[Case Information] This case is a decision in which the employer prevailed (application dismissed) on the issue of “disciplinary severity (unauthorized sale of goods · misuse of subsidies).” Adjudicating body: Jeonnam Regional Labor Relations Commission 2026Buhae471 ○ ○ ○ Application for Remedy for Unfair Dismissal 2026-07-03 · Case result: Dismissed Summary of key issues: The worker’s misconduct was acknowledged as grounds for discipline, and the worker, as the direct perpetrator of the misconduct, bore the heaviest responsibility for the unauthorized sale of goods, arbitrary retention of the sale proceeds, use of subsidies for non-designated purposes, and false reporting. It was confirmed that the decision whether to mitigate the disciplinary measure in light of the worker’s merits is a matter within the discretion of the Personnel Committee. The Personnel Committee comprehensively deliberated on equity, possible excessiveness of the disciplinary level, mitigation based on commendations, and the seriousness of the matter, and unanimously concluded that demotion was appropriate. All committee members… 1. Legal Implications Ⅰ. Case Overview This case concerns a labor commission dispute over unfair dismissal (discipline) arising from disciplinary action imposed on a worker who, at the workplace, engaged in misconduct by selling goods without authorization, arbitrarily retaining the sale proceeds, using subsidies for purposes other than those designated, and submitting false reports. The worker filed an application with the Labor Relations Commission for a remedy, claiming that the demotion imposed on him/her was so excessive in terms of disciplinary severity that it effectively amounted to unfair dismissal. The legitimacy of the disciplinary action was contested before the Jeonnam Regional Labor Relations Commission. Ⅱ. Summary of Issues The issue in this case is: “In a situation where multiple acts of misconduct by the worker—such as unauthorized sale of goods, use of subsidies for non-designated purposes, and false reporting—are acknowledged, does the demotion decided by the Personnel Committee constitute an abuse of disciplinary discretion in terms of disciplinary severity that is manifestly unreasonable by social standards?” Ⅲ. Summary of the Labor Relations Commission’s Reasoning The adjudicating panel in this case noted that all of the worker’s acts of misconduct constituted grounds for discipline; that the worker, in the course of the unauthorized sale of goods, arbitrary retention of the sale proceeds, use of subsidies for non-designated purposes, and false reporting, was the direct perpetrator and in a position bearing the heaviest responsibility; that whether to mitigate discipline in light of the worker’s merits or commendations is stipulated as a matter within the discretion of the Personnel Committee; that the Personnel Committee in fact conducted a comprehensive deliberation on equity, possible excessiveness of the disciplinary level, the possibility of mitigation based on commendations, and the seriousness of the matter, and unanimously concluded that demotion was appropriate; and that there were no defects in the disciplinary procedures. In light of the above, the Commission held that the dismissal in this case—more precisely, the disciplinary measure of demotion—could not be regarded as having lost its validity to a degree that is manifestly unacceptable by social standards, nor could it be viewed as an abuse of the employer’s discretionary disciplinary authority. Ultimately, the Labor Relations Commission dismissed the worker’s application for a remedy for unfair dismissal (unfair discipline). Ⅳ. Practical Points (From the Worker’s Perspective) Where grounds for discipline are acknowledged with respect to a worker, it must be borne in mind that, even if the level of discipline feels somewhat severe, the Labor Relations Commission will determine the unlawfulness of the disciplinary severity only against the high threshold of whether it is “manifestly unreasonable by social standards.” In particular, acts such as unauthorized sale of goods, use of company funds or subsidies for non-designated purposes, and false reporting are evaluated as misconduct that seriously undermines corporate order and the relationship of trust. The higher and more direct the worker’s role in handling and managing such tasks, the heavier the responsibility and the more severe the discipline that may be recognized. In addition, if there are mitigating factors in the disciplinary process—such as the worker’s merits, efforts to remedy the damage, the incidental or unintentional nature of the misconduct, the employer’s instructions, or structural problems—these should be actively substantiated with concrete facts and supporting materials before the Personnel Committee or the Labor Relations Commission. Ⅴ. Practical Points (From the Employer/Company Perspective) From the employer’s perspective, while broad discretion in setting the level of discipline is recognized, this is premised on clear proof of the misconduct and the securing of procedural fairness. At the Personnel Committee stage, it is important to systematically organize and deliberate on the nature, frequency, and motive of the misconduct; the worker’s position and scope of responsibility; the public nature of the company’s business; the worker’s past record of commendations and discipline; and whether the damage has been remedied. It is also important to document the considerations of equity and the criteria for disciplinary severity in minutes or other written records. Furthermore, if internal rules provide for possible mitigation of discipline based on merits or commendations, it is advisable to clearly record whether and how such mitigation was examined and applied in the actual case, so that, before the Labor Relations Commission, it does not become an issue whether the discretion was exercised arbitrarily or in a discriminatory manner. In this type of disciplinary case, by obtaining advice from a specialized labor law firm such as Labor Law Firm Law&, and by reviewing in advance the organization of disciplinary grounds, the setting of disciplinary severity standards, and strategies for responding before the Labor Relations Commission, employers can significantly reduce the risk of disputes over unfair dismissal or discipline. 2. Matters Adjudicated a. Case Overview and Procedural History The worker’s misconduct was acknowledged as grounds for discipline, and the worker, as the direct perpetrator of the misconduct, was in a position bearing the heaviest responsibility for the unauthorized sale of goods, arbitrary retention of the sale proceeds, use of subsidies for non-designated purposes, and false reporting. It was confirmed that the decision whether to mitigate the disciplinary severity in light of the worker’s merits is a matter within the discretion of the Personnel Committee. The Personnel Committee comprehensively deliberated on equity, possible excessiveness of the disciplinary level, mitigation based on commendations, and the seriousness of the matter, and unanimously concluded that demotion was appropriate. There were no defects in the disciplinary procedures. In light of these circumstances, the demotion imposed by the employer on the worker cannot, by social standards, be regarded as manifestly… 3. Summary of the Decision a. Summary of the Labor Relations Commission’s Reasoning The worker’s misconduct was acknowledged as grounds for discipline, and the worker, as the direct perpetrator of the misconduct, was in a position bearing the heaviest responsibility for the unauthorized sale of goods, arbitrary retention of the sale proceeds, use of subsidies for non-designated purposes, and false reporting. It was confirmed that the decision whether to mitigate the disciplinary severity in light of the worker’s merits is a matter within the discretion of the Personnel Committee. The Personnel Committee comprehensively deliberated on equity, possible excessiveness of the disciplinary level, mitigation based on commendations, and the seriousness of the matter, and unanimously concluded that demotion was appropriate. There were no defects in the disciplinary procedures. In light of these circumstances, the demotion imposed by the employer on the worker cannot, by social standards, be regarded as manifestly… / [See More Related Decisions] - “Unfair Dismissal Decision Concerning ‘Disciplinary Severity (Removal of Company Data via USB)’” - “Unfair Dismissal Decision Concerning ‘Dismissal of Application (Non-Appearance at Hearing)’” – Date of decision: – Case number: Dismissed - “Unfair Dismissal Decision Concerning ‘Non-Satisfaction of Requirements for Redundancy Dismissal (Workout Company)’” [Tags] Unfair dismissal, disciplinary severity (unauthorized sale of goods · misuse of subsidies), 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 the “Unfair Dismissal Decisions” series by Labor Law Firm Law&. ※ You can view the previous article, “Unfair Dismissal Decision Concerning ‘Disciplinary Severity (Removal of Company Data via USB)’,” in a new window. ※ The list of decisions related to disciplinary severity (unauthorized sale of goods · misuse of subsidies) can be viewed together under “List of Decisions Related to Disciplinary Severity (Unauthorized Sale of Goods · Misuse of Subsidies).” ※ Korean version of this case: Korean article