Corporate trends / Performance record
Unfair Dismissal Decision on “Excessive Disciplinary Measure (Three-Month Pay Cut)” (Unfair Dismissal 581)
- Date2026/07/28 04:16
- Read 16
[Case Information]
This case is a decision in which the employee prevailed (full acceptance) on the issue of “excessive disciplinary measure (three-month pay cut).”
Decision Committee: Gyeongbuk Regional Labor Relations Commission 2026Buhae362 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-21 · Outcome: Full Acceptance
Summary of Key Issues:
a. The employee’s misconduct falls under Article 67 of the company’s Rules of Employment and is therefore recognized as grounds for discipline.
1. Legal Implications
Ⅰ. Case Overview
In this case, the company imposed a disciplinary sanction of a three-month pay cut on the employee based on the company’s Rules of Employment in response to the employee’s misconduct. The employee challenged the appropriateness of the level of discipline and filed an application with the Labor Relations Commission for a remedy for unfair dismissal and unfair discipline. The Gyeongbuk Regional Labor Relations Commission acknowledged the existence of grounds for discipline, but focused its review on whether the level of discipline was excessively severe by social standards.
This decision reaffirms the criteria frequently applied in unfair dismissal disputes when assessing the severity of disciplinary measures. It provides important practical guidance both for the Labor Relations Commission’s practice and for the advisory and litigation practice of Labor Law Firm Law&.
Ⅱ. Summary of Issues
The issue in this case is:
“Even where misconduct is recognized as falling under a disciplinary ground under the Rules of Employment, whether, in light of its content and nature and the extent to which it disrupted organizational order, a three-month pay cut constitutes an ‘excessive disciplinary measure’ that has clearly lost its justification by social standards.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that the employee’s misconduct fell under Article 67 of the company’s Rules of Employment and thus constituted grounds for discipline, and that the disciplinary procedures were lawfully conducted in accordance with the Regulations on the Operation of the Personnel Committee. Accordingly, it held that there were no defects in the existence of the disciplinary measure itself or in the procedure.
However, taking into account that, in light of the content and nature of the misconduct, it was difficult to regard the employee’s degree of responsibility as serious, that it was difficult to evaluate the misconduct as so grave as to significantly disrupt corporate order, and that, under general legal principles on the determination of disciplinary measures, the employer’s discretion in imposing discipline is limited where it is clearly unreasonable by social standards, the Commission held that the three-month pay cut was an excessively severe disciplinary measure that departed from and abused the employer’s discretionary authority and was therefore unfair.
The dismissal in this case was thus found to be unfair on the ground that, although the grounds and procedures for discipline were recognized, the level of discipline was excessively severe by social standards.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, even if some misconduct is acknowledged, if the level of discipline is excessive in relation to that misconduct, the employee may apply to the Labor Relations Commission for a remedy for unfair dismissal or unfair discipline and challenge the appropriateness of the disciplinary measure. In particular, it is important to systematically organize and submit mitigating factors such as the motive for the conduct, whether there was intent or negligence, the extent of damage and disruption to organizational order, and the presence or absence of prior disciplinary history.
Moreover, even where the measure is not a redundancy dismissal or a severe disciplinary sanction but a pay cut or suspension, the loss of wages and adverse impact on personnel records can be substantial. Employees should therefore actively contest not only the lawfulness of the procedure but also whether the measure is “clearly excessive by social standards.”
Ⅴ. Practical Points (From the Employer’s Perspective)
From the company’s perspective, even if the employee’s misconduct falls under a disciplinary ground in the Rules of Employment, it is necessary to design the level of discipline carefully, rather than immediately opting for a severe sanction. The company should comprehensively consider the content and nature of the misconduct, the motive, intentionality, extent of damage, degree of disruption to organizational order, and any prior disciplinary history. It should be borne in mind that while the Supreme Court and the Labor Relations Commission recognize the employer’s discretion in imposing discipline, they also deem disciplinary measures that are clearly unreasonable by social standards to be an abuse of discretion and therefore unfair.
In addition, while strictly complying with disciplinary procedures under the Personnel Committee regulations and the Rules of Employment, the company should establish internal standards to ensure that the purpose of discipline (maintenance of order and prevention of recurrence) is proportionate to the means (level of discipline), and that consistency is maintained with similar past cases. Doing so will enhance the company’s ability to defend itself in disputes before the Labor Relations Commission.
In this type of case, what is important for both companies and employees is not only whether there are grounds for discipline, but also whether they can substantiate the reasonableness and proportionality of the level of discipline with evidence and argument. This should be borne in mind in practice.
2. Matters Decided
a. Case Overview and Procedural History
a. The employee’s misconduct falls under Article 67 of the company’s Rules of Employment in this case and is therefore recognized as grounds for discipline.
b. In light of the content and nature of the misconduct, it is difficult to regard the degree of responsibility as serious, and it cannot be viewed as grave misconduct that significantly disrupted organizational order; therefore, the three-month pay cut is excessively severe by social standards and is unfair.
c. The disciplinary procedure is recognized as having been lawfully conducted in accordance with the Regulations on the Operation of the Personnel Committee.
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. The employee’s misconduct falls under Article 67 of the company’s Rules of Employment in this case and is therefore recognized as grounds for discipline.
b. In light of the content and nature of the misconduct, it is difficult to regard the degree of responsibility as serious, and it cannot be viewed as grave misconduct that significantly disrupted organizational order; therefore, the three-month pay cut is excessively severe by social standards and is unfair.
c. The disciplinary procedure is recognized as having been lawfully conducted in accordance with the Regulations on the Operation of the Personnel Committee. /
[See More Related Decisions]
- “Unfair Dismissal Decision on ‘Determination of Disciplinary Dismissal (Drunk Driving·Assault on Superior)’”
- “Unfair Dismissal Decision on ‘Determination of Disciplinary Measure (Unauthorized Departure from University In-Person Lecture)’”
- “Unfair Dismissal Decision on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
[Tags]
Unfair dismissal, excessive disciplinary measure (three-month pay cut), disciplinary dismissal (disciplinary action), 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 Decisions” series.
※ The previous article, “Unfair Dismissal Decision on ‘Determination of Disciplinary Dismissal (Drunk Driving·Assault on Superior)’,” can be viewed in a new window.
※ A list of decisions related to excessive disciplinary measures (three-month pay cut) can be found under “List of Decisions on Excessive Disciplinary Measure (Three-Month Pay Cut).”
※ Korean version of this case: Korean article
This case is a decision in which the employee prevailed (full acceptance) on the issue of “excessive disciplinary measure (three-month pay cut).”
Decision Committee: Gyeongbuk Regional Labor Relations Commission 2026Buhae362 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-21 · Outcome: Full Acceptance
Summary of Key Issues:
a. The employee’s misconduct falls under Article 67 of the company’s Rules of Employment and is therefore recognized as grounds for discipline.
1. Legal Implications
Ⅰ. Case Overview
In this case, the company imposed a disciplinary sanction of a three-month pay cut on the employee based on the company’s Rules of Employment in response to the employee’s misconduct. The employee challenged the appropriateness of the level of discipline and filed an application with the Labor Relations Commission for a remedy for unfair dismissal and unfair discipline. The Gyeongbuk Regional Labor Relations Commission acknowledged the existence of grounds for discipline, but focused its review on whether the level of discipline was excessively severe by social standards.
This decision reaffirms the criteria frequently applied in unfair dismissal disputes when assessing the severity of disciplinary measures. It provides important practical guidance both for the Labor Relations Commission’s practice and for the advisory and litigation practice of Labor Law Firm Law&.
Ⅱ. Summary of Issues
The issue in this case is:
“Even where misconduct is recognized as falling under a disciplinary ground under the Rules of Employment, whether, in light of its content and nature and the extent to which it disrupted organizational order, a three-month pay cut constitutes an ‘excessive disciplinary measure’ that has clearly lost its justification by social standards.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that the employee’s misconduct fell under Article 67 of the company’s Rules of Employment and thus constituted grounds for discipline, and that the disciplinary procedures were lawfully conducted in accordance with the Regulations on the Operation of the Personnel Committee. Accordingly, it held that there were no defects in the existence of the disciplinary measure itself or in the procedure.
However, taking into account that, in light of the content and nature of the misconduct, it was difficult to regard the employee’s degree of responsibility as serious, that it was difficult to evaluate the misconduct as so grave as to significantly disrupt corporate order, and that, under general legal principles on the determination of disciplinary measures, the employer’s discretion in imposing discipline is limited where it is clearly unreasonable by social standards, the Commission held that the three-month pay cut was an excessively severe disciplinary measure that departed from and abused the employer’s discretionary authority and was therefore unfair.
The dismissal in this case was thus found to be unfair on the ground that, although the grounds and procedures for discipline were recognized, the level of discipline was excessively severe by social standards.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, even if some misconduct is acknowledged, if the level of discipline is excessive in relation to that misconduct, the employee may apply to the Labor Relations Commission for a remedy for unfair dismissal or unfair discipline and challenge the appropriateness of the disciplinary measure. In particular, it is important to systematically organize and submit mitigating factors such as the motive for the conduct, whether there was intent or negligence, the extent of damage and disruption to organizational order, and the presence or absence of prior disciplinary history.
Moreover, even where the measure is not a redundancy dismissal or a severe disciplinary sanction but a pay cut or suspension, the loss of wages and adverse impact on personnel records can be substantial. Employees should therefore actively contest not only the lawfulness of the procedure but also whether the measure is “clearly excessive by social standards.”
Ⅴ. Practical Points (From the Employer’s Perspective)
From the company’s perspective, even if the employee’s misconduct falls under a disciplinary ground in the Rules of Employment, it is necessary to design the level of discipline carefully, rather than immediately opting for a severe sanction. The company should comprehensively consider the content and nature of the misconduct, the motive, intentionality, extent of damage, degree of disruption to organizational order, and any prior disciplinary history. It should be borne in mind that while the Supreme Court and the Labor Relations Commission recognize the employer’s discretion in imposing discipline, they also deem disciplinary measures that are clearly unreasonable by social standards to be an abuse of discretion and therefore unfair.
In addition, while strictly complying with disciplinary procedures under the Personnel Committee regulations and the Rules of Employment, the company should establish internal standards to ensure that the purpose of discipline (maintenance of order and prevention of recurrence) is proportionate to the means (level of discipline), and that consistency is maintained with similar past cases. Doing so will enhance the company’s ability to defend itself in disputes before the Labor Relations Commission.
In this type of case, what is important for both companies and employees is not only whether there are grounds for discipline, but also whether they can substantiate the reasonableness and proportionality of the level of discipline with evidence and argument. This should be borne in mind in practice.
2. Matters Decided
a. Case Overview and Procedural History
a. The employee’s misconduct falls under Article 67 of the company’s Rules of Employment in this case and is therefore recognized as grounds for discipline.
b. In light of the content and nature of the misconduct, it is difficult to regard the degree of responsibility as serious, and it cannot be viewed as grave misconduct that significantly disrupted organizational order; therefore, the three-month pay cut is excessively severe by social standards and is unfair.
c. The disciplinary procedure is recognized as having been lawfully conducted in accordance with the Regulations on the Operation of the Personnel Committee.
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. The employee’s misconduct falls under Article 67 of the company’s Rules of Employment in this case and is therefore recognized as grounds for discipline.
b. In light of the content and nature of the misconduct, it is difficult to regard the degree of responsibility as serious, and it cannot be viewed as grave misconduct that significantly disrupted organizational order; therefore, the three-month pay cut is excessively severe by social standards and is unfair.
c. The disciplinary procedure is recognized as having been lawfully conducted in accordance with the Regulations on the Operation of the Personnel Committee. /
[See More Related Decisions]
- “Unfair Dismissal Decision on ‘Determination of Disciplinary Dismissal (Drunk Driving·Assault on Superior)’”
- “Unfair Dismissal Decision on ‘Determination of Disciplinary Measure (Unauthorized Departure from University In-Person Lecture)’”
- “Unfair Dismissal Decision on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
[Tags]
Unfair dismissal, excessive disciplinary measure (three-month pay cut), disciplinary dismissal (disciplinary action), 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 Decisions” series.
※ The previous article, “Unfair Dismissal Decision on ‘Determination of Disciplinary Dismissal (Drunk Driving·Assault on Superior)’,” can be viewed in a new window.
※ A list of decisions related to excessive disciplinary measures (three-month pay cut) can be found under “List of Decisions on Excessive Disciplinary Measure (Three-Month Pay Cut).”
※ Korean version of this case: Korean article
