Seven Dismissed Workers of Korea Optical High Tech Have Appealed to the Supreme Court
Seven
Dismissed Workers of Korea Optical High Tech Have Appealed to the Supreme Court:
Korea Optical High Tech is a Korean subsidiary of Japan’s
Nitto Denko and manufactures LCD films at its plant in Korea. Following a major
fire in October 2022, the company decided to close the plant. It offered
voluntary retirement to approximately 210 employees. However, 17 employees
ultimately refused to accept the voluntary retirement package, and the company
notified them of their dismissal.
Another Korean affiliate with the same Japanese parent
company as Korea Optical High Tech operates a plant in Pyeongtaek, and the
production volume previously handled by Korea Optical High Tech was transferred
to the Pyeongtaek plant. Although the two companies are Korean subsidiaries of
the same Japanese parent company and manufacture and supply similar products,
they have been operated as separate and independent legal entities.
The key issue in this case is whether the two companies in
Korea should, in substance, be regarded as a single business. If the two
companies are considered one business, the company would, in principle, be
required to satisfy the statutory requirements and procedures for dismissal for
managerial reasons when closing one of the plants and dismissing its employees.
On the other hand, even though the two companies share the same parent company,
they may be regarded as separate legal entities and separate businesses if they
have been operated independently without personnel exchanges or substantial
integration of their management.
The 17 dismissed employees therefore filed applications for
remedy from unfair dismissal. However, the company’s position was upheld by the
Gyeongbuk Regional Labor Relations Commission, the National Labor Relations
Commission, the Administrative Court, and the appellate court. These bodies and
courts concluded that, although the two Korean companies share the same
Japanese parent company, they are separate and independent legal entities.
Accordingly, the closure of Korea Optical High Tech’s plant was regarded as the
termination of an independent business itself. The dismissals resulting from
the impossibility of continuing the business were therefore considered to have
justifiable grounds under Article 23 of the Korean Labor Standards Act.
The Supreme Court must now make a final determination as to
whether the businesses of the two Korean affiliates should, in substance, be
regarded as a single business, or whether they should be treated as separate
and independent businesses, as the lower courts have held.
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