc.)

(1)  An employer shall not, without justifiable cause, dismiss, lay off, suspend, or transfer a worker, reduce his/her wages, or take other punitive measures (hereinafter referred to as "unfair dismissal, etc.") against him/her.

(2)  An employer shall not dismiss a worker during a period of suspension of work for medical treatment of an occupational injury or disease and within 30 days immediately thereafter, and any woman before and after childbirth shall not be dismissed during a period of suspension of work as prescribed by this Act and for 30 days immediately thereafter: Provided, That this shall not apply where the employer has paid a lump sum compensation as provided for under Article 84 or where the employer may not continue to conduct his/her business.


Fourth, an unexpected notice of dismissal must be an embarrassing one. The Articles 26 and 27 of the Act prescribes on prior notice of dismissal. Please note that Article 27 of the Act does not regulate the workplace of which workers are less than five. The Articles are as follows;       

Article 26 (Advance Notice of Dismissal)

When an employer intends to dismiss a worker (including dismissal for managerial reason), he/she shall give the worker a notice of dismissal at least 30 days in advance of such dismissal, and, if the employer fails to give such advance notice, he/she shall pay that worker ordinary wages for not less than 30 days: Provided, That this shall not apply where a natural disaster, calamity or other unavoidable circumstances prevent the continuance of the business or where the worker has caused a considerable hindrance to the business or inflicted any damage to the property on purpose, cases that fall under any cause determined by Ordinance of the Ministry of Employment and Labor.

Article 27 (Written Notice of Grounds, etc. for Dismissal)

(1)  When an employer intends to dismiss a worker, he/she shall notify the worker in writing of grounds and timing for the dismissal.

(2)  The dismissal of a worker shall become effective only upon a written notice pursuant to paragraph (1).

(3)  Where an employer has given a worker an advance notice of dismissal under Article 26 in writing, stating grounds and timing for dismissal, the employer shall be deemed to have given notification under paragraph (1).  


Fifth, payments of wages and severance would be an issue if you’re dismissed or resign, or a labor contract terminates. On the settlement of payments, the Article 36 states as follows;

Article 36 (Settlement of Payments)


When a worker dies or retires, the employer shall pay the wages, compensations, and other money or valuables within 14 days after the cause for such payment occurred: Provided, That the period may, under special circumstances, be extended by mutual agreement between the parties concerned.


Additionally, the Act also states the interest on delayed payments. The Article 37 prescribes as below;

Article 37 (Interest for Delayed Payment of Wages)

(1)  When an employer fails to pay the whole or a part of the wages and the allowances (referring to only lump-sum allowances) provided for in subparagraph 5 of Article 2 of the Guarantee of Workers' Retirement Benefits Act which he/she is liable to pay under Article 36 within 14 days after the cause for such payment occurred, he/she shall pay interest accrued for the delayed days from the following day to the day of the payment in accordance with the interest rate prescribed by Presidential Decree by taking account of the economic situations such as overdue interest rates etc. applied by the banks established under the Banking Act within the limit of 40/100 per year. <Amended by Act No. 10303, May 17, 2010>


(2)  The provisions of paragraph (1) shall not apply where an employer delays the payment of wages for natural disasters, calamities, or other reasons prescribed by Presidential Decree, for the period in which the said reasons exist.

I’ve roughly informed you of the Articles of the Act worthy of note after you sign a labor contract. It might be tricky that several Articles does not regulate the workplace having workers less than five. In sum, among the Articles that I’ve mentioned so far in this posing, the paragraph (2) of Article 19, the paragraph (1) of Article 23 and Article 27 don’t be applied to the workplace of which workers are less than five. Please note that the number of the workers shall be counted according to specific standards prescribed in the decree of the Act, so it is necessary to consult a lawyer which articles shall apply to your workplace if you have labor issues related those Articles above.


In the next and the last posting on Korean Labor Standards Act, I’m going to introduce the legal actions you may take if you’re dismissed unfairly or you’re not paid according to the clause prescribed in your labor contract.


If you have any further inquiries, please send me an email (yhwang618@gmail.com). My office is located near Seoul District Court and Gyodae station in Seoul.



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Monday, January 22, 2018

Korean Labor Standards Act (1)

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I’ve seen not a few expatriates in Korea having troubles with illegal clauses of labor contracts.
I’m going to serially introduce noteworthy Articles of Korean Labor Standards Act (hereinafter referred to as “the Act”. In this posting, the Articles that you may well keep in mind when you enter into a labor contract are informed.
First, when you make a labor contract, an employer shall clarify the conditions including wages, holidays and Annual paid leaves. The relevant Article of the Act is as follows;
Article 17 (Clear Statement of Terms and Conditions of Employment)
(1)     An employer shall state the following matters clearly. The same shall also apply to any alteration of the following matters after entering into a labor contract.
1.       Wages;
2.       Contractual work hours;
3.       Holidays under Article 55;
4.       Annual paid leaves under Article 60;
5.       Other terms and conditions prescribed by Presidential Decree.
(2)     An employer shall deliver the written statement specifying constituent items, calculation methods and payment methods of wages with respect to the wages under paragraph (1) 1 and the matters prescribed in subparagraphs 2 through 4 to workers: Provided, That where the matters under the main sentence is modified due to reasons prescribed by Presidential Decree, such as changes, etc. of collective agreements or rules of employment, such matters shall be delivered to the relevant workers at their request.

Second, a clause prescribing the penalty for breach of the contract is illegal. For instance, the clause stating that in case an employee fails to complete the period according to the contract, he/she shall not be paid the last month salary is null and void. The relevant Article of the Act is as follows;

Article 20 (Prohibition against Predetermination of Penalty for Breach of Contracts)
An employer shall not enter into any contract in which a penalty or indemnity for possible damages caused by the breach of a labor contract is predetermined.

Please carefully review all the clauses when entering into a labor contract. If you notice there is a clause against Korean Labor Standards Act, ask your employer to correct it in order to avoid unnecessary and unpleasant conflict. I would hope that you will work under a legal labor contract in accord with Korean Labor Standards Act.

If you have any further inquiries, please send me an email (yhwang618@gmail.com). My office is located near Seoul District Court and Gyodae station in Seoul. 

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Tuesday, January 9, 2018

English Legal Service for Expatriates in Korea!

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I'm Yunjeong Hwang, an attorney at Korean law.           

I provide English legal service for expatriates in Korea.

My areas are immigration, divorce, lease and criminal defense as well as civil litigation.

I always try to find the best customized solutions for individual clients.    

If you have any further inquiries, please send me an email (yhwang618@gmail.com). My office is located near Seoul District Court and Gyodae station in Seoul. 




Friday, January 5, 2018

Are you a lessee in Korea? (2) On Commercial Building Lease

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Dense towering buildings, crowded people and splendid night views; all of which do describe active Korea where countless of people run their business. As well as Koreans, more and more foreigners with diverse cultural backgrounds do business in Korea as its society is getting more open to different values. When starting business, to decide where to open it may be the first and the most important matter. It naturally involves legal issues. Leasing building for business may bring more complicated legal issues than owing one. Therefore, if you are to do business and lease a building in Korea, you may as well understand the laws on commercial building lease and their applications to practice so as to protect your right as a lessee. Korea has Commercial Building Lease Protection Act (hereafter referred to as “the Act”, which prescribes exceptions to the Civil Act concerning the lease of commercial buildings. I would like to introduce several points worthy of notice concerning the Act.  

1. Scope of Application

According to the Article 2 of the Act, the Act shall apply to the lease of commercial buildings. The ‘commercial buildings’ are defined as buildings subject to business registration under the Article 3 (1) of the Act. In addition, the Act shall not apply the lease of which the amount of deposit exceeds the amount prescribed by Presidential Decree. The amount of deposit under paragraph (1) of the Article 3 depends on the area, and the amount shall be obtained by multiplying the rental value by the rate prescribed by Presidential Decree, 1/100. In particular, as for Seoul, the amount of deposit prescribed by Presidential Decree is 400 million KRW. This is a matter of simple mathematics. If you are a lessor of a commercial building in Seoul; the security deposit is 50 million KRW and the monthly rental fee is 1 million KRW, the obtained deposit is 150 million KRW (= 50 million KRW + 1 million KRW * 100). Then, your lease shall be applied by the Act since the obtained deposit is fewer than 400 million KRW.

2. Counterforce of a Lessee

Article 3 of the Act states “(1) A lease shall become effective against third parties on the day following the date on which a tenant files an application for the transfer of the relevant building and business registration…” Therefore, if you are to claim your right as a lessee of the leased building, you shall file an application for the transfer and complete business registration.

3. Period of Lease

According to Article 9 of the Act, the period of the lease shall be determined a year if it is less than a year or is not determined, but the lessee may claim that such period determined for less than one year is valid. Article 10 of the Act stipulates that “(1) Where a tenant requests for renewal of a contract between six months and one month before the expiration of period of lease, a landlord shall not refuse it without justifiable grounds…” Under the paragraph (2) of the Article 9 of the Act, the lessee shall not claim whole period of lease including the period of initial lease to exceed five years even if he or she requests for renewal of a contract.

4. Overdue Rents and Termination

Article 10-8 of the Act states that “Where overdue rents of a lessee amounts to rents of three terms, a lessor may terminate a contract.” This means that unless a lessee wants to terminate a contract, the total amount of overdue rental fee shall not exceed that of three rental fees. Please understand that this rule shall also apply in the case the fees are not three consecutive months overdue. The total amount of overdue payment matters.  

5. Right of Claim for Increase or Decrease of Rent

According to Article 11 of the Act, the lessor and the lessee may claim an increase or decrease in the future rent or security deposit. However, “in cases of an increase, it shall not exceed the rate set according to the standards prescribed by Presidential Decree.” Under Presidential Decree, the rate “shall not exceed 9/100 of the rents or deposits as at the time when the request is made”. In addition, the paragraph (2) of the Article 11 prescribes that “(n)o claim for increase under paragraph (1) shall be made within one year after the lease contract or agreed increase in rent, etc. is made”.

6. Premium


Collecting premium is an important right of a lessee. Article 10-3 of the Act defines premium as “a price, such as money, paid to a lessor or a lessee, other than deposits and rents, as a price for transfer or use of tangible or intangible property value, including business facilities, equipment, customers, credit, business know-how and business benefits generated from the location of a commercial building, which is paid by a person who conducts or who intends to conduct a business in a commercial building, the subject-matter of the lease”. A new lessee generally intends to pay premiums to a lessee in Korea. According to Article 10-4, a lessor shall not prohibit any lessee from collecting premium from a new lessee without any justifiable grounds.

If you have any further inquiries, please send me an email (yhwang618@gmail.com). My office is located near Seoul District Court and Gyodae station in Seoul. 
 

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Find Out the Option for Less Painful Divorce!

Embed from Getty Images It is not easy to divorce and the proceedings are usually painful. If you make up your mind to go your separate ...