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Subject   December 2018 - Relationship between the Civil Law and the Labor Standards Act regarding Termination of Employment
Relationship between the Civil Law and the Labor Standards Act regarding Termination of Employment

I. Introduction
The Civil Law and the Labor Standards Act are often regarded as equivalent to each other when it comes to employment. However, strictly speaking, there are many areas where the Labor Standards Act does not apply and/or has limited application. The Labor Standards Act applies to a limited number of legal provisions for a workplace with less than five persons, but does not apply to workplaces with only relatives and housekeepers living together. Issues that are not stipulated in the Labor Standards Act are subject to the principle of good faith and prohibition of abuse of rights in Article 2 of the Civil Law, as well as some other provisions of the Civil Law. The employment section of the Civil Law has only 9 provisions in total, but is considered the general law in labor law. As there are some differences in the details and application when it comes to termination of employment, it is necessary to distinguish between the Civil Law and the Labor Standards Act. Five of the nine provisions of the Civil Law on employment are related to the termination of employment contracts.
In our capitalist economic system, as the Civil Law is based on the principle of freedom of contract, one party of the contract can freely terminate the contract on the premise of certain requirements or damages. However, if employment contracts allow employers, who are in a socially and economically superior position to employees in the labor contract relationship, to unilaterally dismiss employees, those employees whose ability to maintain their livelihoods is based upon earnings from employment are threatened with unemployment at any time, which places them in an unequal and oppressive relationship For this reason, the Labor Standards Act was enacted under the Constitution in order to improve such unequal relationships and to guarantee human dignity and the right to pursue happiness as a basic right of workers.

II. The need to distinguish the different types of termination of employment
1. Divisions in the Laws
There are three types of termination of employment under the Civil Law. First, if employment is terminated when the contract period expires, it is recognized that renewal of the contract is granted under certain circumstances (Article 662 of the Civil Law). Second, if the contract term is for more than three years or there has been no contract for a period of time, the right of notice of termination shall be granted to each party, and at this time, termination will take effect after a specific period of time (Civil Law Articles 659 and 660). Third, there is recognition of the right of termination under certain circumstances (Articles 657, 658, 661, and 663). A contract under the Civil Law is a contract between the parties, so it is presumed that it can be cancelled if necessary.
However, in the Labor Standards Act, unilateral termination of a labor contract by an employer becomes an unfair dismissal and becomes subject to remedy application for unfair dismissal. Provided, however, that this shall not be the case if the contract period is fixed, the period required for the completion of the work is specified and attained, or if the employee reaches retirement age. In the case of an employment contract with a definite period of time, if the contract is longer than two years, the contract type is changed to a non-fixed contract (Article 4 of the Fixed-term Employment Act).

2. Just cause for termination
The Civil Law allows either party to freely and unilaterally terminate the employment contract as the contract is freely concluded between the parties in accordance with the principle of freedom of contract.
However, the Labor Standards Act stipulates that employers cannot dismiss, suspend, or discipline a worker without justifiable reason (Article 23 of the LSA). According to the Labor Standards Act regarding employment contracts, it is impossible to notify termination of an employment contract unilaterally in a manner that would be acceptable under the Civil Law. This is because The LSA’s aim is to protect employees. However, it is possible to terminate an employment contract for justifiable reason. Justifiable grounds are situations where an employee is liable to such an extent that the employment relationship cannot be continued under social norms, or there is inevitable management necessity. Whether or not the employment relationship can in fact not be continued depends on various factors such as the purpose and nature of the business, the conditions of the workplace, the status of the worker, the motivation behind the employee’s violations and/or actions affecting the company, and previous behavior. The situation must be reviewed and judged comprehensively based upon the above.

III. Termination of an employment contract in the Civil Law
1. Expiration and exception of employment terms
If the parties set a term of employment, the employment shall terminate at the expiration of that period. However, it may be renewed by agreement of the parties before or after the expiration of the term of employment. If, however, after the expiration of the employment period, the employee continues to provide labor without an agreement of renewal and the employer does not take action within a reasonable period of time, the Civil Law interprets that the employee has been rehired under the same conditions (Article 662 of the Civil Law). However, termination of the contract may then be given at any time by the parties, and termination shall take effect one month from receipt of the notice (Articles 662 and 660 of the Civil Law). It is considered by the Civil Law that the shorter-term contract is a more favorable contract between the two parties in terms of the principle of freedom of contract.

2. Notice of dismissal
(1) In cases of long-term employment
The period of employment can be determined by agreement between the parties, but when employment has continued for a very long period of time, there is a problem of restricting the freedom of the parties on the nature of the employment relationship. Therefore, the Civil Law stipulates that when a contract term of employment exceeds 3 years or until the end-of-life of one party or a third party of the parties, each party may give notice of termination at any time after three years (Article 659 of the Civil Law). In that case, termination will take effect three months from the date on which the other party receives notice of termination (Article 659 of the Civil Law). In the case of employment contracts, the maximum term of employment contracts with fixed term is limited to three years. This is to avoid disadvantage to the employee by lengthening the period of employment. In other words, it is a characteristic of the employment contract made between comparably equal parties in the Civil Law that the employment period must be short enough to protect employees.

(2) In cases where there is no agreement on the contract period
In the absence of an agreement on terms of employment, each party may at any time notify termination of the contract (Article 660 of the Civil Law). In this case, termination shall take effect one month from the date on which the other party receives notice of termination (Article 60 of the Civil Law). However, when remuneration is determined by a period of time, the termination will become effective upon the passing of the first period after the notice was received (Article 660 of the Civil Law).

3. Termination of employment
Notice of termination of an employment contract can be made at any time in the following instances. From the time the notification reaches the other party, the termination becomes effective with no notice period: 1) When an employer assigns the employer’s right to a third

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