Improving the Korean law on terminating labour contracts due to economic reasons

Abstract

Although the Law on labour standards of Korea includes provisions on terminating labour contracts due to economic reasons, most of these provisions remain inoperative. In practice, to deal with violations on terminating labour contracts due to economic reasons, instead of amending the statutory law, standards made by the courts are often applied in Korea. The interpretation and judgment of the courts, however, varies from case to case, which leads to the inconsistency in the application of those standards and causes many problems. The paper clarifies the concept, origin and contents of legal provisions on terminating labour contracts due to economic reasons. It also reviews the standards applied by the courts to deal with cases of terminating labour contracts due to economic reasons and offers recommendations for improving the Korean law in this regard.