Corporate trends / Performance record
Unfair Dismissal Precedent Concerning “Removal from Position (Dismissal of Branch Manager)” (Unfair Dismissal 578)
- Date2026/07/27 04:15
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[Case Information]
This case is a precedent in which the employee prevailed in full in a dispute over “removal from position (dismissal of branch manager).”
Adjudicating Body: Jeonnam Regional Labor Relations Commission 2026BuHae139 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-22 · Outcome: Employee’s claim fully upheld
Summary of Key Issue: It is reasonable to view the employee’s position as branch manager not as a mere honorary or gratuitous title, but as forming part of the essential content of the employment contract or a significant working condition. Regardless of the existence of formal rules, the company in this case was found to have, in practice, a rank and position structure, as evidenced by the approval line that showed the stages of approval by the person with approval authority and the chain of command and supervision in the course of business operations. The employer’s Exhibit No. 13 (2025 …)
1. Legal Implications
Ⅰ. Case Overview
In this case, an employee who had been working as a “branch manager” was removed from that position and reassigned to a team member level on the grounds of his performance evaluation results. The employee claimed that this constituted an unfair dismissal and applied to the Labor Relations Commission for relief.
The Jeonnam Regional Labor Relations Commission examined the legal nature of the branch manager position and the legitimacy of the personnel measure by comprehensively reviewing the performance evaluation notice, the actual chain of command and supervision, the approval line, and other relevant circumstances.
Ⅱ. Summary of Issues
The issue in this case is whether the measure of removing the employee from the branch manager position and changing his position to team member on the ground that his performance evaluation score fell short constitutes a mere personnel transfer, or whether it amounts to an unfair dismissal (or a disadvantageous measure equivalent to dismissal) that infringes the essential content of the employment contract.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The adjudicating panel held that the employee’s branch manager position was not a mere honorary or gratuitous title, but formed part of the essential content of the employment contract or a significant working condition linked to wages, authority, and responsibilities.
It found that an actual approval line existed in the course of business operations, showing the stages of approval by the person with approval authority and the chain of command and supervision; that, irrespective of the existence of formal rules, a de facto rank and position structure had been formed within the company; and that the employer’s “2025 Performance Evaluation Notice” was nothing more than a temporary notice for the implementation of an evaluation, making it difficult to recognize “dismissal from the branch manager position or conversion to team member upon scoring below 70 points” as a valid standard for changing working conditions or for dismissal.
In light of these factors, the Commission determined that this dismissal measure constituted a deprivation of position and a substantial disadvantageous change in working conditions under the pretext of performance evaluation results, and thus amounted to an unfair dismissal that exceeded the bounds of legitimate exercise of managerial prerogative in personnel matters.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, it is necessary first to determine whether a “position” or “rank” is merely a title, or whether it actually constitutes an essential working condition that affects approval authority, managerial authority, wage level, and calculation of performance-based pay.
If positions such as branch manager, store manager, or team leader are substantively linked to authority, responsibility, and the remuneration system, unilateral removal from such positions or conversion to team member status may be contested as an unfair dismissal or a disadvantageous personnel measure equivalent to dismissal.
Furthermore, where you have suffered a significant disadvantage on the basis of performance evaluation results, you should carefully check whether the evaluation criteria were clearly notified in advance, whether the standards for disadvantageous measures based on evaluation results were lawfully established in the rules of employment or personnel regulations, and whether fairness and consistency were maintained in actual operation.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the company’s perspective, where key positions such as branch manager are in place, the rank and position structure and the corresponding working conditions—such as authority, wages, performance-based pay, and benefits—should be clearly documented, and the requirements and procedures for removal from position or demotion should be established in the rules of employment and personnel regulations.
You should bear in mind that it is difficult to justify serious disadvantageous measures such as “removal from position or demotion upon failing to meet a certain score” solely on the basis of a simple performance evaluation notice.
In addition, just as with redundancy dismissals, personnel measures such as deprivation of position or de facto demotion, which are close to a downgrade in status, may infringe the essential content of the employment contract. Accordingly, to have such measures recognized as legitimate by the Labor Relations Commission, it is important to ensure, in a comprehensive manner, business necessity, the degree of disadvantage to the employee, the rationality and fairness of the selection of affected employees, and procedural fairness (such as prior explanation and an opportunity to be heard).
To prevent this type of unfair dismissal dispute, it is advisable, from the stage of designing the performance evaluation system, to obtain advice from a specialized labor law firm such as Labor Law Firm Law&, and to align the evaluation criteria and the corresponding personnel measures with applicable legal principles. As can be seen from Labor Relations Commission precedents, whether an adjustment of position or rank is a mere personnel order or in substance a dismissal is the core issue. Therefore, it is important to minimize the possibility of disputes through clear rules and consistent operation in advance.
2. Matters Adjudicated
a. Case Overview and Procedural History
It is reasonable to view the employee’s branch manager position not as a mere gratuitous title, but as forming part of the essential content of the employment contract or a significant working condition. Regardless of the existence of formal rules, the company in this case appears to have, in practice, a rank and position structure, as evidenced by the existence of an approval line that shows the stages of approval by the person with approval authority and the chain of command and supervision in the course of business operations. The employer’s Exhibit No. 13 (2025 Performance Evaluation Notice) is nothing more than a temporary notice for the implementation of an evaluation, and “removal from the branch manager position (or change of position to team member) upon a final evaluation score below 70 points …”
3. Summary of Decision
a. Summary of the Labor Relations Commission’s Reasoning
It is reasonable to view the employee’s branch manager position not as a mere gratuitous title, but as forming part of the essential content of the employment contract or a significant working condition. Regardless of the existence of formal rules, the company in this case appears to have, in practice, a rank and position structure, as evidenced by the existence of an approval line that shows the stages of approval by the person with approval authority and the chain of command and supervision in the course of business operations. The employer’s Exhibit No. 13 (2025 Performance Evaluation Notice) is nothing more than a temporary notice for the implementation of an evaluation, and “removal from the branch manager position (or change of position to team member) upon a final evaluation score below 70 points …” /
[See More Related Precedents]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Precedent” – Date of Decision: – Case No.: Initial Decision Maintained
- “‘Non-Existence of Expectation of Renewal (Expiration of Fixed-Term Employment Contract)’ Unfair Dismissal Precedent”
- “‘Expression of Intent to Resign (Resignation Remark Made by Telephone)’ Unfair Dismissal Precedent”
[Tags]
Unfair dismissal, removal from position (dismissal of branch manager), performance evaluation · poor performance, 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 part of Labor Law Firm Law&’s “Unfair Dismissal Precedents” series.
※ You can view the previous article, “‘Calculation of the Number of Regular Employees (Construction Company with Fewer Than 5 Employees)’ Unfair Dismissal Precedent,” in a new window.
※ The list of precedents related to removal from position (dismissal of branch manager) can be found under “List of Precedents Related to Removal from Position (Dismissal of Branch Manager).”
※ Korean version of this case: Korean article
This case is a precedent in which the employee prevailed in full in a dispute over “removal from position (dismissal of branch manager).”
Adjudicating Body: Jeonnam Regional Labor Relations Commission 2026BuHae139 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-22 · Outcome: Employee’s claim fully upheld
Summary of Key Issue: It is reasonable to view the employee’s position as branch manager not as a mere honorary or gratuitous title, but as forming part of the essential content of the employment contract or a significant working condition. Regardless of the existence of formal rules, the company in this case was found to have, in practice, a rank and position structure, as evidenced by the approval line that showed the stages of approval by the person with approval authority and the chain of command and supervision in the course of business operations. The employer’s Exhibit No. 13 (2025 …)
1. Legal Implications
Ⅰ. Case Overview
In this case, an employee who had been working as a “branch manager” was removed from that position and reassigned to a team member level on the grounds of his performance evaluation results. The employee claimed that this constituted an unfair dismissal and applied to the Labor Relations Commission for relief.
The Jeonnam Regional Labor Relations Commission examined the legal nature of the branch manager position and the legitimacy of the personnel measure by comprehensively reviewing the performance evaluation notice, the actual chain of command and supervision, the approval line, and other relevant circumstances.
Ⅱ. Summary of Issues
The issue in this case is whether the measure of removing the employee from the branch manager position and changing his position to team member on the ground that his performance evaluation score fell short constitutes a mere personnel transfer, or whether it amounts to an unfair dismissal (or a disadvantageous measure equivalent to dismissal) that infringes the essential content of the employment contract.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The adjudicating panel held that the employee’s branch manager position was not a mere honorary or gratuitous title, but formed part of the essential content of the employment contract or a significant working condition linked to wages, authority, and responsibilities.
It found that an actual approval line existed in the course of business operations, showing the stages of approval by the person with approval authority and the chain of command and supervision; that, irrespective of the existence of formal rules, a de facto rank and position structure had been formed within the company; and that the employer’s “2025 Performance Evaluation Notice” was nothing more than a temporary notice for the implementation of an evaluation, making it difficult to recognize “dismissal from the branch manager position or conversion to team member upon scoring below 70 points” as a valid standard for changing working conditions or for dismissal.
In light of these factors, the Commission determined that this dismissal measure constituted a deprivation of position and a substantial disadvantageous change in working conditions under the pretext of performance evaluation results, and thus amounted to an unfair dismissal that exceeded the bounds of legitimate exercise of managerial prerogative in personnel matters.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, it is necessary first to determine whether a “position” or “rank” is merely a title, or whether it actually constitutes an essential working condition that affects approval authority, managerial authority, wage level, and calculation of performance-based pay.
If positions such as branch manager, store manager, or team leader are substantively linked to authority, responsibility, and the remuneration system, unilateral removal from such positions or conversion to team member status may be contested as an unfair dismissal or a disadvantageous personnel measure equivalent to dismissal.
Furthermore, where you have suffered a significant disadvantage on the basis of performance evaluation results, you should carefully check whether the evaluation criteria were clearly notified in advance, whether the standards for disadvantageous measures based on evaluation results were lawfully established in the rules of employment or personnel regulations, and whether fairness and consistency were maintained in actual operation.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the company’s perspective, where key positions such as branch manager are in place, the rank and position structure and the corresponding working conditions—such as authority, wages, performance-based pay, and benefits—should be clearly documented, and the requirements and procedures for removal from position or demotion should be established in the rules of employment and personnel regulations.
You should bear in mind that it is difficult to justify serious disadvantageous measures such as “removal from position or demotion upon failing to meet a certain score” solely on the basis of a simple performance evaluation notice.
In addition, just as with redundancy dismissals, personnel measures such as deprivation of position or de facto demotion, which are close to a downgrade in status, may infringe the essential content of the employment contract. Accordingly, to have such measures recognized as legitimate by the Labor Relations Commission, it is important to ensure, in a comprehensive manner, business necessity, the degree of disadvantage to the employee, the rationality and fairness of the selection of affected employees, and procedural fairness (such as prior explanation and an opportunity to be heard).
To prevent this type of unfair dismissal dispute, it is advisable, from the stage of designing the performance evaluation system, to obtain advice from a specialized labor law firm such as Labor Law Firm Law&, and to align the evaluation criteria and the corresponding personnel measures with applicable legal principles. As can be seen from Labor Relations Commission precedents, whether an adjustment of position or rank is a mere personnel order or in substance a dismissal is the core issue. Therefore, it is important to minimize the possibility of disputes through clear rules and consistent operation in advance.
2. Matters Adjudicated
a. Case Overview and Procedural History
It is reasonable to view the employee’s branch manager position not as a mere gratuitous title, but as forming part of the essential content of the employment contract or a significant working condition. Regardless of the existence of formal rules, the company in this case appears to have, in practice, a rank and position structure, as evidenced by the existence of an approval line that shows the stages of approval by the person with approval authority and the chain of command and supervision in the course of business operations. The employer’s Exhibit No. 13 (2025 Performance Evaluation Notice) is nothing more than a temporary notice for the implementation of an evaluation, and “removal from the branch manager position (or change of position to team member) upon a final evaluation score below 70 points …”
3. Summary of Decision
a. Summary of the Labor Relations Commission’s Reasoning
It is reasonable to view the employee’s branch manager position not as a mere gratuitous title, but as forming part of the essential content of the employment contract or a significant working condition. Regardless of the existence of formal rules, the company in this case appears to have, in practice, a rank and position structure, as evidenced by the existence of an approval line that shows the stages of approval by the person with approval authority and the chain of command and supervision in the course of business operations. The employer’s Exhibit No. 13 (2025 Performance Evaluation Notice) is nothing more than a temporary notice for the implementation of an evaluation, and “removal from the branch manager position (or change of position to team member) upon a final evaluation score below 70 points …” /
[See More Related Precedents]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Precedent” – Date of Decision: – Case No.: Initial Decision Maintained
- “‘Non-Existence of Expectation of Renewal (Expiration of Fixed-Term Employment Contract)’ Unfair Dismissal Precedent”
- “‘Expression of Intent to Resign (Resignation Remark Made by Telephone)’ Unfair Dismissal Precedent”
[Tags]
Unfair dismissal, removal from position (dismissal of branch manager), performance evaluation · poor performance, 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 part of Labor Law Firm Law&’s “Unfair Dismissal Precedents” series.
※ You can view the previous article, “‘Calculation of the Number of Regular Employees (Construction Company with Fewer Than 5 Employees)’ Unfair Dismissal Precedent,” in a new window.
※ The list of precedents related to removal from position (dismissal of branch manager) can be found under “List of Precedents Related to Removal from Position (Dismissal of Branch Manager).”
※ Korean version of this case: Korean article
