Corporate trends / Performance record
Unfair Dismissal Precedent on “Abuse of Disciplinary Discretion (Compliance with Instructions in a Management Control Dispute)” (Unfair Dismissal 307)
- Date2026/03/22 04:12
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[Case Information]
This case is a precedent in which the issue of “abuse of disciplinary discretion (compliance with instructions in a management control dispute)” resulted in a partial win for the employees.
Adjudicating Body: Incheon Regional Labor Relations Commission
Case: 2025Buhae823 ○○○ Application for Remedy for Unfair Dismissal
Decision date: 2026.01.09 · Result: Partially upheld
Summary of key issues:
A. Whether the standby orders and dismissals are valid
It cannot be conclusively stated that the standby orders and dismissals were standby orders or dismissals made without authority, and therefore the standby orders and dismissals are valid.
1. Legal Implications
This article reviews the limits of personnel orders and disciplinary dismissal in the context of a management control dispute, through a labor commission decision on unfair dismissal and standby orders. The case is Incheon Regional Labor Relations Commission 2025Buhae823, and it is highly instructive because it involves a type of dispute that Labor Law Firm Law& frequently encounters in practice.
Ⅰ. Case Overview
In this case, the company first placed the employees on standby, and later dismissed them on disciplinary grounds for failing to follow the company’s personnel/command system and instead complying with the chairman’s instructions. The employees filed an application with the Labor Relations Commission, claiming that both the standby orders and the dismissals constituted unfair dismissal.
Ⅱ. Issues
The issue in this case is:
“In a situation where there is a dispute over management control between the chairman and the president, whether standby orders and disciplinary dismissal imposed on employees for following the instructions of one side (the chairman) constitute legitimate personnel measures, or whether they amount to unfair dismissal due to the employer’s deviation from and abuse of its disciplinary discretion.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that the employer had a business necessity to reassign the employees’ duties; that during the standby period the employees received their base salary and it was difficult to view the resulting disadvantage as significantly exceeding the level of hardship employees are ordinarily expected to bear; and that, because the reasons for the standby orders and the dismissals differed, there remained a remedial interest with respect to the standby orders themselves.
On this basis, the panel found that the employees’ conduct in rejecting the company’s official personnel/command system and acting in accordance with the chairman’s instructions did constitute grounds for discipline.
However, the panel also found that the employees did not pursue private gain, but merely followed the instructions of the chairman, who at the time formally held the position of representative director, in the course of a management control struggle between the president and the chairman; that even if this caused some disruption to work order, imposing disciplinary dismissal immediately on that basis was a sanction that was grossly disproportionate by social standards; and that, in substance, the employer had used disciplinary measures to exclude employees aligned with one side of the management control dispute.
On these grounds, the panel held that the dismissal in this case constituted unfair dismissal due to deviation from and abuse of the employer’s disciplinary discretion.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, even where there are internal disputes over management control or corporate governance, it is important to identify and follow the official personnel/command structure and reporting lines as clearly as possible. However, as in this case, if there is a reasonable basis for having followed the instructions of a chairman who held the position of representative director, and there was no pursuit of private gain or malicious intent, then even if grounds for discipline are acknowledged, there is a substantial basis to challenge the ultimate sanction of dismissal as unfair dismissal.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s perspective, when taking personnel measures such as standby orders or redundancy dismissals, it is necessary to clearly specify the grounds and reasons under the personnel regulations and to leave a record showing that business necessity was weighed against the employee’s livelihood-related disadvantage. In particular, in situations involving management control disputes, disciplinary dismissal that effectively shifts responsibility onto employees carries a high risk of being found an abuse of disciplinary discretion by the Labor Relations Commission. Employers should therefore carefully review in advance the level and purpose of discipline and the internal allocation of authority within the company.
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Whether the standby orders and dismissals are valid
It cannot be conclusively stated that the standby orders and dismissals were standby orders or dismissals made without authority, and therefore the standby orders and dismissals are valid.
B. Whether there is a remedial interest in the standby orders
Because the reasons for the standby orders and the dismissals differ, and because during the standby period the employees received only their base salary, there is a remedial interest in the standby orders in order to remove that disadvantage.
C. Whether the standby orders were justified
The standby orders were issued in circumstances where the employer had a business necessity to reassign the employees’ duties, and the resulting livelihood-related disadvantage cannot be regarded as at a level that employees could not reasonably endure. Accordingly, the standby orders are justified.
D. Whether the dismissals were justified
The employees refused to follow the company’s legitimate personnel/command system and, by arbitrarily carrying out the chairman’s work instructions, caused disruption to the company’s work order and organizational structure; thus, grounds for discipline are acknowledged. However, the employees did not pursue private gain or act with malicious intent, but merely followed the instructions of one side in a management control struggle between the president and the chairman, and the chairman also formally held the position of representative director. Therefore, imposing disciplinary dismissal for matters arising in the course of performing work as instructed by the chairman constitutes a deviation from and abuse of the employer’s disciplinary discretion.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Whether the standby orders and dismissals are valid
It cannot be conclusively stated that the standby orders and dismissals were standby orders or dismissals made without authority, and therefore the standby orders and dismissals are valid.
B. Whether there is a remedial interest in the standby orders
Because the reasons for the standby orders and the dismissals differ, and because during the standby period the employees received only their base salary, there is a remedial interest in the standby orders in order to remove that disadvantage.
C. Whether the standby orders were justified
The standby orders were issued in circumstances where the employer had a business necessity to reassign the employees’ duties, and the resulting livelihood-related disadvantage cannot be regarded as at a level that employees could not reasonably endure. Accordingly, the standby orders are justified.
D. Whether the dismissals were justified
The employees refused to follow the company’s legitimate personnel/command system and, by arbitrarily carrying out the chairman’s work instructions, caused disruption to the company’s work order and organizational structure; thus, grounds for discipline are acknowledged. However, the employees did not pursue private gain or act with malicious intent, but merely followed the instructions of one side in a management control struggle between the president and the chairman, and the chairman also formally held the position of representative director. Therefore, imposing disciplinary dismissal for matters arising in the course of performing work as instructed by the chairman constitutes a deviation from and abuse of the employer’s disciplinary discretion.
/
[See More Related Decisions]
- “Unfair Dismissal Precedent on ‘Reassignment (Sales Group Reorganization)’”
- “Unfair Dismissal Precedent on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Precedent on ‘Statute of Limitations and Level of Discipline (Leakage of Company Secrets)’”
[Tags]
Unfair dismissal, abuse of disciplinary discretion (compliance with instructions in a management control dispute), disciplinary dismissal, violation of company policy · non-compliance with work instructions, 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 Precedent” series.
※ You can view the previous article, “Unfair Dismissal Precedent on ‘Statute of Limitations and Level of Discipline (Leakage of Company Secrets)’,” in a new window.
※ The list of precedents related to abuse of disciplinary discretion (compliance with instructions in a management control dispute) can be found in the “List of Precedents on Abuse of Disciplinary Discretion (Compliance with Instructions in a Management Control Dispute).”
※ Korean version of this case: Korean article
This case is a precedent in which the issue of “abuse of disciplinary discretion (compliance with instructions in a management control dispute)” resulted in a partial win for the employees.
Adjudicating Body: Incheon Regional Labor Relations Commission
Case: 2025Buhae823 ○○○ Application for Remedy for Unfair Dismissal
Decision date: 2026.01.09 · Result: Partially upheld
Summary of key issues:
A. Whether the standby orders and dismissals are valid
It cannot be conclusively stated that the standby orders and dismissals were standby orders or dismissals made without authority, and therefore the standby orders and dismissals are valid.
1. Legal Implications
This article reviews the limits of personnel orders and disciplinary dismissal in the context of a management control dispute, through a labor commission decision on unfair dismissal and standby orders. The case is Incheon Regional Labor Relations Commission 2025Buhae823, and it is highly instructive because it involves a type of dispute that Labor Law Firm Law& frequently encounters in practice.
Ⅰ. Case Overview
In this case, the company first placed the employees on standby, and later dismissed them on disciplinary grounds for failing to follow the company’s personnel/command system and instead complying with the chairman’s instructions. The employees filed an application with the Labor Relations Commission, claiming that both the standby orders and the dismissals constituted unfair dismissal.
Ⅱ. Issues
The issue in this case is:
“In a situation where there is a dispute over management control between the chairman and the president, whether standby orders and disciplinary dismissal imposed on employees for following the instructions of one side (the chairman) constitute legitimate personnel measures, or whether they amount to unfair dismissal due to the employer’s deviation from and abuse of its disciplinary discretion.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that the employer had a business necessity to reassign the employees’ duties; that during the standby period the employees received their base salary and it was difficult to view the resulting disadvantage as significantly exceeding the level of hardship employees are ordinarily expected to bear; and that, because the reasons for the standby orders and the dismissals differed, there remained a remedial interest with respect to the standby orders themselves.
On this basis, the panel found that the employees’ conduct in rejecting the company’s official personnel/command system and acting in accordance with the chairman’s instructions did constitute grounds for discipline.
However, the panel also found that the employees did not pursue private gain, but merely followed the instructions of the chairman, who at the time formally held the position of representative director, in the course of a management control struggle between the president and the chairman; that even if this caused some disruption to work order, imposing disciplinary dismissal immediately on that basis was a sanction that was grossly disproportionate by social standards; and that, in substance, the employer had used disciplinary measures to exclude employees aligned with one side of the management control dispute.
On these grounds, the panel held that the dismissal in this case constituted unfair dismissal due to deviation from and abuse of the employer’s disciplinary discretion.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, even where there are internal disputes over management control or corporate governance, it is important to identify and follow the official personnel/command structure and reporting lines as clearly as possible. However, as in this case, if there is a reasonable basis for having followed the instructions of a chairman who held the position of representative director, and there was no pursuit of private gain or malicious intent, then even if grounds for discipline are acknowledged, there is a substantial basis to challenge the ultimate sanction of dismissal as unfair dismissal.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s perspective, when taking personnel measures such as standby orders or redundancy dismissals, it is necessary to clearly specify the grounds and reasons under the personnel regulations and to leave a record showing that business necessity was weighed against the employee’s livelihood-related disadvantage. In particular, in situations involving management control disputes, disciplinary dismissal that effectively shifts responsibility onto employees carries a high risk of being found an abuse of disciplinary discretion by the Labor Relations Commission. Employers should therefore carefully review in advance the level and purpose of discipline and the internal allocation of authority within the company.
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Whether the standby orders and dismissals are valid
It cannot be conclusively stated that the standby orders and dismissals were standby orders or dismissals made without authority, and therefore the standby orders and dismissals are valid.
B. Whether there is a remedial interest in the standby orders
Because the reasons for the standby orders and the dismissals differ, and because during the standby period the employees received only their base salary, there is a remedial interest in the standby orders in order to remove that disadvantage.
C. Whether the standby orders were justified
The standby orders were issued in circumstances where the employer had a business necessity to reassign the employees’ duties, and the resulting livelihood-related disadvantage cannot be regarded as at a level that employees could not reasonably endure. Accordingly, the standby orders are justified.
D. Whether the dismissals were justified
The employees refused to follow the company’s legitimate personnel/command system and, by arbitrarily carrying out the chairman’s work instructions, caused disruption to the company’s work order and organizational structure; thus, grounds for discipline are acknowledged. However, the employees did not pursue private gain or act with malicious intent, but merely followed the instructions of one side in a management control struggle between the president and the chairman, and the chairman also formally held the position of representative director. Therefore, imposing disciplinary dismissal for matters arising in the course of performing work as instructed by the chairman constitutes a deviation from and abuse of the employer’s disciplinary discretion.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Whether the standby orders and dismissals are valid
It cannot be conclusively stated that the standby orders and dismissals were standby orders or dismissals made without authority, and therefore the standby orders and dismissals are valid.
B. Whether there is a remedial interest in the standby orders
Because the reasons for the standby orders and the dismissals differ, and because during the standby period the employees received only their base salary, there is a remedial interest in the standby orders in order to remove that disadvantage.
C. Whether the standby orders were justified
The standby orders were issued in circumstances where the employer had a business necessity to reassign the employees’ duties, and the resulting livelihood-related disadvantage cannot be regarded as at a level that employees could not reasonably endure. Accordingly, the standby orders are justified.
D. Whether the dismissals were justified
The employees refused to follow the company’s legitimate personnel/command system and, by arbitrarily carrying out the chairman’s work instructions, caused disruption to the company’s work order and organizational structure; thus, grounds for discipline are acknowledged. However, the employees did not pursue private gain or act with malicious intent, but merely followed the instructions of one side in a management control struggle between the president and the chairman, and the chairman also formally held the position of representative director. Therefore, imposing disciplinary dismissal for matters arising in the course of performing work as instructed by the chairman constitutes a deviation from and abuse of the employer’s disciplinary discretion.
/
[See More Related Decisions]
- “Unfair Dismissal Precedent on ‘Reassignment (Sales Group Reorganization)’”
- “Unfair Dismissal Precedent on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Precedent on ‘Statute of Limitations and Level of Discipline (Leakage of Company Secrets)’”
[Tags]
Unfair dismissal, abuse of disciplinary discretion (compliance with instructions in a management control dispute), disciplinary dismissal, violation of company policy · non-compliance with work instructions, 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 Precedent” series.
※ You can view the previous article, “Unfair Dismissal Precedent on ‘Statute of Limitations and Level of Discipline (Leakage of Company Secrets)’,” in a new window.
※ The list of precedents related to abuse of disciplinary discretion (compliance with instructions in a management control dispute) can be found in the “List of Precedents on Abuse of Disciplinary Discretion (Compliance with Instructions in a Management Control Dispute).”
※ Korean version of this case: Korean article
