Advisory on Risk Management Following the Conclusion of a Workplace Harassment Case

1. Overview of the Case

After conducting an internal investigation into a workplace harassment issue, a company was reviewing follow-up measures regarding the resignation of the victimized employee and the staff members identified as the perpetrators. In appearance, the victim's resignation had been carried out in the form of a "recommended resignation," and this gave rise to the possibility of future legal risks such as a claim of unfair dismissal or fraudulent receipt of unemployment benefits. There was also uncertainty as to whether disciplinary action should be taken against the employees identified as perpetrators.

The first issue was whether the manner in which the victim's resignation had been handled could be deemed an unfair dismissal. On this point, our firm presented the opinion that, since the recommended-resignation agreement expressly stated it was a "voluntary resignation by agreement with the company" and there was clear evidence that the victim herself had requested to resign, it was reasonable to interpret it as a voluntary resignation.

The second issue was whether, depending on how the resignation was processed, the risk of fraudulent receipt of unemployment benefits could extend to the company as well. On this point, our firm pointed out that where a resignation that was in fact "voluntary" had been formally processed as a recommended resignation, the company could be charged under the Employment Insurance Act with having colluded in the fraudulent receipt, and emphasized that maintaining confidentiality was, in practice, of paramount importance.

The third issue was the necessity of disciplinary action against the employees identified as perpetrators. Citing Article 76-3, Paragraph 5 of the Labor Standards Act, Your Legal Team clearly explained that the provision merely mentions discipline as an example of "necessary measures" and does not compel discipline, and that since it had been determined the matter did not constitute workplace harassment, there was no obligation to discipline.

Through this advice, the client was able to eliminate in advance any scope for an unfair dismissal claim or legal dispute over the victim's resignation, and to establish an effective response to the legal risks related to the handling of unemployment benefits. In addition, by ruling out unnecessary disciplinary procedures against the employees identified as perpetrators, the client was able to prevent the recurrence of internal conflict within the organization and to minimize the personnel management risks following the conclusion of the matter. This case clearly demonstrates how important the systematic review of legal experts is in establishing a reasonable and defensible closure strategy at the organizational level after a sensitive workplace issue arises. In particular, a response that comprehensively considers even the criminal risks related to the handling of unemployment benefits can provide practical guidance to companies exposed to personnel management risk.