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Specific Grounds for Disciplinary Action or Termination under Korean Labor Law

It is first noted that the basic law in Korea regulating labor standards is the Labor Standards Act (“LSA”), ”), which is applicable to the employers with at least 5 employees.  As for the employers with less than 5 employees, only a part of LSA provisions would be applicable.  And, LSA provisions relating to our comments below are not applicable to these employers with less than 5 employees.  The only statutory restriction for a employer with less than 5 employees is the prohibition of dismissal during a particular period of time such as employee’s illness and childbirth.  That said,  please bear in mind that our comments below are only provided for employers and employees at a workplace with at least 5 employees.

Article 23 of LSA requires a “justifiable cause” if and when an employer takes disciplinary actions, including termination of employment, with regard to its employees.  Korean courts have held that a “justifiable cause” refers to such causes as criminal offence, serious illegal acts, and gross negligent acts, etc. which would make maintaining of the relevant employment relationships no longer possible under generally accepted public notions.

Especially, because a termination of employment is the most extreme measure, taking away an employee’s means of making a living, Korean courts are known to be very strict in applying the above-noted criteria, when it determines whether a particular termination is justified.  Thus, Continue reading


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[Q&A] Leaking Employer’s Confidential Information and Employment Termination : What Is Confidential Information under Korean Law?

“Hello, I am a U.S. citizen working for a Korean listed company.  Recently my company sent me a dismissal notice saying I had breached the employment contract by leaking their confidential information.  Informations at issue are a set of sale/purchase statements of the company.  I downloaded those informations from the company’s server to my personal email account.  But, there has been no warning mark of confidentiality.  My other colleagues have a free access too, and the information sometimes was provided to our suppliers.  Did I really breach the confidentiality of my Korean employer?”  

Leaking employer’s confidential information could result in a termination of the employment contract.  The legal issue, however, still remain whether or not the information can be regarded as a confidential information.

Most employers in Korea have their own rules of employment which state what is a confidential information.  And even an employment contract could list a set of confidential informations which the employee should not disclose to 3rd parties.  But, defining what is a confidential information is a matter of law and, therefore, the Korean court does not always follow the definition which an employer had been set in their internal documents.

The Korean court has well-established precedent that the confidential information should be Continue reading


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Classifying a Foreign Incorporated Corporation as a Domestic Corporation for Korean Tax Purposes: “Actual Business Management Place” Rule

그림 67When a foreign incorporated company does a business in Korea, it is very fundamental to determine whether the company is a domestic or a foreign corporation for Korean tax purposes.  A major difference in tax liability is that, in principle, a foreign corporation is liable for taxes only on the incomes generated in Korea rather than a worldwide income.

In this regard, the Corporate Tax Ac of Korea(“CTA”) defines a “domestic corporation” as a corporation with its headquarter, main office, or actual business management place located in Korea, and a “foreign corporation” as an organization which has its head office or principal place of business in a foreign country.  What makes distinguishing domestic corporation for a foreign corporation under CTA difficult and challenging is the meaning and application of the term of “actual business management place” set forth in CTA.  For example, in a case decided by the Supreme Court of South Korea in 2016, a Singapore incorporated company had challenged the Korean tax authority’s decision that its actual business management place was in Korea.

The Singapore company had a wide variety of international business portfolio and among them was a trading foreign issued corporate bonds including a Korean corporate bond.  The Korean tax authority decided that the company’s actual business management had taken place in Korea after finding the facts that the company had a liaison office in Korea, one of the directors was residing in Korea and financial documents relating to the Korean business was stored and managed in Korea.  And this Continue reading


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[Q&A] Can I Enforce My Washington State Child Support Ruling in Korea?

(Question) I have a question regarding my current situation with my ex-husband. He is a Korean national and working there in South Korea.  I lived there until 2014 when I came back to Washington and filed a divorce complaint here. Since then he has refused to speak with me.  This year my US lawyer duly served him with the paper but he just kept ignoring it.  At any rate, I got a divorce decree and child support ruling for my baby this April.  Now I am wondering how I can enforce my US ruling in Korea, knowing that he is living a  luxurious life and feels that he can just ignore his child and the responsibilities that come with it.

(Answer) I have to say that there is something unclear in this case.  If the court proceedings in Washington(WA) court have been duly made, i.e. (i) the WA court had proper jurisdiction and (ii) he was duly served, you can apply for its execution in Korea. Otherwise, you may initiate the whole process de nuvo in Korea.  The second threshold seems to have been met here. Thus, the real issue here rather is the first one.

Please note that the jurisdiction must be acknowledged in the view of Korean law, not the WA law. Thus, even though the WA ruling says the WA court has proper jurisdiction, the Korean court will Continue reading


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Introduction to the Korean Inheritance Law

[Updated on April 4th] Under the Korean inheritance law, the inheritance comes to fruition immediately when a person is deceased.  The Korean inheritance law, the part V of Civil Act, provides who shall become the inheritor and beneficiary of the property of a deceased person, i.e. estate.  The inheritor and beneficiary, however, shall not always take everything from the estate.  There are separate rules and restrictions on the distribution of the estate in South Korea. In this article, we will explain to you the basic rules and practices of inheritance in Korea.

Who Shall Become the Heirs and How to Distribute the Estate under the Korean Inheritance Law

The basic rule of the Korean inheritance law is that the property of the deceased is distributed according to his or her will.  So, a person who is not categorized as an inheritor by law can become a beneficiary of the estate by the decedent’s will. 

What if there is no valid will?  The Korean inheritance law sets forth the rule of intestate succession.  This rule of intestate succession names the beneficiary and the shares of each beneficiary for a distribution purpose.  

According to the intestate succession rule, persons become beneficiaries in the following order.

Continue reading


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Seoul Family Court Finally Answered the Paternity Case between a Korean Father and His Kopino Children Abandoned in Philippines – Paternity Actions in South Korea

On May 30, 2014, the Seoul Family Court handed down a ground-breaking decision which recognized the paternity between a Korean male and his children born out of lawful wedlock in the Philippines.  The decision marked the first time ever that a Korean Family Court adjudicated on the parentage of so-called “Kopino”, the term for those children born between a Filipina mother and a Korean father out of marriage.

The sociocultural issue surrounding the Kopino has been the criticism that the Korean fathers have abandoned Kopinos by leaving Philippines and providing no supports.  In this court case, the story was quite typical.  The Korean father met a Philippine woman back in 1997, when he was running a toy manufacturing business in Philippines.  In 1998 and 2000, they had 2 children.  But he couldn’t marry her, because he was already married to another woman in South Korea.  On April 14, 2004, he suddenly left Philippines alone and never contacted his children again.  He had never paid any support for his children.

In December 2012, frustrated by the irresponsibility of the Korean father, the children’s mother in Philippines had moved to bring a legal action in Seoul Family Court against the Korean father to establish the paternity of her children.  After 15-month litigation, the DNA test confirmed the blood ties between Continue reading


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What to Expect When Dismissed by Employer in Korea

It is well known that the Korean labor law provides the employees with generous protections when it comes to the matter of disciplinary measures taken by the employer.  In this article, we explain what protection is given to foreign employees in the area of termination and other disciplinary actions.

Employment Is Not “At-Will” in Korea

Unlike many other foreign legal regimes, Labor Standard Act of Korea (LSA) requires the employer having five or more employees to establish a just cause in order to exercise dismissal and any other disciplinary actions.  In other words, employment is not “at-will” in Korea.  (Note:  There is a legal concept of no-fault dismissal based on the managerial hardship under the LSA, which requires very strict requirements to execute.  This will be the subject of our upcoming article) 

Foreign Employees Can Be Protected By the Korean Labor Law Even If the Labor Contract  Says Korean Labor Doesn’t Apply

This rule of labor laws shall equally apply to the employment contract between Korean employers and Foreign employees in Korea, and vice versa.

More importantly, this is the case even when the employee working in Korea agrees in his employment contract that the Korean labor law does not apply.  That is because the Private International Act of Korea which provides the general principles for the choice of law enables every Korean and foreign employee working in Korea to enjoy the protections under the mandatory rules of the Korean labor law.

Therefore, it is highly advisable that any foreign employee working in Korea and a multinational which has employees in Korea must understand how the Korean labor law regulates the dismissal and under what situation the dismissal becomes a wrongful termination.

What is the Just Cause for Dismissal in Korea?

The LSA does not provide what the just cause exactly means.  It is up to the court’s review and interpretation.  In this regard, it is firmly established in the Supreme Court’s precedent that Continue reading


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I Work for the Korean Branch of U.S. Company. My Employment Contract Provides U.S Law Shall Apply and Severance Pay Is Not Granted. Can I Still Get a Severance Pay Pursuant to Korean Labor Laws?

Question) I am an American citizen working in South Korea.  Originally I was working for a U.S. company incorporated in the state of New York, but 3 years ago I was seconded to the Korean branch of my U.S. company, and have been working for the branch until now.  When I was seconded, my new employment contract provided that the New York state law shall apply to my employment relation in Korea.  Now, my employment contract is expiring and I would like to know whether I am entitled to the severance pay under the Korean labor law.  I know my employment contract and my company’s policy do not provide the right to severance pay.  But, as I have been working in Korea for 3 years, I am wondering if the statutory rights of severance pay under the Korean labor law could be given to me.

Answer) The answer is Yes.  You are entitled to the severance pay under the Korean labor laws.  (check here as to how the severance pay under Korean law is recognized and operates)  This answer could be accepted quite surprising considering the fact that the parties had previously agreed (i) the Korean labor should not apply and (ii) the severance pay should not be awarded.  How come the Korean labor law intervenes in the parties’ employment relation which is seemingly irrelevant to the Korean law implications other than the fact that the workplace of the employee is in Korea?  The answer lies in the provisions of the Private International Act of Korea which provide the general principles for the choice of law in Korea.

When a legal relation has certain foreign elements, the court must decide which jurisdiction’s law shall apply to interpret that legal relation.  In Korea, the Private International Act provides the general rules and principles for the governing laws of the various types of legal relations.  Specifically, the Act provides that if the employer and employee agree to their own choice of law, the employment contract is governed by the law chosen by the parties.  But, this does not mean the parties can freely determine which law and regulations apply to their employment relation.  It is true in Korea that the party autonomy is a general principle of governing laws, but party autonomy is subject to limits imposed by the overriding public policy and mandatory rules.  Accordingly, Continue reading


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Attorney Wonil Chung Successfully Obtained a Supreme Court’s Ruling in a High-Profile Overture Sponsored Links Case Reinforcing Unrestricted Access to Internet Network

그림 2In April 2013, attorney Mr. Wonil Chung successfully obtained a Supreme Court’s ruling which overturned lower court’s decision in connection with the sponsored links, Internet keyword advertising services, operated by Overture Services Inc., a wholly-owned U.S. subsidiary of Yahoo! Inc.  Before this ruling from the Supreme Court of South Korea, there had been an increased controversy over whether Overture system user’s deployment of an automated program to access to the sponsored links could fall into a crime causing a harm to the Internet network system.  In this case, attorney Mr. Chung argued before the Supreme Court of South Korea that it cannot constitute a statutory crime, otherwise the result would be an over-reaching of Korean criminal statute and cause an excessive chilling effect on the free access to the Internet.  Responding to Mr. Chung’s arguments, the Supreme Court of South Korea held that it does not constitute a statutory crime of interference with stable operation of the Internet network.  With its ruling, the Court struck down the prosecutor’s attempt of excessive criminalization and reinforced online service user’s right of free and unrestricted access to the Continue reading


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[Q&A: Family Law] What Legal Rights Do I Have under the De Facto Marriage in Korea? – Introduction to How the Korean Law Treats De Facto Marriage and Its Resolution

Question) I am a US citizen and have been living with my Korean boy friend for about 3 years in South Korea.  We loved each other and agreed to marry, but we were so busy to have the legal process timely done and most importantly we found no need to do that.  We’ve just thought each other as husband and wife and so do our friends and families. While living together, he ran an Internet business and made a quite large profits from there.  I took care of every housework and sometimes I helped his business work, too. But, recently I found he had cheated on me. I was so shocked and got separated from him.  My concern is whether I have any right to the assets accumulated during our cohabitation, like a property division right between divorcing couple.

Answer) Under Korean law, in order to establish the marital relationship, the parties must report their marriage to the government.  Just having a wedding ceremony is not enough.  If the parties live together considering themselves each other’s spouse without reporting the marriage, it is called a de facto marriage.  A de facto marriage is not a legal marriage.  Thus it is not entitled to the same level of legal protection as the legal marriage.  But, when it comes to the resolution of the de facto marriage relationship, the Korean law applies almost identical protection to the parties.

First, the Korean law grants the right of property division to each party of the de facto marriage.  Each party is entitled to the share of the assets acquired during the relationship pursuant to his or her contribution.  Even if the party is solely responsible for the relationship breakdown, the person is still entitled to.  Second, a party can seek a consolation money against the other party, if the other party is solely responsible for the relationship breakdown.  The amount the party can seek is decided by various Continue reading