[Case Information] This case is a decision in which the employer prevailed (application dismissed) on the issue of “legitimacy of reassignment (reduction of overseas sales).” Date of decision: 2026-07-31 · Labor Relations Commission: Seoul Regional Labor Relations Commission · Case No.: 2026BuHae1887 Key issue summary: (a) 1. Legal Implications Ⅰ. Case Overview In this case, the employer issued a reassignment (transfer) order to an employee in charge of overseas sales, assigning the employee to another domestic department, and subsequently froze the employee’s annual salary. These measures were challenged before the Labor Relations Commission by way of an application for relief from unfair dismissal and unfair personnel action. The Seoul Regional Labor Relations Commission examined separately (i) the legitimacy of the reassignment and (ii) the legal nature of the salary freeze, and held that the reassignment was legitimate and that the salary freeze did not fall within the scope of remedial orders the Commission may issue. Accordingly, the employer prevailed. Ⅱ. Summary of Issues The issues in this case are: “Where the employment contract contains a provision authorizing reassignment and the overseas sales department is reassigned because its continued existence has no business significance, can the legitimacy of the reassignment be denied solely on the ground that no separate consultation procedure was conducted with the employee? Further, does a salary freeze based on performance evaluation results constitute ‘other disciplinary action’ under Article 23(1) of the Labor Standards Act and thus fall within the scope of remedial orders by the Labor Relations Commission?” Ⅲ. Summary of the Labor Relations Commission’s Findings The panel in this case found that: the employer had included in the employment contract a clause authorizing changes in workplace and duties; despite long-term investment in overseas sales, no meaningful sales had been realized, leading the employer to conclude that maintaining the department did not contribute to business operations; after reassignment, there was no substantial change in working conditions and thus no significant disadvantage in the employee’s daily life; and a similar reassignment had occurred in 2021. In light of these circumstances, the Commission held that the business necessity and reasonableness of the reassignment were established. On this basis, the Commission held that, even though no separate consultation procedure was conducted with the individual employee, the measure fell within the scope of the employer’s managerial discretion grounded in the employment contract, and its legitimacy could not easily be denied. With respect to the salary freeze, the Commission held that the annual salary had been determined based on evaluation results in accordance with the standards set forth in the personnel regulations, and therefore it was difficult to view the measure as a disadvantageous disposition imposed as a sanction on the employee. Accordingly, it did not constitute “other disciplinary action” under Article 23(1) of the Labor Standards Act and thus did not fall within the scope of remedial orders by the Labor Relations Commission. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, to challenge a reassignment/transfer as an unfair personnel measure, it is necessary not only to point out the absence of a consultation procedure, but also to specifically organize and present arguments as to whether there was insufficient business necessity for the reassignment and whether the reassignment caused a level of disadvantage in daily life—such as in wages, benefits, commuting, etc.—that is ordinarily difficult to endure. In addition, whether a salary freeze has a punitive character, or is instead part of a compensation decision based on performance evaluation, will affect the possibility of seeking relief before the Labor Relations Commission. It is therefore important to carefully obtain and organize the personnel regulations, evaluation results, and explanatory materials provided by the company. Ⅴ. Practical Points (From the Employer’s Perspective) From the employer’s perspective, when planning a reassignment/transfer, it is advisable to clearly set out in the employment contract and rules of employment the grounds for changes in workplace and duties, and, at the time of implementation, to prepare documentation that can objectively explain the business or personnel management necessity and the extent of changes in working conditions after reassignment. Furthermore, if salary freezes or differentiated salary increases are to be operated as part of an “evaluation and compensation system” rather than as disciplinary measures, the evaluation criteria and procedures should be specifically stipulated in the personnel regulations, and discipline and evaluation should be clearly distinguished and applied consistently in both documentation and practice. To prevail in this type of case, it is important to fully understand the case law principles on business necessity for reassignment/transfer and on disadvantages in daily life, and to design and organize the facts in advance so that they align with those principles and can be presented persuasively in the Labor Relations Commission proceedings. Consulting in advance with a specialized HR and labor institution such as Labor Law Firm Law& to review reassignment and evaluation systems can be of substantial help in preventing disputes over unfair dismissal and unfair personnel measures. 2. Matters Decided A. Case Overview and Procedural History This is a case in which the Commission held that the legitimacy of a reassignment cannot be denied merely because no consultation procedure was conducted, and that the reassignment was legitimate because business necessity was recognized and the disadvantage in daily life was not significant, and further held that the salary freeze did not fall within the scope of remedial orders by the Labor Relations Commission. 3. Gist of the Decision A. Summary of the Labor Relations Commission’s Findings a. Legitimacy of the Reassignment Given that the employment contract contained grounds for changes in workplace and duties; that the employer had invested in overseas sales for a long period but, as no meaningful sales had been realized, determined that maintaining overseas sales did not contribute to business operations; that there was no substantial change in working conditions and thus no significant disadvantage in the employee’s daily life; and that the disposition was made pursuant to the employer’s managerial discretion under the employment contract and a similar situation had occurred in 2021, the business necessity of the reassignment is recognized and the disadvantage in daily life is not significant. Therefore, the legitimacy of the reassignment cannot be denied merely because no consultation procedure was conducted, and the reassignment is legitimate. b. Whether the Salary Freeze Is Subject to a Remedial Order The salary freeze was based on evaluation results in accordance with the standards set forth in the personnel regulations, and the annual salary was determined on that basis. It is therefore difficult to regard the measure as a disadvantageous disposition imposed as a sanction on the employee, and it does not constitute “other disciplinary action” under Article 23(1) of the Labor Standards Act. [See More Related Decisions] - “Unfair Dismissal Case on ‘Business Necessity (Reassignment of Cleaner)’” - “Unfair Dismissal Case on ‘Interest in Relief / Refusal to Re-employ (Post-Retirement Fixed-Term Employment)’” - “Unfair Dismissal Case on ‘Excessive Severity of Disciplinary Measure (Negligent Management and Supervision)’” [Tags] Unfair dismissal, legitimacy of reassignment (reduction of overseas sales), performance evaluation · poor performance, others, 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 Case on ‘Existence of Dismissal (Text Messages · Encouragement to Report to Work)’,” in a new window. ※ The list of decisions related to legitimacy of reassignment (reduction of overseas sales) can be viewed together at “List of Decisions on Legitimacy of Reassignment (Reduction of Overseas Sales).” ※ Korean version of this case: Korean article