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Subject   April 4th week - Case Study: Non-payment of Severance Pay to a Foreign Lawyer
Case Study: Non-payment of Severance Pay to a Foreign Lawyer
Bongsoo Jung, Korean labor attorney at KangNam Labor Law Firm

I. Summary

A foreign lawyer joined a law firm on March 17, 2013 and worked for two consecutive years and eleven months until February 11, 2016. After resigning from the law firm, he requested for payment of severance pay, but his request was rejected by the law firm on grounds that he had been treated as a partner lawyer of the law firm. The foreign lawyer, through the help of a labor attorney, filed his appeal to the Labor Office, and eventually successfully received the Severance Pay.
I would like to examine the arguments of the foreign lawyer and the law firm regarding the unpaid severance pay case involving the foreign lawyer's resignation, and then explain the criteria for resolving this case based on relevant law and precedent.

II. From the perspective of the foreign lawyer

As the foreign lawyer was legally employed under the Labor Laws, and had been receiving fixed monthly salary from the law firm, and had also been regularly attending its weekly meeting in addition to reporting to and receiving instructions from the law firm’s representative lawyer in the carrying out of his duties and responsibilities, in accordance with Korean Labor Law, the foreign lawyer should be paid a Severance Allowance as with any Korean employee.

III. From the perspective of the law firm

The foreign lawyer did not satisfy the definition under the Labor Standards Act of an employee as he was a director of the law firm, and he therefore should not be entitled to a Severance Pay as prescribed under the Labor Standard Act. Based on the facts presented below, it was evident that as the foreign lawyer was a director, he was drawing a salary and holding a position much higher than other of his peer lawyers in the same law firm.
A. He had a secretary directly hired by himself.
B. He was provided with a corporate card for use at his absolute discretion, and was additionally provided with a designated parking area.
C. His salary was much higher than that of his other peer lawyers including that of the representative lawyer.
D. His annual leave was also scheduled at his absolute discretion, without the need to seek prior approval from anyone in the law firm.
E. He also enjoyed absolute liberty in the starting and ending time of work, in working hours and work venue.
F. Above all, the applicant has not, in the conduct of his duties and responsibilities, received instructions in a defined or subordinating manner from any of the law firm’s lawyers, including that of the representative lawyer

IV. Related Act and Judicial Ruling

1. Related Act: The Lawyers Act
Article 4 (Qualification as lawyer) Any person who falls under the following shall be eligible to become a lawyer.
①        Any person who passes the Bar Examination and completes the required courses at the Judicial Research and Training Institute; and
②        A person who has the qualification for a judge or public prosecutor.

 A foreign lawyer can only be employed and not be a partner of a law firm. A foreign lawyer is not allowed to establish his own business in Korea to provide legal service. Hence, from a legal perspective, the employment of a foreign lawyer should only be for the purpose of providing consultancy on foreign laws applicable to foreign countries.

2. Judicial Ruling: A lawyer who belongs to the law firm maintains the employee status. (Seoul Regional Court ruling on Nov 11, 2005, 2005 Kahop 33355)
According to the Lawyers Act, on registration of professional qualification and business establishment, every lawyer, including even legally affiliated lawyers, can individually conduct legal service as an independent and professional attorney at law
However, a law firm shall be established by membership lawyers, and its membership lawyers may operate its decision making process exclusively. Individual lawyers of a law firm can perform his/her law practices only under name of the law firm, and the substantial contents of his/her law practices shall be determined by the membership lawyers. Further more, the conduct of its business process also shall be under the direction and supervision of the law firm. In consideration of aforementioned facts, a lawyer belonging to the law firm shall therefore be regarded as the employee who offers work under subordinate relations to the law firm for the purpose of earning wages.

File   2024.4.27 외국인 변호사의 퇴직금 미지급 사건 English.pdf
File   Manual on Irregular Employment and Employee Status.jpg

166 (1/9)
No Subject
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161 May 2nd week - Dismissal of an Expatriate due to Disputes with a Korean Branch Manager
160 May 1st week - Korean Labor Case Study: Disciplinary Dismissal Due to Violating Company Policy Prohibiting Dual Employment
April 4th week - Case Study: Non-payment of Severance Pay to a Foreign Lawyer
158 April 3rd week - Korean labor law: Review of Dismissal of a Full-time Union Officer
157 April 2nd week - Labor Issue related to Branch Manager’s Severance Pay (Less Paid; Not including Incentive in Average Wage)
156 April 1st week - Disciplinary Process: Justification for the dismissal by an order from the head office of a multinational company  
155 March 5th week - Korean labor law: Guidelines for calculating working hours  
154 March 4th week - Korean Immigration: Professional Foreign Personnel Employment (E-7 Visa)  
153 March 3rd week - The Limitations of Labor Law Protection for Foreign Native-English Instructors  
152 March 2nd week - Korean labor law: Foreign Companies with Fewer than 5 Employees at their Korean Branch Offices: Application of Korean Labor Law & Related Cases  
151 March 1st week - Case Study: Dismissal of a Korean Branch Manager (Recommended Resignation)  
150 February 4th week - Korean labor law: Employment Relations by VISA Type  
149 February 2nd week - Foreign Workers & the Social Insurances  
148 February 2nd week - Korean labor law: Granting Annual Leave  
147 February 1st week - Explanation for Terms of Korean Labor Law  

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