Unfair Dismissal Fines in Korea: Legal Penalties Every Employer Must Know

What Is Unfair Dismissal?

Article 23 of the Labor Standards Act (근로기준법 제23조) requires that an employer have just cause when dismissing a worker. Any dismissal carried out without just cause — or without following the legally required procedures (written notice, advance notice of dismissal, etc.) — constitutes unfair dismissal (부당해고). Reasons such as "I don't like the employee" or "business is difficult" alone are not recognized as just cause.

3 Types of Sanctions Imposed on Employers for Unfair Dismissal

1. Criminal Punishment — Fine or Imprisonment

Article 107 of the Labor Standards Act (근로기준법 제107조) provides that an employer who violates Article 23 (restrictions on dismissal, etc.) shall be subject to imprisonment of up to 5 years or a fine of up to ₩50,000,000. Because this is a criminal penalty, it may result in a criminal record. In the case of a corporation, the corporation itself may also be fined under the dual-liability provision of Article 115 (제115조).

However, criminal punishment proceeds only when the worker files a complaint or accusation, or when the Labor Office initiates an investigation on its own authority. In practice, this is often pursued in parallel with a remedy application to the Labor Relations Commission.

2. Labor Relations Commission Remedy Order — Reinstatement + Back Pay

A worker may file a remedy application with the Regional Labor Relations Commission within 3 months of the date of unfair dismissal (Article 28 of the Labor Standards Act, 근로기준법 제28조). If the Labor Relations Commission rules that the dismissal was unfair, it issues the employer an order for reinstatement to the original position and an order to pay wages equivalent to the amount not received during the period of dismissal.

3. Enforcement Levy — Repeatedly Imposed for Non-Compliance with Remedy Order

If an employer fails to comply with a remedy order issued by the Labor Relations Commission, an enforcement levy (이행강제금) is imposed under Article 33 of the Labor Standards Act (근로기준법 제33조). The specific amounts are as follows:

Non-compliance with a reinstatement order: up to ₩20,000,000
Non-compliance with a monetary compensation order: up to ₩5,000,000

The enforcement levy may be imposed repeatedly — up to twice per year for 2 years, meaning a maximum of 4 times. If an employer refuses to comply to the end, the total can reach up to ₩80,000,000 (based on a reinstatement order), making it a substantial pressure mechanism.

Failure to Give Advance Notice of Dismissal Is Also a Separate Offense

Separately from unfair dismissal, if an employer dismisses a worker immediately without giving 30 days' advance notice, the employer must pay at least 30 days' ordinary wages as an advance-notice allowance (해고예고수당) (Article 26 of the Labor Standards Act, 근로기준법 제26조). Failure to pay this is also subject to criminal punishment (imprisonment of up to 2 years or a fine of up to ₩20,000,000).

How Is It Different for Workplaces with Fewer Than 5 Employees?

Article 23 of the Labor Standards Act (prohibition of unfair dismissal) does not apply to workplaces with fewer than 5 regularly employed workers. Accordingly, the remedy application to the Labor Relations Commission and the enforcement levy system cannot be used. However, the advance-notice-of-dismissal provision (Article 26) does apply even to workplaces with fewer than 5 employees, so dismissing a worker without notice still triggers the obligation to pay the advance-notice allowance.

Note for foreign workers: Your employment contract may provide terms different from the statutory minimums above. Always check your contract alongside the applicable law.

What Should You Do If You Have Been Unfairly Dismissed?

Secure evidence: Keep text messages, emails, recordings, and any other documentation of the dismissal notice.
File a remedy application within 3 months: The right to file a remedy application with the Labor Relations Commission expires 3 months after the date of dismissal.
File a complaint with the Labor Office in parallel: If you wish to pursue criminal punishment, you may submit a complaint or accusation to the competent Regional Employment and Labor Office.

If severance pay (퇴직금) or unpaid wages are also at issue, use the severance pay calculator at Bylaw (workbylaw.com) to check your estimated severance pay in advance, and use the AI search feature to quickly understand the remedy procedures applicable to your situation. The complaint-drafting feature also makes it easy to prepare documents for submission to the Labor Office.

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