[Case Information] This case is a decision in which the employee prevailed in full on the issue of “excessive disciplinary measure (computer processing of medical fee refunds).” Decision date: 2026-07-01 · Decision body: Seoul Regional Labor Relations Commission · Case No.: 2026Buhae1432 Key issue summary: A. Legitimacy of the grounds for discipline The employee violated company rules by not paying medical fee refunds to patients, instead entering them into the computer system as if paid, and then keeping the refund amounts or using them to offset other patients’ outstanding balances. Accordingly, the grounds for discipline were found to exist. B. Appropriateness of the level of discipline (1) It was recognized that, under the former computer system, it was difficult to accurately enter the details of deposited refund amounts, and that there were no violations in the handling of refunds after the introduction of the new system; (2) The employee kept the refund amounts but appears to have used them mainly to offset emergency patients’ outstanding balances for the employer’s benefit, and there was little indication of personal use; (3) The employee returned to the employer the full amount of refunds that had been entered in the system and not deleted; (4) The wage loss resulting from the one‑month suspension, a serious disciplinary measure, was KRW 6,196,730, which was excessive compared to the amount actually misused. In light of all these factors, the one‑month suspension was found to be excessive. 1. Legal Implications This unfair dismissal case concerns a dispute over the level of discipline heard by the Seoul Regional Labor Relations Commission. The Commission recognized the legitimacy of both the grounds and the procedure for discipline, but found only the level of discipline to be excessive. The case involved a medical institution where medical fee refunds were processed in the computer system as if paid, while in reality the amounts were kept or used to offset other patients’ outstanding balances. This is a type of case that Labor Law Firm Law& frequently advises on, and is therefore of considerable practical significance. Ⅰ. Case Overview The employee, who was in charge of handling medical fee refunds at a medical institution, did not immediately pay the refund amounts to patients. Instead, the employee entered them into the computer system as if paid, then kept the refund amounts separately or used them to offset other patients’ outstanding balances. The employer regarded this as a violation of company rules and imposed a one‑month suspension. The employee, claiming that both the grounds and the level of discipline were excessive, filed an application with the Labor Relations Commission for relief from unfair dismissal (discipline). Ⅱ. Issues in Dispute The issues in this case were whether the act of not actually paying the refund amounts to patients, but instead processing them as paid in the computer system and then keeping them or using them to offset other outstanding balances, constituted grounds for discipline, and, if so, whether a one‑month suspension was, in light of social norms, excessively severe. Ⅲ. Summary of the Labor Relations Commission’s Findings The panel in this case found that the employee failed to handle the refund amounts in accordance with proper procedures under the employer’s rules, and that the employee kept the refund amounts after processing them as paid in the computer system or used them to offset other patients’ outstanding balances. On this basis, the panel held that the grounds for discipline themselves were established. The panel also found that the disciplinary procedures prescribed in the work rules had been observed, and that the grounds for discipline had been specified during the investigation stage and in the notice requiring the employee to appear before the disciplinary committee, thereby affording the employee a substantive opportunity to explain. Accordingly, the panel held that there was no defect in the disciplinary procedure. The panel further noted that there were circumstances under which it was difficult to accurately enter the details of deposited refund amounts in the former computer system, and that there had been no further violations in the handling of refunds after the introduction of the new system. It also found that the refund amounts kept by the employee appeared to have been used mainly for the employer’s benefit, such as to offset emergency patients’ outstanding balances, and that there was little indication of personal consumption; that the employee returned to the employer the full amount of refunds that had been entered in the system and not deleted; and that the wage loss resulting from the one‑month suspension, KRW 6,196,730, was excessive compared to the amount actually misused. In light of all these factors, the panel held that, although the grounds and procedure for discipline were legitimate, the one‑month suspension was so excessive as to violate the principle of proportionality, and was therefore unfair. Under established case law, an employer’s disciplinary authority must be reasonable in terms not only of the grounds and procedure for discipline, but also of the level of discipline in light of social norms. Where the level of discipline is markedly excessive, considering the nature, degree, and repetition of the misconduct, its impact on workplace order, internal disciplinary standards, and the regulatory purpose sought to be achieved by discipline, it is deemed an abuse of the employer’s discretionary power in imposing discipline. In this case as well, although the method of handling the refund amounts violated the rules, the one‑month suspension was evaluated as an unduly severe sanction that was out of balance with social norms, given the recovery of the actual loss, the employee’s subjective motive and use for the employer’s benefit, and the structural limitations of the system. Ⅳ. Practical Points (Employee Perspective) From the employee’s perspective, it must be clearly recognized that conduct in violation of company rules can constitute grounds for discipline even if it is undertaken with a good‑faith intention to “benefit the company.” However, if the level of discipline is considered excessive, the employee may, as in this case, actively argue before the Labor Relations Commission the unfairness of the disciplinary measure by emphasizing favorable circumstances for mitigation, such as full return of the refund amounts, absence of personal use, system limitations, and the purpose of using the funds for the employer’s benefit. In particular, disciplinary measures such as suspension and pay reduction also fall under “dismissal and other disciplinary action” under the Labor Standards Act, so employees should remember that they may challenge not only the legitimacy of the grounds for discipline and compliance with procedures, but also the proportionality of the level of discipline. In similar disputes, it is important to secure as much objective evidence as possible regarding the structure of the computer system at the time of discipline, prevailing practices, and whether there were instructions from superiors. Ⅴ. Practical Points (Employer/Company Perspective) From the employer’s perspective, even where the grounds for discipline are clear and the disciplinary procedures have been lawfully carried out, if the level of discipline is excessive in light of the nature of the misconduct and the scale of the loss, the Labor Relations Commission or the courts may find an abuse of disciplinary discretion. Even in cases involving monetary violations such as refunds or cash on hand, it is necessary to determine a level of discipline consistent with the principle of proportionality, taking into account the actual amount of loss, whether it has been recovered, the employee’s purpose in using the funds, structural limitations of the system, and the employee’s past work attitude. In addition, if there is a risk that violations of rules may be repeated due to unreasonable aspects of the computer system or work processes, efforts should be made to reduce the likelihood of recurrence through institutional and system improvements and training before resorting to discipline. When preparing disciplinary guidelines, employers should reflect similar cases and trends in case law to avoid having disciplinary measures evaluated as excessive, and should record in detail in the minutes of the disciplinary committee the reasons for selecting a particular level of discipline. 2. Matters Decided A. Case Overview and Procedural History This is a case in which the grounds for discipline were recognized and the disciplinary procedures were lawful, but the level of discipline was found to be excessive in relation to the grounds for discipline and therefore unfair. 3. Summary of Decision A. Summary of the Labor Relations Commission’s Findings a. Legitimacy of the Grounds for Discipline The grounds for discipline were recognized because the employee violated company rules by not paying medical fee refunds to patients, instead entering them into the computer system as if paid, and then keeping the refund amounts or using them to offset other patients’ outstanding balances. b. Appropriateness of the Level of Discipline (1) It was recognized that, under the former computer system, it was difficult to enter the details of deposited refund amounts, and that there had been no violations in the handling of refunds after the introduction of the new computer system; (2) The refund amounts kept by the employee appear to have been used for the employer’s benefit, such as to offset emergency patients’ outstanding balances, and it is difficult to find evidence of personal consumption; (3) The employee returned to the employer the full amount of refunds that had been entered in the computer system and not deleted; (4) Considering that the wage loss resulting from the serious disciplinary measure of suspension was KRW 6,196,730, which was excessive compared to the refund amounts misused by the employee, the one‑month suspension was excessive. c. Legitimacy of the Disciplinary Procedure The disciplinary procedures prescribed in the work rules were observed, and the grounds for discipline were specified during the investigation stage and in the notice requiring the employee to appear before the disciplinary committee, thereby providing the employee with a substantive and sufficient opportunity to explain. Accordingly, there was no defect in the disciplinary procedure. [See More Related Decisions] - “Unfair Dismissal Decision on ‘Disciplinary Measure (Participation in Services for Another Institution)’” - “Unfair Dismissal Decision on ‘Excessive Disciplinary Measure (Negligent Management/Supervision)’” - “Unfair Dismissal Decision on ‘Legitimate Expectation of Employment Succession (Competitive Bidding for Logistics Center)’” [Tags] Unfair dismissal, excessive disciplinary measure (computer processing of medical fee refunds), disciplinary dismissal (level of discipline), 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 ‘Other Disciplinary Action (Warning in Group Chat Room)’,” in a new window. ※ A list of decisions related to excessive disciplinary measure (computer processing of medical fee refunds) can be found under “List of Decisions on Excessive Disciplinary Measure (Computer Processing of Medical Fee Refunds).” ※ Korean version of this case: Korean article