Many employers in Korea, often due to ill-advised counsel, mistakenly believe that Korean probationary employment periods permit them to terminate workers without justification or even written notification. A recent ruling by the Seoul Administrative Court clarifies that probationary periods are not merely “evaluation periods,” and dismissing Korean employees during or immediately after probation requires specific, iterated grounds and compliance with Korean labor law formalities.

For additional blog posts on Korean Labor & Employment Law, see: IPG Legal’s Labor & Employment Law Archive.

Korean Probationary Periods Korea Labor Law

Probationary Periods in Korean Employment Agreements

Korean Probationary Employment Case Overview

  1. On September 5, 2025, the Seoul Administrative Court, Administrative Division 1 (Presiding Judge Yang Sang-yoon) dismissed a lawsuit filed by a company seeking to overturn a retrial decision by the Central Labor Relations Commission regarding unfair dismissal of a probationary employee (2024guhap82817).
  2. The Employee worked and received training at the Company’s branch in Ulsan University Hospital from October 23 to October 30, 2023. Despite receiving training and performing work for four days, the Company verbally via phone refused to sign an employment contract with the Employee.
  3. The Employee filed for relief from the alleged unfair dismissal with the Ulsan Regional Labor Relations Commission. The Commission ruled in the Employee’s favor, stating that the Company failed to provide a justifiable reason for dismissal and did not follow proper termination procedures, including giving a written notification.
  4. The Company appealed to the Central Labor Relations Commission of Korea, which upheld the ruling. The Company appealed to the Seoul Administrative Court, arguing, in part, that:
    • The branch had fewer than five regular employees, so the Korean Labor Standards Act did not apply.
    • The Employee was not a contract employee under an employment relationship with the Company.
    • There was no justifiable reason to refuse full-time regular or term employment.

Seoul Administrative Court Holding

The Seoul Administrative Court ruled in favor of the Employee, noting, in part, that the workplace has five or more workers, a probationary period is the commencement of the employment relationship, and justifiable grounds were not provided in the decision not to continue the probationary period.

1. Integrated/De Facto 5+-Person Workplace and Applicability of Korean Labor Law

The Company argued that the branch was too small for labor protections to apply (fewer than five workers). The Court rejected this argument, noting that the head office and branch were operated as a de facto single corporate entity since:

  • Both entities shared the same CEO and corporate governance.
  • Decisions affecting the branch were made at the HQ.
  • The Employee was personally interviewed by a corporate representative from the HQ.

The Court concluded that the branch and the HQ functioned as one workplace, making labor protections applicable. For an article on this issue, see: Defacto Single Workplaces for Korean LSA Determinations

2. Probationary Period Equals Employment

The Company claimed the Employee was merely a “trial worker.” The Court found that an implicit employment contract existed and thus the Korean employee was not a mere trial worker since:

  • The Employee underwent four hours of training each day for four days, covering the tasks listed in the job posting.
  • The Employee was paid for his labor for the four days.
  • Training was not simply evaluative, but part of a paid employment period intended to teach him to perform the job.

The Court emphasized that probationary periods are periods of employment, not arbitrary evaluation periods.

3. Lack of Justifiable Reasons for Dismissal

The Company argued that the Employee lacked job competency. The Court found this unpersuasive:

  • The total work period was only 16 hours over four days, which the Court notes was insufficient to fully evaluate skills.
  • The dismissal violated “trust” and could not be reasonably assessed based on the worker’s qualifications.

Key Takeaways for Employers in Korea

  1. Probationary periods are not “free trials.” Employees on probation are protected under the Korean labor laws. Care and nuance are necessary to terminate within or after termination of the probationary period.
  2. Termination during or after probation requires clear justification. Arbitrary dismissal in Korea, without proper documentation or evidence of performance evaluations, is likely to be deemed unfair by Korean courts. Documentation is essential.
  3. Training and initial work constitute employment. Paid training is considered labor under the Korean LSA, and employees immediately gain legal protections.
  4. Document evaluations carefully. Employers should provide written performance feedback and follow best practices if considering dismissal. Documentation, nuance, and understanding of Korean Termination Formalities are essential.

This ruling underscores the importance of understanding Korean labor law for all employers operating in Korea. Probationary periods in Korea are legally recognized as employment periods, and dismissals must be justified based on objective evidence and proper procedures. Employers who fail to comply risk unfair dismissal claims, back pay compensation, reinstatement, monetary fines, MOEL audits, and reputational damage.

by Sean Hayes

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only a few non-Korean lawyers as a Top Attorney by AsiaLaw. Sean is regularly quoted by leading international media outlets, including The Wall Street Journal, The New York Times, France 24, and Bloomberg.

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