[Case Information] This case is a decision in which the employer ultimately prevailed (application dismissed) on the issue of “disciplinary sanctions (unauthorized sale of goods · misuse of subsidies).” Decision date: 2026-07-03 · Decision body: Jeonnam Regional Labor Relations Commission · Case No.: 2026Buhae471 Key issue summary: The employee’s misconduct was recognized as a ground for discipline, and the employee, 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 purposes other than those intended, and false reporting. It was confirmed that whether to mitigate the level of discipline in light of the employee’s merits falls within the discretion of the Personnel Committee, and that the Personnel Committee, after comprehensively deliberating on fairness, whether the sanction was excessive, the possibility of mitigation based on commendations, and the seriousness of the matter, unanimously… 1. Legal Implications In this unfair dismissal case, the main issue before the Labor Relations Commission was whether the employer’s disciplinary demotion was socially acceptable and thus justified. This is a decision on disciplinary sanctions summarized by Labor Law Firm Law&. In Jeonnam Regional Labor Relations Commission Case No. 2026Buhae471, the question was whether the demotion imposed for the employee’s misconduct constituted an abuse of the employer’s disciplinary authority. Ⅰ. Case Overview The employee was disciplined for misconduct consisting of the unauthorized sale of company goods, arbitrary retention of the sale proceeds, use of subsidies for purposes other than those intended, and false reporting. The employer, after review by the Personnel Committee, imposed a demotion. The employee filed an application for relief from unfair dismissal (unfair discipline), arguing that the grounds for discipline were unfounded, that the level of discipline was excessive, and that there were procedural defects in the disciplinary process. Ⅱ. Issues The issues in this case were: “Given that the employee’s misconduct—unauthorized sale of goods and use of subsidies for purposes other than those intended, coupled with false reporting—is established, does the demotion decided by the Personnel Committee constitute a level of discipline that is, by social standards, manifestly unreasonable? Further, are there any serious defects in the disciplinary procedure?” Ⅲ. Summary of the Labor Relations Commission’s Reasoning The panel in this case noted that the employee was the direct perpetrator of the misconduct and in a position bearing the heaviest responsibility, having engaged in unauthorized sale of goods, arbitrary retention of the sale proceeds, use of subsidies for purposes other than those intended, and false reporting. It also found that whether to mitigate the disciplinary sanction in light of the employee’s merits falls within the discretion of the Personnel Committee. The Personnel Committee had, after comprehensively deliberating on fairness, whether the sanction was excessive, the possibility of mitigation based on commendations, and the seriousness of the matter, unanimously concluded that demotion was appropriate. No particular defects were found in the disciplinary procedure. In light of the above, the Commission held that the dismissal in this case was based on valid grounds for discipline, that the level of discipline could not be regarded as having, by social standards, manifestly lost its reasonableness, and that the disciplinary procedure had been lawfully conducted. In determining whether a disciplinary measure has, by social standards, manifestly lost its reasonableness, the Labor Relations Commission directly applied the Supreme Court’s jurisprudence that requires comprehensive consideration of: the nature of the duties, the content and character of the misconduct, the purpose of maintaining workplace discipline through the sanction, the impact on corporate order, the employee’s past work attitude, internal standards for disciplinary sanctions, and consistency with other cases. In particular, it reaffirmed that, absent special circumstances such as the disciplinary standards set by the employer being entirely irrational or designed as a tool targeting a specific employee, it is difficult to find an abuse of discretion solely on the ground that the sanction is severe. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, it should be borne in mind that misconduct that seriously undermines trust—such as unauthorized sale of goods, use of company funds or subsidies for purposes other than those intended, and false reporting—can constitute serious grounds for discipline up to and including dismissal. To challenge a sanction as excessive, it is important not merely to assert that “the sanction is too severe,” but to systematically organize and submit to the Labor Relations Commission specific mitigating factors such as the circumstances surrounding the misconduct, whether any damage has been remedied, past merits and work attitude, and consistency with similar cases. Ⅴ. Practical Points (From the Employer’s Perspective) From the employer’s side, it is necessary to clearly link the grounds for discipline to the rules of employment, collective agreements, and similar sources, and to keep detailed records—such as minutes—of the Personnel (Disciplinary) Committee’s deliberations on the sanctioning standards, fairness, whether to mitigate in light of merits, and the seriousness of the matter. In addition, faithfully observing procedural fairness—such as proper composition of the disciplinary committee, prior notice, and providing an opportunity to be heard—will increase the likelihood that both the level of discipline and the procedure will be found justified at the Labor Relations Commission stage. 2. Matters Decided a. Case Overview and Procedural History A case in which it was held that the grounds for discipline were established, the level of discipline was appropriate, and there were no defects in the disciplinary procedure, so that the disciplinary measure was justified. 3. Summary of the Decision a. Summary of the Labor Relations Commission’s Reasoning The employee’s misconduct was recognized as a ground for discipline, and the employee, 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 purposes other than those intended, and false reporting. It was confirmed that the decision whether to mitigate the level of discipline in light of the employee’s merits falls within the discretion of the Personnel Committee. The Personnel Committee, after comprehensively deliberating on fairness, whether the sanction was excessive, mitigation based on commendations, and the seriousness of the matter, unanimously concluded that demotion was appropriate. There were no procedural defects in the disciplinary process. In light of these factors, the demotion imposed by the employer on the employee cannot be regarded as, by social standards, having manifestly lost its reasonableness or as an abuse of the discretionary disciplinary authority granted to the employer. [See More Related Decisions] - ‘Disciplinary Sanctions Excessive (Negligent Management/Supervision)’ Unfair Dismissal Decision - ‘Disciplinary Sanctions (Participation in Services for Another Institution)’ Unfair Dismissal Decision - ‘Business Necessity (Reassignment of Cleaning Staff)’ Unfair Dismissal Decision [Tags] Unfair dismissal, disciplinary sanctions (unauthorized sale of goods · misuse of subsidies), 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 Decisions” series. ※ You can view the previous article, “‘Disciplinary Sanctions (Removal of Company Data via USB)’ Unfair Dismissal Decision,” in a new window. ※ The list of decisions related to disciplinary sanctions (unauthorized sale of goods · misuse of subsidies) can be viewed together in the “List of Decisions Related to Disciplinary Sanctions (Unauthorized Sale of Goods · Misuse of Subsidies).” ※ Korean version of this case: Korean article