[Case Information] This case is a decision in which the employee prevailed in full on the issue of “non-existence of urgent managerial necessity (abolition of the leasing business team).” Decision Committee: Jeonbuk Regional Labor Relations Commission 2026부해245 ○ ○ ○ Application for Remedy for Unfair Dismissal 2026-07-28 · Outcome: Employee’s claim fully upheld Summary of key issues: a. Whether urgent managerial necessity existed Given that sales and profits steadily increased on the financial statements, cash holdings were sound, and no crisis was apparent from the objective financial data, urgent managerial necessity was not recognized. b. Whether efforts were made to avoid dismissal Prior to discussions on abolishing the leasing business team, the employer merely recommended reassignment and did not actively seek other methods to overcome the alleged management crisis, nor did it consider the employee’s proposal for a wage-peak system. Accordingly, it was difficult to find that sufficient efforts had been made to avoid dismissal. c. Whether the selection of employees to be dismissed was reasonable and fair The employer selected only those employees remaining after the organizational restructuring as dismissal candidates, without reasonable evaluation criteria, etc. 1. Legal Implications Ⅰ. Case Overview In this case, during an organizational restructuring in which the company abolished its leasing business team, it notified certain employees of redundancy dismissals. The employees filed an application with the Labor Relations Commission, claiming that the dismissals were unfair. The Jeonbuk Regional Labor Relations Commission reviewed the financial statements and the overall dismissal process to determine whether the employer’s assertion of managerial dismissal was justified. Ⅱ. Summary of Issues The issues in this case were whether, in a situation where sales and profits were steadily increasing and the company’s financial condition was sound, there existed urgent managerial necessity for redundancy dismissal on the ground of abolishing the leasing business team, and whether efforts to avoid dismissal and the selection of employees to be dismissed were carried out in a reasonable and fair manner. Ⅲ. Summary of the Labor Relations Commission’s Findings The panel in this case found that it was difficult to view the company as being in an objective managerial crisis, given that sales and profits had steadily increased according to the financial statements and cash holdings were sound. It also found that, prior to discussions on abolishing the leasing business team, the employer merely recommended simple reassignment and did not actively explore other dismissal-avoidance measures, including alternatives proposed by the employee such as a wage-peak system. In addition, the employer selected dismissal candidates only from among those employees remaining after the organizational restructuring, without reasonable evaluation criteria. Accordingly, the Commission held that the dismissal in this case constituted an unfair dismissal that failed to satisfy all of the statutory requirements for redundancy dismissal under the Labor Standards Act—namely, the existence of urgent managerial necessity, efforts to avoid dismissal, and the reasonableness and fairness of the selection of employees to be dismissed. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, when a company asserts redundancy dismissal, it is important to carefully review the actual financial statements, the proportion of labor costs, and indirect indicators such as new hiring and outsourcing. Furthermore, if the employee has proposed alternatives such as a wage-peak system or voluntary reassignment and the employer has ignored these proposals, such circumstances can serve as important grounds before the Labor Relations Commission to argue that the employer’s efforts to avoid dismissal were insufficient. Ⅴ. Practical Points (From the Employer’s Perspective) From the employer’s side, when considering redundancy dismissal, it must be able to objectively prove, through financial indicators and business outlook, that an actual urgent managerial crisis exists. In addition, the employer should substantively review and implement various dismissal-avoidance measures—such as reassignment, wage adjustments, and voluntary retirement—and document that process. When selecting employees to be dismissed, the employer should establish objective criteria that comprehensively take into account age, length of service, dependents, health status, and work performance, in order to ensure fairness. 2. Matters Decided a. Case Overview and Procedural History a. Existence of urgent managerial necessity Given that sales and profits steadily increased on the financial statements, cash holdings were sound, and no crisis was apparent from the objective financial data, urgent managerial necessity was not recognized. b. Efforts to avoid dismissal Prior to discussions on abolishing the leasing business team, the employer merely recommended reassignment and did not actively seek other methods to overcome the alleged management crisis, nor did it consider the employee’s proposal for a wage-peak system. It was therefore difficult to find that sufficient efforts had been made to avoid dismissal. c. Reasonableness and fairness of the selection of employees to be dismissed Without reasonable selection and evaluation criteria, the employer selected only those employees remaining after the organizational restructuring as dismissal candidates, etc. 3. Gist of the Decision a. Summary of the Labor Relations Commission’s Findings a. Existence of urgent managerial necessity Given that sales and profits steadily increased on the financial statements, cash holdings were sound, and no crisis was apparent from the objective financial data, urgent managerial necessity was not recognized. b. Efforts to avoid dismissal Prior to discussions on abolishing the leasing business team, the employer merely recommended reassignment and did not actively seek other methods to overcome the alleged management crisis, nor did it consider the employee’s proposal for a wage-peak system. It was therefore difficult to find that sufficient efforts had been made to avoid dismissal. c. Reasonableness and fairness of the selection of employees to be dismissed Without reasonable selection and evaluation criteria, the employer selected only those employees remaining after the organizational restructuring as dismissal candidates, etc. / [See More Related Decisions] - “Unfair Dismissal Decision on ‘Failure to Satisfy Requirements for Redundancy Dismissal (Workout Company)’” - “Unfair Dismissal Decision on ‘Dismissal Rejected (Non-Appearance at Hearing)’” – Date of Decision: – Case No.: Dismissal Rejected - “Unfair Dismissal Decision on ‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’” [Tags] Unfair dismissal, non-existence of urgent managerial necessity (abolition of the leasing business team), 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 one of Labor Law Firm Law&’s “Unfair Dismissal Decision” series. ※ You can view the previous article, “Unfair Dismissal Decision on ‘Employee Status (In-House Director · Outsourcing of Course Management)’,” in a new window. ※ The list of decisions related to non-existence of urgent managerial necessity (abolition of the leasing business team) can be viewed together in the “List of Decisions Related to Non-Existence of Urgent Managerial Necessity (Abolition of the Leasing Business Team).” ※ Korean version of this case: Korean article