What is the difference between resignation and dismissal?
Once employers and employees sign an employment contract, they establish relationships with hope and anticipation; however, such relationships sometimes end up becoming complicated. Unexpected and unprepared termination of employment relationships might be undesirable for both sides. Resignations and dismissals mean a termination of an employment relationship, but the two cases differ.
Resignations are initiated by the employee or are based on his or her consent, while dismissals are solely the employer’s decision.
There is no legal provision in the Labor Standards Act regarding resignations; however, there are certain requirements for dismissal in terms of reasons, procedure, and format. If the requirements for legitimate dismissals are not fulfilled, the dismissal is deemed illegal, and the dismissed employee is eligible to be reinstated. Why do Korean labor laws protect employees from dismissal?
When it comes to resignation, the employee is willing to accept the consequences; therefore, there is no need to protect the employee. However, unlike resignation, dismissal might lead to unexpected financial difficulties for employees.
The consequences vary depending on whether the employment relationship is terminated by resignation or dismissal. Employee “A” claims to have been dismissed because “A” did not hand in a letter of resignation. In this situation, did the company dismiss “A” or not?
Expressing an intention to resign
Generally, it is common practice for an employee to submit a letter of resignation when he or she they give notice of their intention to leave the company. Therefore, employment rules require the employee to hand in the resignation letter as a formality. However, this letter is not the only legitimate way to express an employee’s intention to resign. There are many other effective ways to inform a company that an employee is leaving.
It is not easy for companies to end employment relationships if an employee merely states his or her intention to resign orally or through the telephone because there is no physical proof of the employee’ notice and the lack of physical proof can lead to the determination that the dismissal was illegal. Therefore, employers are recommended to ensure the employee’s intention to resign and to receive an official letter of resignation.
If receiving an official resignation letter from an employee is impossible, the employer cannot help but terminate the employment relationship after taking into consideration the employee’s circumstances and behavior. For example, it is clear that the employee is really leaving the company if he or she is absent from work, has no objection to the notice of employment termination, and receives his or her severance pay without objection.
Employee “A” claims to have been dismissed by the company because “A” did not submit an official resignation letter; however, it is hard to say that employee “A” has been fired because “A” did not come to the office despite being asked to do so by the manager.
Retracting a notice of resignation
If employee “A” is not dismissed by the company but voluntarily resigns, is it possible for “A” to retract the notice of resignation and return to work?
The expression of an employee’s intention to resign can be interpreted in two different ways: first, it can be accepted as a unilateral notice for terminating the employment relationship and secondly, as a request for terminating the employment relationship. Korean courts distinguish these two cases as having different legal effects.
For the former, the employment relationship is terminated when the company receives the employee’s notice of resignation. Once the company receives this, the employee is not able to withdraw it. However, in the latter case, the employment relationship is to be terminated when the company approves the employee’s request to resign, and therefore he or she is able to retract the request to resign before the company approves it.
Sometimes, it is not easy for the HR manager to ensure whether or not the employee is really leaving the job. Therefore, in order to avoid potential conflict, following the official procedure for terminating the employment relationship after re-confirming the employee’s intention to resign is recommended.
Employee “A” did not come to workplace after sending a text message to his or her boss. The HR team followed the procedure to terminate the employment relationship by approving the request of employee “A” to quit, even though it was not clear whether or not the text message was a notice or a request. Therefore, whether or not his or her expression was a request, employee “A” is no longer able to return.
Procedure for resignation
Employees can express their intention to resign in various ways, and for many reasons, such as a worsened business situation, fear of disciplinary measures, conflict with a boss, or unsatisfactory working conditions.
Korea’s Civil Act stipulates the principle of a declaration of intention which means that declaration of intention shall be valid as the other party is aware, unless the parties agree otherwise. In reality, an employee often expresses his or her intention to resign vaguely and unclearly. A company making a rash judgement regarding the employee’s intention to resign could possibly be cause for claims of unfair dismissal. Therefore, the company should follow the manualized procedure when dealing with an employee’s resignation.
Before ending the employment relationship, it is important to make certain that the employee really intends to resign from work, and require that the employee hand in a resignation letter. By following these procedures, the employee can have a second chance to retract his or her decision to quit or to re-confirm his or her intention to leave the company.
If the employee does not write the letter of resignation and refuses to continue to work despite the company’s request to do so, the company should send an official notice of employment termination by certified mail. By doing so, unnecessary conflicts may be prevented.
In the above-mentioned case, employee “A” clearly expressed his or her intention to resign by sending a text message and refused his or her boss’s order to come to the workplace until the company accepted the resignation. Therefore, resignation of employee “A” is regarded as termination of employment at will; it is not a unilateral decision of the company. In conclusion, employee “A” is not able to return to work unless the company allows it.