[Case Information] This case concerns an “ordinary dismissal (conversion of an insolvent financial institution into a bridge insurance company)” in which the employer ultimately prevailed (claim dismissed). Decision date: 2026-08-05 · Decision body: Seoul Regional Labor Relations Commission · Case No.: 2026BuHae1918 Key issue summary: (a) 1. Legal Implications Ⅰ. Case Overview This unfair dismissal case concerns a situation in which an insurance company designated as an insolvent financial institution dismissed employees in the course of effectively winding up its business. The Seoul Regional Labor Relations Commission rendered its decision in Case No. 2026BuHae1918. Taking into account the course of agreements among the Korea Deposit Insurance Corporation (KDIC), the bridge insurance company, and the labor union, as well as the method of serving dismissal notices, the Labor Relations Commission viewed this as a case that allows the issues of collective redundancy (mass redundancy) and ordinary dismissal, which Labor Law Firm Law& frequently handles, to be revisited and整理ed. Ⅱ. Issues The issue in this case is whether the dismissal of employees in the course of effectively closing the business after the company was designated as an insolvent financial institution constitutes an ordinary dismissal rather than a collective redundancy under the Labor Standards Act, and whether such dismissal is justified. Ⅲ. Summary of the Labor Relations Commission’s Findings The panel in this case found that, after the employer was designated as an insolvent financial institution, the KDIC and the company’s labor union agreed that only a portion of the workforce would be succeeded by the bridge insurance company and that employment relationships with the remaining employees would be terminated; that, pursuant to the Financial Services Commission’s “decision on transfer of contracts and suspension of business,” all insurance contracts were transferred to the bridge insurance company and the business was effectively closed; and that most employees left the company in the form of voluntary resignation. In light of these circumstances, the Commission held that this was not a collective redundancy premised on the continued existence of the company and a restructuring of personnel, but rather an ordinary dismissal due to business closure. Furthermore, the Commission found that the employer had grounds for dismissal because, as a result of the designation as an insolvent financial institution and the disposition ordering transfer of contracts and suspension of business, it had no choice but to proceed with bankruptcy; that the employer made sufficient efforts to serve the dismissal notice by sending the advance dismissal notice via email, registered mail, and KakaoTalk message; and that the employee was already aware of the contents of the agreement between the KDIC and the labor union. On this basis, the Commission held that the dismissal in this case was justified in both procedure and substance. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, when a company is designated as an insolvent financial institution and its business is effectively closed, it may be difficult to rely on the usual requirements for a collective redundancy (urgent managerial necessity, efforts to avoid dismissal, fair selection criteria, 50-day prior notice and consultation, etc.) in the same way. However, even where the dismissal is characterized as an ordinary dismissal, employees may still contest the existence of grounds for dismissal, whether the dismissal notice was duly served, and the clarity of the contents of the notice. Accordingly, it is important to carefully整理 when and how any notice was given, what means of communication were used, and when and how the employee became aware of the relevant agreements. Ⅴ. Practical Points (From the Employer’s Perspective) From the employer’s perspective, even in situations of bankruptcy or business closure, the employer is not completely free from the statutory obligations regarding dismissal notice and the requirement of just cause under the Labor Standards Act. In particular, even if the dismissal is evaluated as an ordinary dismissal, the circumstances leading to business closure, the contents of agreements with the financial authorities, the KDIC, and the labor union, and the method and timing of dismissal notices must be clearly documented in writing in order to reduce unfair dismissal disputes before the Labor Relations Commission. In cases such as this one, where administrative dispositions by the Financial Services Commission and agreements with the KDIC and the labor union form the background to the dismissal, employers should systematically retain the relevant documents, minutes of meetings, and notices provided to employees. 2. Matters Decided A. Case Overview and Procedural History This is a case in which the employer, having been designated as an insolvent financial institution and proceeding toward business closure, was found to have carried out an ordinary dismissal, and the dismissal was held to be justified. 3. Summary of the Decision A. Summary of the Labor Relations Commission’s Findings a. Whether the dismissal constitutes an ordinary dismissal (1) The company was designated as an insolvent financial institution, and the KDIC and the company’s labor union, among others, agreed that the bridge insurance company would hire only some of the existing employees and that the employment relationships with the remaining employees would be terminated; (2) pursuant to the Financial Services Commission’s disposition of “decision on transfer of contracts and suspension of business,” all insurance contracts were transferred to the bridge insurance company, and all employees except one person other than the employees resigned voluntarily. In light of these circumstances, the dismissal constitutes an ordinary dismissal due to business closure, not a managerial (economic) dismissal premised on the continuation and maintenance of the company. b. Whether the dismissal is justified (1) The employer was designated as an insolvent financial institution and, having received from the Financial Services Commission a disposition ordering transfer of contracts and suspension of business, was undergoing bankruptcy proceedings, so there were grounds for dismissal; (2) the employer sent the advance dismissal notice via email, registered mail, and KakaoTalk message; (3) the employee was aware of the contents of the agreement between the KDIC and the labor union, so the mere fact that the employee did not receive the registered mail cannot, by itself, negate the effectiveness of the dismissal notice. In light of these circumstances, the dismissal is justified. [See More Related Decisions] - “Unfair Dismissal Decision on ‘Relief Interest · Refusal to Rehire (Post-Retirement Fixed-Term Employee)’” - “Unfair Dismissal Decision on ‘Excessive Disciplinary Measure (Negligent Management and Supervision)’” - “Unfair Dismissal Decision on ‘Disciplinary Measure (Participation in Outsourced Work for Another Institution)’” [Tags] Unfair dismissal, ordinary dismissal (conversion of an insolvent financial institution into a bridge insurance company), restructuring, 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 ‘Limitation on Application of the Law (Fewer Than Five Regular Employees)’,” in a new window. ※ A list of decisions related to ordinary dismissal (conversion of an insolvent financial institution into a bridge insurance company) can be viewed under “List of Decisions Related to Ordinary Dismissal (Conversion of an Insolvent Financial Institution into a Bridge Insurance Company).” ※ Korean version of this case: Korean article