Corporate trends / Performance record
‘Absence of Business Necessity (Non-Referral under the Personal Information Protection Act)’ Unfair Dismissal Decision (Unfair Dismissal 567)
- Date2026/07/24 04:06
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[Case Information]
This case is a decision in which the employee prevailed in full on the issue of “absence of business necessity (non-referral under the Personal Information Protection Act).”
Decision Committee: Seoul Regional Labor Relations Commission 2026부해950 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-26 · Case Result: Fully Upheld
Summary of Key Issues:
a. Existence of business necessity: The employer, having received notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a provisional measure. However, once the police decided not to refer the case for prosecution, the necessity for the transfer no longer remained, and no separate business necessity arising from the circumstances of the workplace was identified.
b. Degree of disadvantage in daily life: There was no change in the employee’s salary or place of work, and no change in the employee’s use of annual leave or childcare leave...
1. Legal Implications
Ⅰ. Case Overview
In this case, after receiving notice that a criminal investigation had been initiated against an employee for an alleged violation of the Personal Information Protection Act, the employer implemented a transfer, citing it as a provisional measure. The employee then filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal and unfair personnel action, challenging the legitimacy of the transfer. The Seoul Regional Labor Relations Commission rendered its decision by comprehensively considering the circumstances at the time of the transfer, the subsequent non-referral decision, whether the transfer caused any disadvantage to the employee’s daily life, and whether the employer complied with consultation procedures during the transfer process.
Ⅱ. Summary of Issues
The issue in this case is whether, in a situation where an investigation into an alleged violation of the Personal Information Protection Act was initiated but later terminated with a non-referral decision, a transfer based on that investigation constitutes a legitimate exercise of managerial authority grounded in business necessity, or whether it constitutes an abuse of rights amounting to an unfair transfer and unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The decision panel in this case took into account that the employer, upon receiving notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a temporary and provisional measure. However, once the police decided not to refer the case for prosecution, the original grounds for the provisional measure ceased to exist, and no other objective business necessity was identified. It also considered that, even after the transfer, it was difficult to find clear, substantial disadvantages to the employee’s daily life in terms of salary, place of work, or the use of annual leave and childcare leave, and examined whether the employer had fulfilled consultation procedures with the employee as required under the principle of good faith during the transfer process.
On this basis, the panel found that it was difficult to conclude that the core requirement for a transfer—“business necessity”—continued to be satisfied. It further held that even if the disadvantages to the employee’s daily life resulting from the transfer are not significant, a transfer can still constitute an abuse of managerial authority if there is no objective business necessity. The panel also emphasized that consultation procedures during the transfer process are an important factor in assessing the legitimacy of the employer’s action. Accordingly, it held that the transfer in this case fell outside the scope of a legitimate exercise of managerial authority.
The dismissal in this case was therefore found to be unfair, in light of the fact that the transfer was maintained even after the business necessity for it had disappeared.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, when an employer imposes personnel measures such as transfer or placement on standby on the grounds of a criminal investigation or a complaint, it is important to pay attention to whether such measures are characterized as “provisional,” and whether they continue to be maintained even after the investigation is closed (by non-referral, a finding of no suspicion, etc.). If, after the investigation or suspicion has been resolved, the personnel measure is still maintained without any separate, objective business necessity, the employee should bear in mind that there may be room to challenge it by filing an application with the Labor Relations Commission for a remedy for unfair dismissal or unfair transfer.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s perspective, when it is unavoidable to take provisional measures such as transfer or placement on standby due to notice from investigative authorities, the grounds, duration, and provisional nature of such measures should be clearly documented. If the original grounds later cease to exist due to a non-referral or a finding of no suspicion, the employer should either objectively secure a separate business necessity for maintaining the transfer (such as organizational restructuring or the need for personnel reallocation), or, if no such necessity exists, consider measures such as reinstatement to the original position in order to reduce the risk of allegations of abuse of rights.
In addition, when issuing personnel orders such as transfer or reassignment, employers should comprehensively consider business necessity, the degree of disadvantage to the employee’s daily life, and consultation procedures with the employee, in accordance with the principle of restrictions on dismissal under Article 23 of the Labor Standards Act and the criteria set forth in Supreme Court precedents. Employers are advised to consult in advance with experts such as Labor Law Firm Law&. This basic legal principle applies equally in cases where more substantial workforce adjustments, such as collective redundancies, are required.
2. Matters Decided
a. Case Overview and Procedural History
a. Existence of business necessity: The employer, having received notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a provisional measure. However, once the police decided not to refer the case for prosecution, the necessity for the transfer no longer remained, and no separate business necessity arising from the circumstances of the workplace was identified.
b. Degree of disadvantage in daily life: As there was no change in the employee’s salary or place of work, and no change in the employee’s use of annual leave or childcare leave, the Commission determined that no clear disadvantage in daily life existed.
c. Compliance with consultation procedures required under the principle of good faith: With respect to the transfer, whether the employer complied with the consultation procedures required under the principle of good faith...
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. Existence of business necessity: The employer, having received notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a provisional measure. However, once the police decided not to refer the case for prosecution, the necessity for the transfer no longer remained, and no separate business necessity arising from the circumstances of the workplace was identified.
b. Degree of disadvantage in daily life: As there was no change in the employee’s salary or place of work, and no change in the employee’s use of annual leave or childcare leave, the Commission determined that no clear disadvantage in daily life existed.
c. Compliance with consultation procedures required under the principle of good faith: With respect to the transfer, whether the employer complied with the consultation procedures required under the principle of good faith... /
[See More Related Decisions]
- ‘Unfair Dismissal Decision Relating to “Non-Formation of Hiring Commitment (Absence of Offer Letter)”’ – Date of Decision: – Case Result: Initial Decision Upheld
- ‘Unfair Dismissal Decision Relating to “Non-Fulfillment of Requirements for Collective Redundancy (Workout Company)”’
- ‘Unfair Dismissal Decision Relating to “Expression of Intent to Resign (Resignation Remark in Telephone Call)”’
[Tags]
Unfair dismissal, Absence of business necessity (non-referral under the Personal Information Protection Act), personnel order·transfer, others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is one of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, ‘Unfair Dismissal Decision Relating to “Workplace Size (Separate Corporation)”’, in a new window.
※ The list of decisions relating to Absence of Business Necessity (Non-Referral under the Personal Information Protection Act) can be viewed together in the “List of Decisions Relating to Absence of Business Necessity (Non-Referral under the Personal Information Protection Act).”
※ Korean version of this case: Korean article
This case is a decision in which the employee prevailed in full on the issue of “absence of business necessity (non-referral under the Personal Information Protection Act).”
Decision Committee: Seoul Regional Labor Relations Commission 2026부해950 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-26 · Case Result: Fully Upheld
Summary of Key Issues:
a. Existence of business necessity: The employer, having received notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a provisional measure. However, once the police decided not to refer the case for prosecution, the necessity for the transfer no longer remained, and no separate business necessity arising from the circumstances of the workplace was identified.
b. Degree of disadvantage in daily life: There was no change in the employee’s salary or place of work, and no change in the employee’s use of annual leave or childcare leave...
1. Legal Implications
Ⅰ. Case Overview
In this case, after receiving notice that a criminal investigation had been initiated against an employee for an alleged violation of the Personal Information Protection Act, the employer implemented a transfer, citing it as a provisional measure. The employee then filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal and unfair personnel action, challenging the legitimacy of the transfer. The Seoul Regional Labor Relations Commission rendered its decision by comprehensively considering the circumstances at the time of the transfer, the subsequent non-referral decision, whether the transfer caused any disadvantage to the employee’s daily life, and whether the employer complied with consultation procedures during the transfer process.
Ⅱ. Summary of Issues
The issue in this case is whether, in a situation where an investigation into an alleged violation of the Personal Information Protection Act was initiated but later terminated with a non-referral decision, a transfer based on that investigation constitutes a legitimate exercise of managerial authority grounded in business necessity, or whether it constitutes an abuse of rights amounting to an unfair transfer and unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The decision panel in this case took into account that the employer, upon receiving notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a temporary and provisional measure. However, once the police decided not to refer the case for prosecution, the original grounds for the provisional measure ceased to exist, and no other objective business necessity was identified. It also considered that, even after the transfer, it was difficult to find clear, substantial disadvantages to the employee’s daily life in terms of salary, place of work, or the use of annual leave and childcare leave, and examined whether the employer had fulfilled consultation procedures with the employee as required under the principle of good faith during the transfer process.
On this basis, the panel found that it was difficult to conclude that the core requirement for a transfer—“business necessity”—continued to be satisfied. It further held that even if the disadvantages to the employee’s daily life resulting from the transfer are not significant, a transfer can still constitute an abuse of managerial authority if there is no objective business necessity. The panel also emphasized that consultation procedures during the transfer process are an important factor in assessing the legitimacy of the employer’s action. Accordingly, it held that the transfer in this case fell outside the scope of a legitimate exercise of managerial authority.
The dismissal in this case was therefore found to be unfair, in light of the fact that the transfer was maintained even after the business necessity for it had disappeared.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, when an employer imposes personnel measures such as transfer or placement on standby on the grounds of a criminal investigation or a complaint, it is important to pay attention to whether such measures are characterized as “provisional,” and whether they continue to be maintained even after the investigation is closed (by non-referral, a finding of no suspicion, etc.). If, after the investigation or suspicion has been resolved, the personnel measure is still maintained without any separate, objective business necessity, the employee should bear in mind that there may be room to challenge it by filing an application with the Labor Relations Commission for a remedy for unfair dismissal or unfair transfer.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s perspective, when it is unavoidable to take provisional measures such as transfer or placement on standby due to notice from investigative authorities, the grounds, duration, and provisional nature of such measures should be clearly documented. If the original grounds later cease to exist due to a non-referral or a finding of no suspicion, the employer should either objectively secure a separate business necessity for maintaining the transfer (such as organizational restructuring or the need for personnel reallocation), or, if no such necessity exists, consider measures such as reinstatement to the original position in order to reduce the risk of allegations of abuse of rights.
In addition, when issuing personnel orders such as transfer or reassignment, employers should comprehensively consider business necessity, the degree of disadvantage to the employee’s daily life, and consultation procedures with the employee, in accordance with the principle of restrictions on dismissal under Article 23 of the Labor Standards Act and the criteria set forth in Supreme Court precedents. Employers are advised to consult in advance with experts such as Labor Law Firm Law&. This basic legal principle applies equally in cases where more substantial workforce adjustments, such as collective redundancies, are required.
2. Matters Decided
a. Case Overview and Procedural History
a. Existence of business necessity: The employer, having received notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a provisional measure. However, once the police decided not to refer the case for prosecution, the necessity for the transfer no longer remained, and no separate business necessity arising from the circumstances of the workplace was identified.
b. Degree of disadvantage in daily life: As there was no change in the employee’s salary or place of work, and no change in the employee’s use of annual leave or childcare leave, the Commission determined that no clear disadvantage in daily life existed.
c. Compliance with consultation procedures required under the principle of good faith: With respect to the transfer, whether the employer complied with the consultation procedures required under the principle of good faith...
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. Existence of business necessity: The employer, having received notice from the police that an investigation had been initiated against the employee on suspicion of violating the Personal Information Protection Act, implemented a transfer as a provisional measure. However, once the police decided not to refer the case for prosecution, the necessity for the transfer no longer remained, and no separate business necessity arising from the circumstances of the workplace was identified.
b. Degree of disadvantage in daily life: As there was no change in the employee’s salary or place of work, and no change in the employee’s use of annual leave or childcare leave, the Commission determined that no clear disadvantage in daily life existed.
c. Compliance with consultation procedures required under the principle of good faith: With respect to the transfer, whether the employer complied with the consultation procedures required under the principle of good faith... /
[See More Related Decisions]
- ‘Unfair Dismissal Decision Relating to “Non-Formation of Hiring Commitment (Absence of Offer Letter)”’ – Date of Decision: – Case Result: Initial Decision Upheld
- ‘Unfair Dismissal Decision Relating to “Non-Fulfillment of Requirements for Collective Redundancy (Workout Company)”’
- ‘Unfair Dismissal Decision Relating to “Expression of Intent to Resign (Resignation Remark in Telephone Call)”’
[Tags]
Unfair dismissal, Absence of business necessity (non-referral under the Personal Information Protection Act), personnel order·transfer, others, Labor Law Firm Law&, large labor law firm, Samseong-dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is one of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, ‘Unfair Dismissal Decision Relating to “Workplace Size (Separate Corporation)”’, in a new window.
※ The list of decisions relating to Absence of Business Necessity (Non-Referral under the Personal Information Protection Act) can be viewed together in the “List of Decisions Relating to Absence of Business Necessity (Non-Referral under the Personal Information Protection Act).”
※ Korean version of this case: Korean article
