Basis for the right of employers to unilaterally terminate labor contracts under Labor Code 2012

1. Legal basis

Article 33, 38, 44, 45, 126 of Labor Code  2012

2. Content

Unilateral termination of the labor contract is the right of both employees and employers with the aim of protecting the rights and interests of the parties in labor relations. Therefore, there are regulations on cases in which employers are allowed to unilaterally terminate labor contracts with employees in order to protect the legitimate rights and interests of employers. The bases for the rights of employees to unilaterally terminate labor contracts are divided into the following groups:

Group based on the capacity of employees:

First, the employee often fails to perform his/her job stated in the labor contract. The employer has specific provisions in the regulations on the level of work completion to serve as a basis for evaluating employees. When an employee fails to complete the work according to the criteria set by the employer, the employer may unilaterally terminate the labor contract to protect his rights.

Second, labor contract is terminated for employees' health problem. The employee is sick or has an accident and remains unable to work after having received treatment for 12 consecutive months, in case he/she works under an indefinite-term labor contract, or for 6 consecutive months, in case he/she works under a definite-term labor contract, or more than half the term of the labor contract, in case he/she works under a labor contract for a seasonal job or a specific job of under 12 months but their working capacity has not recovered.

The group based on employees' sense of discipline and morality:

Firstly, employees are disciplined for dismissal. Dismissal is the most severe form of discipline applied by an employer to employees based on the nature and extent of violations of labor discipline and consequences caused by such acts. However, employers can only dismiss employees in the cases regulated in Article 126 of the 2012 Labor Code.

Secondly, at the end of the postponement period of labor contract implementation, the employee is absent from the workplace. Upon expiry of the period of suspension of labor contracts in specified Article 33 of the 2012 Labor Code, if the employee does not return to work, the employer may unilaterally terminate the Labor Contract to protect his rights.

Labor contract is terminated due to changes in structure, technology, economic reasons or organization and management of enterprises:

First, in case there is a change in the structure or technology that affects the employment of many employees, the employer shall elaborate and implement a labor utilization plan in accordance with Article 46 of this Code. In case new jobs are created, priority must be given to re-training these employees for continued employment. In case the employer cannot create new jobs and have to dismiss employees, the employer shall pay job-loss allowances to the employees in accordance with Article 49 of this Code.

In case more than one employee face the risk of unemployment for economic reasons, the employer shall elaborate and implement a labor utilization plan in accordance with Article 46 of this Code. In case the employer cannot employ and have to dismiss employees, the employer shall pay job-loss allowances to the employees in accordance with Article 49 of this Code.

Second, in case of merging, consolidating, splitting or separating an enterprise or a cooperative, the succeeding employer shall continue employing the existing workforce and modify and supplement the labor contracts. In case the existing workforce cannot be fully employed, the succeeding employer shall elaborate and implement a labor utilization plan in accordance with Article 46 of this Code.

Group based on force majeure events: Due to natural disaster, fire or another force majeure event as prescribed by law, the employer, though having applied every remedial measure, has to scale down production and cut jobs, the employer is entitled to unilaterally terminate the labor contract with some excess labor.

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