JIPYONG LLC

[Case No. Supreme Court decision 2016Du56042 dated June 25, 2020]

The Supreme Court rendered a decision holding that whether an act of an employee is deemed grounds for disciplinary action must be determined based on the grounds for disciplinary action under the rules of employment, not the notice to the employee stating the facts of allegation and requiring to report to the HR committee.

An employee in the accounting team (the “Senior Employee”) told another employee in the team (the “Other Employee”) that a third employee who was transferred to the team (the “New Employee”) is “very slow at work” and “doesn’t really know about accounting” in the presence of the other team members. The Senior Employee further told the other team members to not talk to the New Employee while the New Employee is at work and to exclude the New Employee from dinners and drinks. The Other Employee said to the Senior Employee to not instruct the New Employee anymore in the presence of the New Employee. When the New Employee brought the Other Employee the paper he printed out, the Other Employee would rip up the paper in front of the New Employee. The Senior Employee and the Other Employee together said to the other team members to exclude the New Employee and one other employee (the “Associated Employee”) from lunches and dinners. They further spread rumors that the New Employee and the Associated Employee were having an affair.

Eventually the New Employee resigned in March 2013 and wrote on the company intranet blaming the Senior Employee and the Other Employee for slander and stating the rumors were not true. The New Employee also filed a complaint against the Senior Employee and the Other Employee of theft of USB and harassment, including sending anonymous letters using personal information contained in the USB, reprimanding relating to work, bullying, disseminating false information relating to privacy, and encouraging bullying among others.

The company therefore called the Senior Employee and the Other Employee on April 16, 2013 to report to the HR committee on the 19th of the same month and notified them the alleged facts would constitute violation by illegal acquisition, infringement, and disclosure of personal information, bullying, and violation of IT operations regulations. The company held the HR committee meeting on April 23, 2013, and decided to terminate for cause. However, the chairman of the board of directors of the company lowered the disciplinary action to dismissal.

In response to the decision, the Senior Employee and the Other Employee filed a claim to the Seoul District Labor Relations Commission for relief from wrongful dismissal. The Seoul District Labor Relations Commission determined that the case did not constitute bullying or infringement and disclosure of personal information, and accepted the claim. The company appealed, but the National Labor Relations Committee reached the same conclusion as the earlier decision, and rejected the appeal.

The court of first instance also focused on the bullying and infringement and disclosure of personal information which the company cited as the grounds for disciplinary action to the Senior Employee and the Other Employee, and found that the acts of the Senior Employee and the Other Employee did not constitute bullying or infringement and disclosure of personal information on the ground that the Senior Employee was supervisor to the New Employee and engaged in the relevant acts with the Other Employee based on suspicion of the relationship between the New Employee and the Associated Employee and the New Employee did not complain of bullying. The court even stated that the Senior Employee and the Other Employee were offering advice to the employees to be careful of the rumors and that this cannot be conclude as dissemination of private information.

However, the Supreme Court explained that whether improper acts are to be deemed grounds for disciplinary actions must be based on whether they are in violation of the code of conduct of the company rather than whether they are within the scope of the terms in the notice containing the alleged facts. In other words, the Supreme Court stated that the lower court should have considered whether the acts were deemed grounds for disciplinary actions based on the provisions of the code of conduct of the company providing that “The officers and employees shall be respectful to each other, conduct in a proper manner as required for the workplace, and not engage in malicious speech or slander of the other officers or employees.” The Supreme Court then concluded that the acts of the officers and employees were beyond the appropriate scope within the context of the workplace and contrary to the value of mutual respect between the employees.

The Supreme Court therefore overturned the lower court’s decision and remanded to the lower court.