Dismissal at Workplaces with Fewer Than 5 Employees in Korea: What Protections Still Apply? (2026 Guide for Foreign Workers)

Is It Really True That Employers Can Dismiss Workers Freely at Workplaces with Fewer Than 5 Employees?

The claim that "employers can dismiss workers freely at workplaces with fewer than 5 employees" circulates widely online, but it is only half true. The Labor Standards Act (근로기준법) applies differently depending on the number of full-time workers, and it is true that certain provisions do not apply to workplaces with fewer than 5 employees. However, not all dismissal-related protections disappear. This article does not cite specific court rulings; it focuses on the statutory provisions and summarizes what is practically important.

Dismissal-Related Provisions That Do NOT Apply to Workplaces with Fewer Than 5 Employees

Article 11(1) of the Labor Standards Act (근로기준법 제11조 제1항) states that "this Act applies to all businesses or workplaces that ordinarily employ 5 or more workers," and Article 11(2) allows Presidential Decree to vary the scope of application of certain provisions.

Accordingly, the following key dismissal-related provisions do not apply to workplaces with fewer than 5 employees:

• Article 23 of the Labor Standards Act (근로기준법 제23조) — Restrictions on Dismissal, etc.: This is the provision prohibiting dismissal without just cause. At workplaces with 5 or more employees, a violation of this article constitutes unfair dismissal (부당해고); at workplaces with fewer than 5 employees, this article does not apply at all.
• Article 27 of the Labor Standards Act (근로기준법 제27조) — Written Notice of Grounds for Dismissal: The obligation to notify the worker in writing of the grounds and timing of dismissal also does not apply to workplaces with fewer than 5 employees.
• Article 28 of the Labor Standards Act (근로기준법 제28조) — Application for Remedy against Unfair Dismissal: The right to file a remedy application with the Labor Relations Commission is recognized only for workers at workplaces with 5 or more employees.

In short, an employer at a workplace with fewer than 5 employees does not violate the Labor Standards Act merely by dismissing a worker without "just cause," and the worker must contest the dismissal through a civil lawsuit rather than a Labor Relations Commission remedy application.

Note for foreign workers: Even if your employment contract does not mention these distinctions, the statutory rules above determine your legal rights — your contract cannot grant you fewer rights than the law guarantees.

Dismissal-Related Provisions That STILL Apply to Workplaces with Fewer Than 5 Employees

That said, employers are not free from all constraints. The following provisions apply regardless of workplace size.

1. Obligation to Give Advance Notice of Dismissal — Article 26 of the Labor Standards Act (근로기준법 제26조)

An employer who intends to dismiss a worker must give at least 30 days' advance notice. If the employer fails to give 30 days' notice, they must pay an advance notice of dismissal allowance (해고예고수당) equal to at least 30 days' ordinary wages. This provision applies to workplaces with fewer than 5 employees without exception.

However, the advance notice obligation is waived in the following circumstances (proviso to Article 26 of the Labor Standards Act):
- A daily worker who has been continuously employed for less than 3 months
- A worker employed for a fixed period of 2 months or less
- A monthly-paid worker who has been employed for less than 6 months
- Cases where it is impossible to continue the business due to a natural disaster, emergency, or other unavoidable cause
- Cases where the worker has deliberately caused serious disruption to the business or inflicted property damage

2. Prohibited Periods for Dismissal — Article 23(2) of the Labor Standards Act (근로기준법 제23조 제2항)

A worker may not be dismissed during the period of medical treatment for a work-related injury or illness and for 30 days thereafter, or during maternity leave (출산 전후 휴가) and for 30 days thereafter. This provision applies to workplaces with fewer than 5 employees as well.

3. Obligation to Pay Severance Pay (퇴직금)

Under the Act on the Guarantee of Workers' Retirement Benefits (퇴직급여 보장법), severance pay must be paid to any worker who has been continuously employed for at least 1 year and works at least 15 hours per week. Severance pay must be paid within 14 days of the date of retirement; if payment is delayed, a delay interest rate of 20% per annum applies under Article 17 of the Enforcement Decree of the Labor Standards Act (근로기준법 시행령 제17조).

What a Dismissed Worker at a Workplace with Fewer Than 5 Employees Can Do

• If the advance notice of dismissal allowance is not paid: File a complaint (진정) with the regional office of the Ministry of Employment and Labor.
• If wages or severance pay are unpaid: Likewise, file a complaint or a criminal accusation (고소).
• To contest the validity of the dismissal itself: File a civil lawsuit seeking confirmation that the dismissal is void (해고무효확인 소송).
• Unemployment benefits (실업급여): If you have at least 180 days of insured employment (피보험 단위기간) and your separation was involuntary, you are eligible. As of 2026, the daily upper limit is 68,100 won.

Closing Remarks

Even at a workplace with fewer than 5 employees, dismissing a worker without advance notice, failing to pay severance pay, or withholding wages is a clear violation of the law. Both employers and workers need to know exactly where this line is drawn in order to avoid unnecessary disputes.

If you want to calculate your advance notice of dismissal allowance or severance pay, use the unemployment benefit eligibility checker and severance pay calculator at Workbear (workbear.kr). If you are unsure how to draft a complaint, the AI complaint drafting feature can also help.

This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.