A court ruled that a hospital director who fired a doctor after hiring the person who said the person was a board-certified specialist, only to find the person was not actually a specialist, committed unfair dismissal. The court cited the failure to specify the grounds for dismissal beyond notifying only "business reasons," and the lack of sufficient efforts to avoid dismissal.
The 13th Administrative Division of the Seoul Administrative Court (Presiding Judge Jin Hyun-seop) said on Apr. 2 that it ruled against the plaintiff in a lawsuit filed by Director A, who runs a hospital in Eumseong County, North Chungcheong Province, seeking to overturn a Central Labor Relations Commission Chairperson's reexamination decision on relief for unfair dismissal.
A hired B as head of internal medicine through a doctor recruitment site. At the time, the salary was set at 21 million won per month during a three-month probation period, and then 22 million won per month thereafter. Severance pay was to be included in the salary.
A and B later agreed on May 17, 2024, to reduce the monthly salary from 21 million won to 15 million won. On July 26 of the same year, A sent B a contract termination notice. The notice stated, "The contract will be terminated on Aug. 26, 2024, for business reasons."
B filed for relief with the North Chungcheong Regional Labor Relations Commission, claiming unfair dismissal. The regional commission found that A unilaterally notified B of the end of the employment relationship and failed to meet the requirements for dismissal for business reasons under the Labor Standards Act. It also viewed the dismissal as unfair because the actual reason was poor job performance, among other things, yet the notice cited business reasons.
A applied for reexamination with the Central Labor Relations Commission but was rejected for the same reasons. A then filed an administrative lawsuit.
During the trial, A said B claimed at the time of hiring to be a board-certified internist but disclosed just before starting work that B was not a specialist. A also said B's job performance was weak and work attitude insincere, causing the hospital's revenue to plummet and creating a management crisis.
But the court did not accept A's claims. The panel said, "Although A dismissed B for reasons such as false disclosure of experience, poor job performance, and an insincere work attitude, the contract termination notice merely stated dismissal for 'business reasons.'"
The Labor Standards Act requires employers to notify employees of the reason and timing of dismissal in writing. The panel found that A failed to properly notify B of the reason when dismissing B and ruled it "invalid due to a violation of the Labor Standards Act."
The court also found that the requirements for dismissal for business reasons had not been met. Under the Labor Standards Act, an employer who dismisses an employee due to urgent business necessity must make every effort to avoid dismissal. However, the panel determined it was hard to find that there was an urgent business necessity warranting B's dismissal, and efforts to avoid dismissal were not sufficiently recognized.
The panel dismissed A's claim, saying, "The dismissal of B is procedurally unlawful and lacks just cause."