This case concerns an unfair dismissal decision on the issue of “scope of relief (differences in performance-based bonuses due to performance appraisal),” in which the employer ultimately prevailed (application dismissed). Decision Body: Gyeonggi Regional Labor Relations Commission Case No. 2026부해2179 – ○ ○ ○ Application for Relief from Unfair Dismissal Decision date: 2026-08-03 · Result: Dismissed Key Issue Summary: In light of the fact that performance appraisal falls within the employer’s inherent authority as the holder of personnel management powers, and that the employer is accorded broad discretion in setting evaluation criteria and allocating scores; and although the appraisal results may lead to disadvantages in the amount of performance-based bonuses and the rate of wage increases, such consequences clearly do not constitute dismissal, suspension from work, disciplinary suspension, or transfer under the plain meaning of those terms, nor are they disadvantageous measures imposed as a sanction on the employee. Accordingly, they do not fall under “other disciplinary action” as set out in Article 23 of the Labor Standards Act… 1. Legal Implications Ⅰ. Case Overview In this unfair dismissal case, the employee filed an application for relief with the Labor Relations Commission, asserting that, due to the performance appraisal imposed on him, he suffered disadvantages in the amount of performance-based bonuses and in his wage increase rate. The Gyeonggi Regional Labor Relations Commission examined, in particular, whether the performance appraisal itself and the resulting differential treatment in bonuses and wage increases fall within the scope of matters for which relief may be sought under Articles 23 and 28 of the Labor Standards Act. Ⅱ. Summary of Issues The issue in this case is: “Where an employee suffers disadvantages in performance-based bonuses and wage increase rates as a result of the employer’s performance appraisal, does this constitute ‘dismissal, suspension from work, disciplinary suspension, transfer, wage reduction, or other disciplinary action’ under Article 23(1) of the Labor Standards Act, such that the employee may file an application with the Labor Relations Commission for relief from unfair dismissal (unfair personnel action)?” Ⅲ. Summary of the Labor Relations Commission’s Decision The panel in this case held that performance appraisal is part of the employer’s inherent authority as the holder of personnel management powers, and that the employer enjoys broad discretion in setting evaluation criteria and allocating scores. While the appraisal results may lead to differences in performance-based bonuses and wage increase rates, such consequences do not constitute dismissal, suspension from work, disciplinary suspension, or transfer. Furthermore, as they are not disadvantageous measures imposed as a sanction for the employee’s past misconduct, they do not fall under “other disciplinary action” within the meaning of Article 23 of the Labor Standards Act. Accordingly, the panel found that the performance appraisal at issue and the resulting differences in performance-based bonuses and wage increases could not be regarded as personnel measures such as unfair dismissal that are subject to applications for relief to the Labor Relations Commission. On this basis, the panel determined that no “dismissal” existed in this case and dismissed the employee’s application for relief on the ground that it did not concern a matter subject to relief for unfair dismissal or similar personnel measures. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, it should be noted that the performance appraisal result itself, or the resulting differences in performance-based bonuses and wage increase rates, do not automatically constitute grounds for filing an application for relief from unfair dismissal with the Labor Relations Commission. While there may be room for judicial review where a performance appraisal violates the Constitution or the Labor Standards Act, or is markedly lacking in objectivity and fairness, in such cases the general principle is to pursue separate judicial procedures, such as civil litigation. Ⅴ. Practical Points (From the Employer’s/Company’s Perspective) From the employer’s perspective, it is useful to keep in mind that performance appraisal, in principle, falls within a broad area of managerial discretion and is not regarded as “other disciplinary action” that is subject to applications for relief to the Labor Relations Commission. At the same time, employers should make efforts to clarify evaluation criteria in advance and to operate the system in an objective and fair manner. If a performance appraisal system is in effect abused as a means of avoiding collective redundancies or coercing employees to resign, its validity may be denied upon judicial review. Employers should therefore ensure that the purpose, criteria, and operating procedures of the appraisal system are organized and implemented in a transparent manner. 2. Matters Decided A. Case Overview and Procedural History The Commission found that performance appraisal is part of the employer’s inherent authority as the holder of personnel management powers, and that the employer is accorded broad discretion in setting evaluation criteria and allocating scores. Although the appraisal may result in disadvantages such as differences in the amount of performance-based bonuses and wage increase rates, it is clear from the plain meaning of the terms that such consequences do not constitute dismissal, suspension from work, disciplinary suspension, or transfer, nor are they disadvantageous measures imposed as a sanction on the employee. Therefore, they do not fall under “other disciplinary action” pursuant to Article 23 of the Labor Standards Act, and are not subject to applications for relief to the Labor Relations Commission. 3. Summary of Decision A. Summary of the Labor Relations Commission’s Reasoning The Commission held that performance appraisal is part of the employer’s inherent authority as the holder of personnel management powers, and that the employer is accorded broad discretion in setting evaluation criteria and allocating scores. Although the appraisal may result in disadvantages such as differences in the amount of performance-based bonuses and wage increase rates, it is clear from the plain meaning of the terms that such consequences do not constitute dismissal, suspension from work, disciplinary suspension, or transfer, nor are they disadvantageous measures imposed as a sanction on the employee. Therefore, they do not fall under “other disciplinary action” pursuant to Article 23 of the Labor Standards Act, and are not subject to applications for relief to the Labor Relations Commission. / [More Related Decisions] - “Unfair Dismissal Decision on ‘Order to Suspend Business (Failure to Pay 30% of Average Wages)’” - “Unfair Dismissal Decision on ‘Expression of Intent to Resign (Handwritten Recommended Resignation)’” - “Unfair Dismissal Decision on ‘Dismissal of Application (Failure to Appear at Hearing)’” – Decision date: – Case No.: Dismissed [Tags] Unfair dismissal, scope of relief (differences in performance-based bonuses due to performance appraisal), performance appraisal·poor performance, 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. ※ The previous article, “Unfair Dismissal Decision on ‘Expression of Intent to Resign (Handwritten Recommended Resignation)’,” can be viewed in a new window. ※ The list of decisions related to scope of relief (differences in performance-based bonuses due to performance appraisal) can be viewed together in the “Scope of Relief (Differences in Performance-Based Bonuses Due to Performance Appraisal)–Related Decisions” section. ※ Korean version of this case: Korean article