A court has ruled that it was unjust to fire employees who drew up plans to run a business in the same line of work as their employer during working hours. The decision came because the company violated the disciplinary procedures it was required to follow in the dismissal process.
The Seoul Administrative Court's Administrative Division 12 (Presiding Judge Kang Jae-won) said on June 18 that it dismissed a lawsuit filed by Company A to overturn a remedial retrial ruling on unfair dismissal against the Chairperson of the Central Labor Relations Commission.
Company A provides engineering services and consulting related to agriculture. Three employees of the company, including an employee surnamed B, planned and pursued a business in the same industry during working hours and used the company's technology and asset in the process. They also leaked trade secrets. Company A fired them for violating its work rules.
B and the others applied for relief with the Seoul Regional Labor Relations Commission in Aug. 2024, claiming unfair dismissal, but were rejected. They then sought a retrial with the Central Labor Relations Commission. The commission said that while "the level of discipline was appropriate," the dismissal was unfair because of defects in the disciplinary procedure.
At the time of the discipline of B and others, records showed that four disciplinary Commissioners attended Company A's personnel committee, but in fact only three attended, and the following day four people listened to the audio recording and decided whether to discipline and the level of discipline. In addition, a secret ballot was not conducted when deciding the discipline. The Central Labor Relations Commission pointed out these issues.
Company A's work rules state in the disciplinary management regulations that "a quorum of at least four members is required for disciplinary committee meetings" and "resolutions are decided by majority vote through a secret ballot by the Chairperson and the Commissioners."
Company A then filed an administrative suit, claiming the Central Labor Relations Commission's decision was unjust. In court, Company A argued that although one disciplinary Commissioner did not attend the personnel committee, an attorney with delegated authority attended in the person's place, and since the meeting was recorded with the consent of the other three, there was no procedural defect. It also said that, given the severity of B and the others' misconduct, the dismissal could not be considered invalid even if a secret ballot had not been conducted.
The Seoul Administrative Court did not accept these arguments. The bench said, "Only three Commissioners attended the personnel committee, so the meeting quorum was not met," and "Because the disciplinary committee is a procedure to give the accused a chance to explain, merely listening to the transcript the next day does not mean their right to defense was sufficiently guaranteed." It also said, "Because the secret ballot requirement was not followed, it cannot be ruled out that the Commissioners' decisions might have been different."