A court has ruled that a hospital owner's dismissal of a physician on grounds of "management reasons" constituted unfair dismissal. The court found there was no evidence of mutual agreement to terminate the employment, and that listing only "management reasons" on the dismissal notice instead of the actual cause violated the Labor Standards Act.
According to the legal community Wednesday, the 13th Administrative Division of the Seoul Administrative Court (presiding judge Jin Hyun-seop) ruled against the plaintiff in April in a lawsuit filed by Mr. A against the chairman of the National Labor Relations Commission, seeking to overturn the commission's decision on an unfair dismissal remedy review.
Mr. A, who operated a clinic in Eumseong-gun, North Chungcheong Province, had hired Mr. B as director of internal medicine. He later reduced Mr. B's salary and, in July 2024, delivered a contract termination notice citing "management reasons," ending the employment relationship. Mr. B then filed for unfair dismissal remedy with the North Chungcheong Regional Labor Relations Commission, arguing that "Mr. A unilaterally notified the termination of the employment relationship." The regional commission upheld Mr. B's request, finding no legitimate grounds for dismissal.
Mr. A applied for review with the National Labor Relations Commission. After his application was rejected, he filed an administrative lawsuit. He argued that Mr. B had accepted the termination of the labor contract and resigned voluntarily, having proposed changes to the resignation date three times after receiving a recommendation to resign.
The court did not accept Mr. A's claims. The bench determined that the employment relationship between the two could not be considered terminated by mutual agreement or by Mr. B's voluntary resignation. "Mr. B clearly protested to Mr. A, expressing the intent that 'a unilateral dismissal notice was given, and I will assert my rights through legal procedures,'" the court said. "This can be viewed as an indication that Mr. A intended to unilaterally terminate the labor contract relationship with Mr. B."
The court added: "Even if Mr. B did propose changing the resignation date three times after receiving notice from Mr. A, it is reasonable to view this as Mr. B negotiating his final working day as a follow-up measure after recognizing that he had been dismissed."
The court also pointed out that Mr. A failed to state the actual reason for dismissal on the contract termination notice. Mr. A claimed he had actually dismissed Mr. B for reasons including "poor work performance" and "false reporting of career history." However, the contract termination notice did not include such content, listing only "management reasons." "Under the Labor Standards Act, for an employer's dismissal of a worker to take effect, the reason and timing of dismissal must be notified in writing, but Mr. A did not state the actual reason for dismissal at all," the court explained.
The court further found that the "management reasons" cited by Mr. A as grounds for dismissal also failed to meet the legal requirements. "The evidence submitted is insufficient to recognize that there was an urgent management necessity warranting Mr. B's dismissal," the court ruled. "Nor can it be said that efforts were made to avoid dismissal or that reasonable and fair dismissal criteria were established to select the subject."
