Ensuring Legal Stability in Executive Retirement and Dismissal Procedures

The client company faced complex legal issues regarding the method of paying executive severance and the procedure for dismissing its representative director. In particular, it needed legal review of the basis for calculating severance for non-registered executives, whether the executive severance regulations applied, the distinction between recommended resignation and dismissal procedures, and the procedure for dismissing the representative director through a general shareholders' meeting. Judging that the risk of dispute would be high if procedural defects arose, the company sought advice from Your Legal Team.

First, on the severance calculation issue, the company asked whether it could pay severance based on a contract amount higher than the salary actually paid. In response, we made clear that raising working conditions is not problematic under the Labor Standards Act, thereby eliminating the possibility of dispute. We also reviewed the point that executive severance payment regulations apply only to "registered executives," confirming that there was no obligation to pay a triple-multiple severance to the subject, who was a non-registered executive.

Second, regarding the resignation procedure, we advised that recommended resignation and dismissal be clearly distinguished. We emphasized that recommended resignation requires securing the worker's voluntariness, and that if procedural requirements are not met, it may be deemed an unfair dismissal. In addition, we organized that if the worker does not consent to resignation, disciplinary dismissal procedures must be followed, which require just cause under the rules of employment and the Labor Standards Act.

Third, regarding the procedure for dismissing the representative director, we confirmed that the special resolution requirements of the general shareholders' meeting must be satisfied under the Commercial Act. We provided detailed guidance on reviewing the articles of incorporation, board resolutions, convening the general shareholders' meeting, and quorum requirements, supporting the process so that no procedural defects would occur.

Through this advice, the client company was able to prevent unnecessary excessive severance payments and to clearly distinguish between recommended resignation and disciplinary dismissal procedures, minimizing the possibility of future disputes. It also accurately carried out the general shareholders' meeting procedure for dismissing the representative director, securing legal stability. This case comprehensively addressed issues that frequently arise in companies, such as judging executive status and worker status, the scope of application of severance regulations, and the general shareholders' meeting dismissal procedure, and holds great practical significance.

Your Legal Team provides professional and systematic advice so that companies can stably resolve complex legal issues related to HR and labor.