Mass Layoffs Due to COVID-19 Business Decline... Court Ruling Deems Them "Justified"

The court ruled that the airline's dismissal of pilots due to business deterioration caused by the COVID-19 pandemic was justified.

According to the legal community on the 29th, the Seoul Administrative Court Administrative Division 13 (Chief Judge Park Jeong-dae) recently ruled against 29 pilots who were laid off by Airline A and had filed a lawsuit challenging the Central Labor Commission's decision that the dismissal was not unfair.

Airline A had dismissed 605 employees in 2020 due to business deterioration caused by COVID-19. Among them, the 29 dismissed pilots applied for relief to the Seoul Regional Labor Commission in December 2020, claiming unfair dismissal and unfair labor practices. The commission partially accepted their claim, stating that the company did not make sufficient efforts to avoid dismissal and thus did not meet the requirements for dismissal due to business reasons.

Disagreeing with this, Airline A requested a reconsideration from the Central Labor Commission in June 2021. When the Central Labor Commission overturned the decision, stating that it could not be considered unfair dismissal, the laid-off pilots filed another lawsuit.

The court stated, "Airline A was already experiencing a business crisis before COVID-19, and when flight demand disappeared due to COVID-19, its debt rapidly increased," adding, "It is impossible to predict how long the suspension of flights and the resulting expansion of operating losses caused by COVID-19 will continue."

The court also found that Airline A made sincere efforts to avoid dismissal, including voluntary unpaid rotational leave, wage reduction agreements with the pilots' union, and four rounds of voluntary retirement. The criteria for selecting those to be dismissed were judged to have objective rationality and social reasonableness, based on the average personnel evaluation over the past three years, disciplinary records, and awards.

Regarding personnel evaluations, the court stated, "In principle, it is the authority of the employer who holds personnel rights," and added, "Even if qualitative elements are included in the nature of personnel evaluations, it cannot be concluded that this is arbitrary or an abuse of authority."