Corporate trends / Performance record
‘Excessive Disciplinary Measure (Misappropriation of Corporation Budget Funds)’ Unfair Dismissal Case (Unfair Dismissal 116)
- Date2026/01/16 04:09
- Read 240
[Case Information]
This case is a precedent in which the employee prevailed in full (all claims upheld) on the issue of “excessive disciplinary measure (misappropriation of corporation budget funds).”
Adjudicating body: Gyeongbuk Regional Labor Relations Commission 2025Buhae835 ○ ○ ○ Application for Remedy for Unfair Dismissal
2025.11.17 · Case outcome: All claims upheld
Summary of key issues:
A. Existence of grounds for discipline
The employee’s act of “using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds” constitutes a ground for discipline as stipulated in Articles 71(1) and (2) of the Rules of Employment and Articles 7(1), 7(2), and 10(2) of the Code of Ethics.
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, an employee of a public corporation was disciplined on the ground that he/she used the corporation’s budget for purposes other than its intended use, thereby misappropriating public funds, and the employee applied to the Labor Relations Commission for relief. The employer imposed a severe disciplinary measure of three months’ suspension from duty, citing violations of the Rules of Employment and the Code of Ethics, while the employee contested the legitimacy of the grounds for discipline, the level of discipline, and the disciplinary procedures.
The Labor Relations Commission found that, although the grounds and procedures for discipline were largely lawful, the level of discipline was excessively harsh and thus constituted a deviation or abuse of the employer’s discretionary authority. Through this precedent, Labor Law Firm Law& seeks to summarize practical points to be noted in cases where the severity of disciplinary measures such as unfair dismissal, suspension, and pay reduction is in dispute.
Ⅱ. Summary of Issues
The issue in this case is:
“Even where the act of misappropriating public funds by using the corporation’s budget for purposes other than its intended use constitutes a ground for discipline, whether the disciplinary measure of three months’ suspension from duty is so excessively harsh by social standards as to amount to unfair dismissal (unfair discipline).”
Ⅲ. Summary of the Labor Relations Commission’s Decision
The adjudicating panel in this case found that the employer’s asserted ground—“the act of using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds”—constitutes a ground for discipline expressly set forth in the Rules of Employment and the Code of Ethics; that there were no particular defects in the disciplinary procedures, including prior written notice of the convening of the Personnel Committee and the opportunity to attend, proper composition of the committee, and implementation of the reconsideration procedures; and that, nevertheless, in light of the nature and degree of the employee’s misconduct, the three‑month suspension from duty was excessively severe compared to the public‑interest purpose the employer sought to achieve through discipline, and therefore amounted to a deviation or abuse of the employer’s discretionary authority in imposing discipline.
The dismissal in this case was thus held to be unfair on the ground that, although the grounds and procedures for discipline were recognized, the level of discipline was grossly unreasonable by social standards.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, even where misconduct such as misappropriation of public funds is acknowledged, this does not automatically render all severe disciplinary measures such as dismissal or suspension lawful. The existence of grounds for discipline, compliance with disciplinary procedures, and excessiveness of the level of discipline are each assessed separately. Accordingly, when filing an application for relief with the Labor Relations Commission, it is important to specifically allege and prove that the level of discipline is excessive by explaining the circumstances of one’s conduct, whether any damage was remedied, past work attitude, and similar factors.
In addition, you should keep records of what documents were exchanged and what statements you made during the process—such as the notice of attendance at the Personnel Committee and the opportunity to present explanations—so that you can systematically contest the substance, procedure, and level of the disciplinary measure before the Labor Relations Commission at a later stage.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s perspective, even where the grounds for discipline are clear and the disciplinary procedures have been lawfully followed, if the level of discipline is excessive in light of the nature and degree of the misconduct, the Labor Relations Commission may still find the measure to be unfair discipline (unfair dismissal). In particular, even in cases of serious misconduct such as misappropriation of public funds or receipt of money or valuables, the level of discipline must be set within a range acceptable by social standards, taking into comprehensive account factors such as whether the damage has been remedied, the amount involved, the employee’s duties and position, any similar prior record, and the actual impact on organizational order.
When revising disciplinary regulations, it is advisable to provide a broad range of possible disciplinary levels by type of misconduct, and in actual cases to document mitigating and aggravating factors so that you can demonstrate that your exercise of discretion was reasonable. At the stage of proceedings before the Labor Relations Commission, consulting with experts such as Labor Law Firm Law& in advance to design an evidentiary strategy for each of the grounds, procedures, and level of discipline will be of great assistance in preventing disputes and mounting a defense.
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Existence of grounds for discipline
The employee’s act of “using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds” constitutes a ground for discipline as stipulated in Articles 71(1) and (2) of the Rules of Employment and Articles 7(1), 7(2), and 10(2) of the Code of Ethics.
B. Appropriateness of the level of discipline
A three‑month suspension from duty is deemed to be an excessively severe measure compared to the degree of the employee’s wrongdoing, even taking into account the public‑interest purpose the employer seeks to achieve through discipline, and therefore is considered a deviation or abuse of discretionary authority.
C. Legality of the disciplinary procedures
The employer gave the employee prior written notice to attend the Personnel Committee before it was convened, and the employee’s direct attendance afforded an opportunity to present explanations. The Personnel Committee was properly constituted, deliberated, and resolved the matters submitted to it, and the appeal (reconsideration) procedures were conducted in accordance with the regulations. In light of these facts, there is no particular defect in the disciplinary procedures.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Decision
A. Existence of grounds for discipline
The employee’s act of “using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds” constitutes a ground for discipline as stipulated in Articles 71(1) and (2) of the Rules of Employment and Articles 7(1), 7(2), and 10(2) of the Code of Ethics.
B. Appropriateness of the level of discipline
A three‑month suspension from duty is deemed to be an excessively severe measure compared to the degree of the employee’s wrongdoing, even taking into account the public‑interest purpose the employer seeks to achieve through discipline, and therefore is considered a deviation or abuse of discretionary authority.
C. Legality of the disciplinary procedures
The employer gave the employee prior written notice to attend the Personnel Committee before it was convened, and the employee’s direct attendance afforded an opportunity to present explanations. The Personnel Committee was properly constituted, deliberated, and resolved the matters submitted to it, and the appeal (reconsideration) procedures were conducted in accordance with the regulations. In light of these facts, there is no particular defect in the disciplinary procedures. /
[See More Related Precedents]
- “Unfair Dismissal Precedent on ‘Procedural Defect (Site Manager Redundancy Dismissal)’”
- “Unfair Dismissal Precedent on ‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’”
- “Unfair Dismissal Precedent on ‘Failure to Satisfy Requirements for Redundancy Dismissal (Workout Company)’”
[Tags]
Unfair dismissal, excessive disciplinary measure (misappropriation of corporation budget funds), disciplinary dismissal (disciplinary action), violation of company policy · noncompliance 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 Precedents” series.
※ You can view the previous article, “Unfair Dismissal Precedent on ‘Procedural Defect (Site Manager Redundancy Dismissal)’,” in a new window.
※ The list of precedents related to excessive disciplinary measure (misappropriation of corporation budget funds) can be viewed together at “List of Precedents Related to Excessive Disciplinary Measure (Misappropriation of Corporation Budget Funds).”
※ Korean version of this case: Korean article
This case is a precedent in which the employee prevailed in full (all claims upheld) on the issue of “excessive disciplinary measure (misappropriation of corporation budget funds).”
Adjudicating body: Gyeongbuk Regional Labor Relations Commission 2025Buhae835 ○ ○ ○ Application for Remedy for Unfair Dismissal
2025.11.17 · Case outcome: All claims upheld
Summary of key issues:
A. Existence of grounds for discipline
The employee’s act of “using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds” constitutes a ground for discipline as stipulated in Articles 71(1) and (2) of the Rules of Employment and Articles 7(1), 7(2), and 10(2) of the Code of Ethics.
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, an employee of a public corporation was disciplined on the ground that he/she used the corporation’s budget for purposes other than its intended use, thereby misappropriating public funds, and the employee applied to the Labor Relations Commission for relief. The employer imposed a severe disciplinary measure of three months’ suspension from duty, citing violations of the Rules of Employment and the Code of Ethics, while the employee contested the legitimacy of the grounds for discipline, the level of discipline, and the disciplinary procedures.
The Labor Relations Commission found that, although the grounds and procedures for discipline were largely lawful, the level of discipline was excessively harsh and thus constituted a deviation or abuse of the employer’s discretionary authority. Through this precedent, Labor Law Firm Law& seeks to summarize practical points to be noted in cases where the severity of disciplinary measures such as unfair dismissal, suspension, and pay reduction is in dispute.
Ⅱ. Summary of Issues
The issue in this case is:
“Even where the act of misappropriating public funds by using the corporation’s budget for purposes other than its intended use constitutes a ground for discipline, whether the disciplinary measure of three months’ suspension from duty is so excessively harsh by social standards as to amount to unfair dismissal (unfair discipline).”
Ⅲ. Summary of the Labor Relations Commission’s Decision
The adjudicating panel in this case found that the employer’s asserted ground—“the act of using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds”—constitutes a ground for discipline expressly set forth in the Rules of Employment and the Code of Ethics; that there were no particular defects in the disciplinary procedures, including prior written notice of the convening of the Personnel Committee and the opportunity to attend, proper composition of the committee, and implementation of the reconsideration procedures; and that, nevertheless, in light of the nature and degree of the employee’s misconduct, the three‑month suspension from duty was excessively severe compared to the public‑interest purpose the employer sought to achieve through discipline, and therefore amounted to a deviation or abuse of the employer’s discretionary authority in imposing discipline.
The dismissal in this case was thus held to be unfair on the ground that, although the grounds and procedures for discipline were recognized, the level of discipline was grossly unreasonable by social standards.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s standpoint, even where misconduct such as misappropriation of public funds is acknowledged, this does not automatically render all severe disciplinary measures such as dismissal or suspension lawful. The existence of grounds for discipline, compliance with disciplinary procedures, and excessiveness of the level of discipline are each assessed separately. Accordingly, when filing an application for relief with the Labor Relations Commission, it is important to specifically allege and prove that the level of discipline is excessive by explaining the circumstances of one’s conduct, whether any damage was remedied, past work attitude, and similar factors.
In addition, you should keep records of what documents were exchanged and what statements you made during the process—such as the notice of attendance at the Personnel Committee and the opportunity to present explanations—so that you can systematically contest the substance, procedure, and level of the disciplinary measure before the Labor Relations Commission at a later stage.
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s perspective, even where the grounds for discipline are clear and the disciplinary procedures have been lawfully followed, if the level of discipline is excessive in light of the nature and degree of the misconduct, the Labor Relations Commission may still find the measure to be unfair discipline (unfair dismissal). In particular, even in cases of serious misconduct such as misappropriation of public funds or receipt of money or valuables, the level of discipline must be set within a range acceptable by social standards, taking into comprehensive account factors such as whether the damage has been remedied, the amount involved, the employee’s duties and position, any similar prior record, and the actual impact on organizational order.
When revising disciplinary regulations, it is advisable to provide a broad range of possible disciplinary levels by type of misconduct, and in actual cases to document mitigating and aggravating factors so that you can demonstrate that your exercise of discretion was reasonable. At the stage of proceedings before the Labor Relations Commission, consulting with experts such as Labor Law Firm Law& in advance to design an evidentiary strategy for each of the grounds, procedures, and level of discipline will be of great assistance in preventing disputes and mounting a defense.
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Existence of grounds for discipline
The employee’s act of “using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds” constitutes a ground for discipline as stipulated in Articles 71(1) and (2) of the Rules of Employment and Articles 7(1), 7(2), and 10(2) of the Code of Ethics.
B. Appropriateness of the level of discipline
A three‑month suspension from duty is deemed to be an excessively severe measure compared to the degree of the employee’s wrongdoing, even taking into account the public‑interest purpose the employer seeks to achieve through discipline, and therefore is considered a deviation or abuse of discretionary authority.
C. Legality of the disciplinary procedures
The employer gave the employee prior written notice to attend the Personnel Committee before it was convened, and the employee’s direct attendance afforded an opportunity to present explanations. The Personnel Committee was properly constituted, deliberated, and resolved the matters submitted to it, and the appeal (reconsideration) procedures were conducted in accordance with the regulations. In light of these facts, there is no particular defect in the disciplinary procedures.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Decision
A. Existence of grounds for discipline
The employee’s act of “using the corporation’s budget for purposes other than its intended use and thereby misappropriating public funds” constitutes a ground for discipline as stipulated in Articles 71(1) and (2) of the Rules of Employment and Articles 7(1), 7(2), and 10(2) of the Code of Ethics.
B. Appropriateness of the level of discipline
A three‑month suspension from duty is deemed to be an excessively severe measure compared to the degree of the employee’s wrongdoing, even taking into account the public‑interest purpose the employer seeks to achieve through discipline, and therefore is considered a deviation or abuse of discretionary authority.
C. Legality of the disciplinary procedures
The employer gave the employee prior written notice to attend the Personnel Committee before it was convened, and the employee’s direct attendance afforded an opportunity to present explanations. The Personnel Committee was properly constituted, deliberated, and resolved the matters submitted to it, and the appeal (reconsideration) procedures were conducted in accordance with the regulations. In light of these facts, there is no particular defect in the disciplinary procedures. /
[See More Related Precedents]
- “Unfair Dismissal Precedent on ‘Procedural Defect (Site Manager Redundancy Dismissal)’”
- “Unfair Dismissal Precedent on ‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’”
- “Unfair Dismissal Precedent on ‘Failure to Satisfy Requirements for Redundancy Dismissal (Workout Company)’”
[Tags]
Unfair dismissal, excessive disciplinary measure (misappropriation of corporation budget funds), disciplinary dismissal (disciplinary action), violation of company policy · noncompliance 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 Precedents” series.
※ You can view the previous article, “Unfair Dismissal Precedent on ‘Procedural Defect (Site Manager Redundancy Dismissal)’,” in a new window.
※ The list of precedents related to excessive disciplinary measure (misappropriation of corporation budget funds) can be viewed together at “List of Precedents Related to Excessive Disciplinary Measure (Misappropriation of Corporation Budget Funds).”
※ Korean version of this case: Korean article
