Question 123: Pursuant to Article 42.1 of the Labor Code, when unilaterally terminating LCs against labour law, Employers must accept Employees back to work under the signed LCs and pay salaries, social insurance and health insurance premiums for the days when Employees are not allowed to work. As such, if the LC term is definite and the court’s judgment requests Employers to accept Employees back to work, then:

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1.If the LC term has expired, must Employers accept Employees back to work? If Employers must accept Employees back to work, the duration of work is from the time of unilateral termination to the expiration date of LCs, isn’t it?

Pursuant to Article 42.1 of the Labor Code, when unilaterally terminating LCs against labour law, Employers must accept Employees back to work under the signed LCs, i.e. including the provisions on the LC term. This means Employers only have to accept Employees back to work according to the term of the signed LCs.

By reference to some judgments on the same issue, in this case the court has ruled that the LC will expire on the expiration date of the contract. Accordingly, if LCs have expired at the time of the judgment, Employers will not be obliged to accept Employees back to work, but they must discharge other payment obligations as prescribed by law. If LCs have not expired at the time of the judgment, Employers are obliged to accept Employees back to work until the expiration date of LCs.

2. Regarding the obligation to pay salaries, SI and HI premiums (“Payable Amounts”) for the days when Employees are not allowed to work, the wording “the days when Employees are not allowed to work” counts from the date of unilateral termination to the expiration date, or from the date of unilateral termination to the date of the judgment, the date Employees return to work or the date two parties agree on terminating LCs?

The Labor Code does not expressly prescribe how to calculate the number of days when Employees are not allowed to work. However, this regulation is by nature to ensure the continuance of LCs and Employees’ legitimate rights and interests (the right to work and to be paid) during the contract term for the case where their LCs are terminated unilaterally and unlawfully. Therefore, for Employees who work under definite-term LCs, the days when Employees are not allowed to workshould be understood as the days when they are not allowed to work under the signed definite-term LCs.

It’s also true in actual hearings that the court only requests Employers to pay the said Payable Amounts corresponding to the duration when Employees are not allowed to work under the signed LCs or other agreements (if any). In practice, the number of days when Employees are not allowed to work is counted from the date of unilateral termination of LCs to the date when Employees would have been allowed to work under the signed LCs, specifically:

  • If LCs have expired at the time of the judgment, the number of days when Employees are not allowed to work will be counted to the expiration date; and
  • If LCs have not expired at the time of the judgment, the number of days when Employees are not allowed to work will be counted from the date of unilateral termination of contracts to the date Employers accept Employees back to work.
  • If Employees do not agree to return to work or Employers do not want to accept Employees back to work, the number of days when Employees are not allowed to work will be counted to the date of the judgment or according to the agreement between the parties.