Bus Company Fired Driver After Only Receiving COVID Incentive... Court Rules "Unfair Dismissal"

During the COVID-19 pandemic, a transportation company's act of unilaterally notifying the expiration of a labor contract after having signed a contract with a driver and receiving government subsidies was ruled by the court as an 'unfair dismissal.'

Seoul Administrative Court

According to the legal community on the 7th, the Seoul Administrative Court Administrative Division 14 (Chief Judge Song Gak-yeop) ruled against Company A in a lawsuit filed by Company A against the Central Labor Relations Commission seeking to cancel the reconsideration ruling on unfair dismissal relief.

Company A, located in Gwangmyeong-si, Gyeonggi Province, notified Mr. B, who worked as a bus driver, in May 2022 that "the labor contract will automatically expire in June." This was based on the first labor contract signed when Mr. B joined in June 2021, which specified the employment period as "1 year."

However, Company A and Mr. B had previously signed a second labor contract in January 2022 extending the contract period to "December 2022." Based on the second labor contract, Mr. B filed relief applications with the Gyeonggi Regional Labor Relations Commission and the Central Labor Relations Commission, both of which ruled in his favor, stating that the company's unilateral termination of the labor contract constituted unfair dismissal.

Company A disagreed and filed a lawsuit with the Seoul Administrative Court, arguing that "the second labor contract was formally written only to receive COVID-19 subsidies from Gyeonggi Province and did not actually extend the employment period."

However, the court ruled in favor of Mr. B, stating that Company A's unilateral notification of contract termination constituted unfair dismissal. The court stated, "It is reasonable to consider that the second labor contract was validly concluded, and there is insufficient evidence to believe that Company A merely drafted the second labor contract formally to receive COVID-19 subsidies."

Furthermore, the court added, "Since Company A did not notify Mr. B in writing of the reasons and timing of dismissal, it violates the 'written notice obligation of dismissal' stipulated by the Labor Standards Act, rendering the contract termination notice ineffective," and concluded, "The termination of the labor contract is unfair dismissal without further examination."