Corporate trends / Performance record
Unfair Dismissal Decision on “Not a Transfer/Demotion (Manager → Staff)” (Unfair Dismissal 359)
- Date2026/04/09 04:04
- Read 177
[Case Information]
This case concerns a decision in which the employer prevailed (application dismissed) on the issue of “not a transfer/demotion (Manager → Staff).”
Decision body: Seoul Regional Labor Relations Commission, 2025BuHae10139 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026.02.20 · Case outcome: Dismissed
Key issue summary: (a)
1. Legal Implications
This unfair dismissal case is a transfer/job change matter heard by the Seoul Regional Labor Relations Commission, examining how the Commission assessed the legitimacy of a personnel reassignment. Based on the Commission’s decision and the practical experience of Labor Law Firm Law&, this article organizes how to manage risks of unfair dismissal and redundancy dismissal when exercising managerial prerogatives over personnel.
Ⅰ. Case Overview
The employee worked at one branch in the position of “Manager.” When the company decided to close that workplace, it issued a personnel order reassigning the employee to another branch. In this process, the employee’s title changed from “Manager” to “Staff,” and the employee filed an application with the Labor Relations Commission for a remedy for unfair dismissal (unfair personnel action), arguing that this amounted in substance to an unjust personnel order equivalent to a demotion.
Ⅱ. Issues
The issues in this case are whether the personnel order changing the employee’s position from Manager to Staff constitutes a disciplinary demotion, and whether the transfer/job change based on the closure of the workplace constitutes a legitimate exercise of managerial prerogative in terms of business necessity, personal hardship, and consultation procedures.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that the company’s rules of employment did not provide “demotion” as a type of disciplinary action, and that under the company’s official rank structure only the representative director and employees exist, such that team leader, team member, manager, and staff are positions (duties) rather than ranks. In light of these factors, the panel held that the personnel order in this case did not constitute a disciplinary demotion.
The panel further noted that it was inevitable to reassign personnel because the store where the employee had worked as Manager was closed; that even after the personnel order, the core working conditions such as employment type, base salary, and working hours remained unchanged; that “Manager” was merely a position assigned to a branch manager, making it difficult to conclude that an appointment as Staff was necessarily a downgrade in status; and that even if the employee’s duties were somewhat reduced, it was difficult to view this as personal hardship that markedly exceeded the level ordinarily tolerable.
In addition, the panel considered that, starting about two months before the closure decision, the company had informed the employee of the closure and the planned personnel reassignment and had heard the employee’s views, thereby undergoing a certain degree of consultation and explanation. On this basis, the panel held that it was difficult to find a violation of the procedural obligations required under the principle of good faith in the course of the personnel reassignment.
Ultimately, the dismissal in this case was not found to be unfair, on the grounds that the personnel order did not constitute a disciplinary demotion and that the transfer was justified in terms of business necessity, personal hardship, and consultation procedures.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, a change in position or branch does not automatically amount to unfair dismissal or unfair transfer. It is necessary to examine in detail whether it constitutes “demotion” as defined as a disciplinary measure in the rules of employment, and how the core working conditions—actual wages, working hours, and employment type—have changed. However, if the transfer causes personal hardship at a level that is ordinarily difficult to endure (for example, excessive commuting burden, a sharp decrease in wages, etc.), or if there are circumstances suggesting that the transfer was imposed as a sanction targeting a specific employee, the employee may contest the matter before the Labor Relations Commission focusing on those aspects. It is therefore advisable to carefully organize all circumstances before and after the personnel reassignment.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s standpoint, first, it is important to clearly distinguish and set out in the rules of employment the types of disciplinary measures and personnel orders (transfer, reassignment, placement on standby, etc.), and to clarify whether measures such as “demotion” will be operated as disciplinary sanctions. Second, employers should secure materials that can prove the business necessity of transfers, such as store closures or organizational restructuring, and design personnel plans in a way that maintains employees’ wages, working hours, and employment type as much as possible while minimizing personal hardship. Third, if, from the time a closure or transfer is anticipated, the employer explains the situation to the employee and hears their views sufficiently in advance, and leaves a record of this process in documents or minutes, such records can serve as important defensive materials when the Labor Relations Commission reviews whether there has been an abuse of managerial prerogative.
2. Matters Decided
a. Case Overview and Procedural History
a. Whether the personnel order in this case constitutes a demotion
(1) Considering that the company’s rules of employment do not specify demotion as a type of disciplinary measure, and (2) that the company’s ranks consist only of representative director and employee, with no basis to regard team leader and team member as ranks, the panel held that the personnel order does not constitute a disciplinary demotion.
b. Whether the personnel order was legitimate
1) Business necessity
Because the workplace where the employee had worked as Manager was closed, the panel found that the employer had business necessity to transfer the employee to another branch.
2) Whether personal hardship arose
(1) The employee’s working conditions, such as employment type, base salary, and working hours, did not change after the personnel order.
(2) The employee argued that being reassigned from “Manager” to “Staff” caused disadvantages such as reduced authority and a downgrade in status; however, as Manager is merely a position assigned to a branch manager, it is difficult to view this as a downgrade in status.
(3) Even if the employee’s duties were somewhat changed or reduced, it cannot be regarded as an abuse of discretion to such an extent as to render the personnel order invalid. Considering these points together, the panel found that the level of personal hardship was within a tolerable range.
3) Whether good-faith consultation procedures were observed
Because the employer informed the employee of the closure and the personnel reassignment and heard the employee’s views two months before the closure decision, the panel held that the procedures were lawful.
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. Whether the personnel order in this case constitutes a demotion
(1) Considering that the company’s rules of employment do not specify demotion as a type of disciplinary measure, and (2) that the company’s ranks consist only of representative director and employee, with no basis to regard team leader and team member as ranks, the panel held that the personnel order does not constitute a disciplinary demotion.
b. Whether the personnel order was legitimate
1) Business necessity
Because the workplace where the employee had worked as Manager was closed, the panel found that the employer had business necessity to transfer the employee to another branch.
2) Whether personal hardship arose
(1) The employee’s working conditions, such as employment type, base salary, and working hours, did not change after the personnel order.
(2) The employee argued that being reassigned from “Manager” to “Staff” caused disadvantages such as reduced authority and a downgrade in status; however, as Manager is merely a position assigned to a branch manager, it is difficult to view this as a downgrade in status.
(3) Even if the employee’s duties were somewhat changed or reduced, it cannot be regarded as an abuse of discretion to such an extent as to render the personnel order invalid. Considering these points together, the panel found that the level of personal hardship was within a tolerable range.
3) Whether good-faith consultation procedures were observed
Because the employer informed the employee of the closure and the personnel reassignment and heard the employee’s views two months before the closure decision, the panel held that the procedures were lawful. /
[More Related Decisions]
- “Unfair Dismissal Decision on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Decision on ‘Expression of Intent to Resign (Resignation Remark by Telephone Call)’”
- “Unfair Dismissal Decision on ‘Dismissal (Non-Appearance at Hearing)’” – Decision date: – Case number: Dismissed
[Tags]
Unfair dismissal, Not a transfer/demotion (Manager → Staff), Personnel order/transfer, Performance evaluation/poor performance, Other, 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.
※ You can view the previous article, “Unfair Dismissal Decision on ‘Expectation of Conversion to Regular Employment (Verbal Promise by HR Officer)’,” in a new window.
※ You can also view the list of decisions related to Not a transfer/demotion (Manager → Staff) in the “Not a transfer/demotion (Manager → Staff) Related Decisions List.”
※ Korean version of this case: Korean article
This case concerns a decision in which the employer prevailed (application dismissed) on the issue of “not a transfer/demotion (Manager → Staff).”
Decision body: Seoul Regional Labor Relations Commission, 2025BuHae10139 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026.02.20 · Case outcome: Dismissed
Key issue summary: (a)
1. Legal Implications
This unfair dismissal case is a transfer/job change matter heard by the Seoul Regional Labor Relations Commission, examining how the Commission assessed the legitimacy of a personnel reassignment. Based on the Commission’s decision and the practical experience of Labor Law Firm Law&, this article organizes how to manage risks of unfair dismissal and redundancy dismissal when exercising managerial prerogatives over personnel.
Ⅰ. Case Overview
The employee worked at one branch in the position of “Manager.” When the company decided to close that workplace, it issued a personnel order reassigning the employee to another branch. In this process, the employee’s title changed from “Manager” to “Staff,” and the employee filed an application with the Labor Relations Commission for a remedy for unfair dismissal (unfair personnel action), arguing that this amounted in substance to an unjust personnel order equivalent to a demotion.
Ⅱ. Issues
The issues in this case are whether the personnel order changing the employee’s position from Manager to Staff constitutes a disciplinary demotion, and whether the transfer/job change based on the closure of the workplace constitutes a legitimate exercise of managerial prerogative in terms of business necessity, personal hardship, and consultation procedures.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that the company’s rules of employment did not provide “demotion” as a type of disciplinary action, and that under the company’s official rank structure only the representative director and employees exist, such that team leader, team member, manager, and staff are positions (duties) rather than ranks. In light of these factors, the panel held that the personnel order in this case did not constitute a disciplinary demotion.
The panel further noted that it was inevitable to reassign personnel because the store where the employee had worked as Manager was closed; that even after the personnel order, the core working conditions such as employment type, base salary, and working hours remained unchanged; that “Manager” was merely a position assigned to a branch manager, making it difficult to conclude that an appointment as Staff was necessarily a downgrade in status; and that even if the employee’s duties were somewhat reduced, it was difficult to view this as personal hardship that markedly exceeded the level ordinarily tolerable.
In addition, the panel considered that, starting about two months before the closure decision, the company had informed the employee of the closure and the planned personnel reassignment and had heard the employee’s views, thereby undergoing a certain degree of consultation and explanation. On this basis, the panel held that it was difficult to find a violation of the procedural obligations required under the principle of good faith in the course of the personnel reassignment.
Ultimately, the dismissal in this case was not found to be unfair, on the grounds that the personnel order did not constitute a disciplinary demotion and that the transfer was justified in terms of business necessity, personal hardship, and consultation procedures.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, a change in position or branch does not automatically amount to unfair dismissal or unfair transfer. It is necessary to examine in detail whether it constitutes “demotion” as defined as a disciplinary measure in the rules of employment, and how the core working conditions—actual wages, working hours, and employment type—have changed. However, if the transfer causes personal hardship at a level that is ordinarily difficult to endure (for example, excessive commuting burden, a sharp decrease in wages, etc.), or if there are circumstances suggesting that the transfer was imposed as a sanction targeting a specific employee, the employee may contest the matter before the Labor Relations Commission focusing on those aspects. It is therefore advisable to carefully organize all circumstances before and after the personnel reassignment.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s standpoint, first, it is important to clearly distinguish and set out in the rules of employment the types of disciplinary measures and personnel orders (transfer, reassignment, placement on standby, etc.), and to clarify whether measures such as “demotion” will be operated as disciplinary sanctions. Second, employers should secure materials that can prove the business necessity of transfers, such as store closures or organizational restructuring, and design personnel plans in a way that maintains employees’ wages, working hours, and employment type as much as possible while minimizing personal hardship. Third, if, from the time a closure or transfer is anticipated, the employer explains the situation to the employee and hears their views sufficiently in advance, and leaves a record of this process in documents or minutes, such records can serve as important defensive materials when the Labor Relations Commission reviews whether there has been an abuse of managerial prerogative.
2. Matters Decided
a. Case Overview and Procedural History
a. Whether the personnel order in this case constitutes a demotion
(1) Considering that the company’s rules of employment do not specify demotion as a type of disciplinary measure, and (2) that the company’s ranks consist only of representative director and employee, with no basis to regard team leader and team member as ranks, the panel held that the personnel order does not constitute a disciplinary demotion.
b. Whether the personnel order was legitimate
1) Business necessity
Because the workplace where the employee had worked as Manager was closed, the panel found that the employer had business necessity to transfer the employee to another branch.
2) Whether personal hardship arose
(1) The employee’s working conditions, such as employment type, base salary, and working hours, did not change after the personnel order.
(2) The employee argued that being reassigned from “Manager” to “Staff” caused disadvantages such as reduced authority and a downgrade in status; however, as Manager is merely a position assigned to a branch manager, it is difficult to view this as a downgrade in status.
(3) Even if the employee’s duties were somewhat changed or reduced, it cannot be regarded as an abuse of discretion to such an extent as to render the personnel order invalid. Considering these points together, the panel found that the level of personal hardship was within a tolerable range.
3) Whether good-faith consultation procedures were observed
Because the employer informed the employee of the closure and the personnel reassignment and heard the employee’s views two months before the closure decision, the panel held that the procedures were lawful.
3. Summary of the Decision
a. Summary of the Labor Relations Commission’s Reasoning
a. Whether the personnel order in this case constitutes a demotion
(1) Considering that the company’s rules of employment do not specify demotion as a type of disciplinary measure, and (2) that the company’s ranks consist only of representative director and employee, with no basis to regard team leader and team member as ranks, the panel held that the personnel order does not constitute a disciplinary demotion.
b. Whether the personnel order was legitimate
1) Business necessity
Because the workplace where the employee had worked as Manager was closed, the panel found that the employer had business necessity to transfer the employee to another branch.
2) Whether personal hardship arose
(1) The employee’s working conditions, such as employment type, base salary, and working hours, did not change after the personnel order.
(2) The employee argued that being reassigned from “Manager” to “Staff” caused disadvantages such as reduced authority and a downgrade in status; however, as Manager is merely a position assigned to a branch manager, it is difficult to view this as a downgrade in status.
(3) Even if the employee’s duties were somewhat changed or reduced, it cannot be regarded as an abuse of discretion to such an extent as to render the personnel order invalid. Considering these points together, the panel found that the level of personal hardship was within a tolerable range.
3) Whether good-faith consultation procedures were observed
Because the employer informed the employee of the closure and the personnel reassignment and heard the employee’s views two months before the closure decision, the panel held that the procedures were lawful. /
[More Related Decisions]
- “Unfair Dismissal Decision on ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Decision on ‘Expression of Intent to Resign (Resignation Remark by Telephone Call)’”
- “Unfair Dismissal Decision on ‘Dismissal (Non-Appearance at Hearing)’” – Decision date: – Case number: Dismissed
[Tags]
Unfair dismissal, Not a transfer/demotion (Manager → Staff), Personnel order/transfer, Performance evaluation/poor performance, Other, 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.
※ You can view the previous article, “Unfair Dismissal Decision on ‘Expectation of Conversion to Regular Employment (Verbal Promise by HR Officer)’,” in a new window.
※ You can also view the list of decisions related to Not a transfer/demotion (Manager → Staff) in the “Not a transfer/demotion (Manager → Staff) Related Decisions List.”
※ Korean version of this case: Korean article
