Question 6: Normally, upon the beginning of a new employment, Employers and Employees will sign probationary contracts or offer letters with the probationary period based on the type of LC that will be signed later on. Upon the end of the probationary period, if Employees satisfy the job requirements, then LCs will be signed. During the probationary period, if Employers realise that Employees are not qualified, they may notify Employees of the termination of the probationary period immediately. However, if Employers and Employees sign LCs at the beginning of the employment, in which a probationary period is specified based on the type of LC, and Employers realise that Employees are not qualified during the probationary period, can Employers terminate the probationary period? Or is this considered as a case where LCs have been signed so Employers must have a legitimate reason as required by labour law to terminate LCs as well as comply with the provision on notification prior to the unilateral termination of LCs?


The applicable labour law does not expressly stipulate if at the beginning of a new employment Employers are allowed to sign LCs in which a probationary period is specified. However, pursuant to Article 29.1 of the Labor Code, only when the probationary period ends and Employees can meet the requirements agreed upon by the parties will Employers be obliged to sign LCs with Employees. In addition, Article 23.1 of the Labor Code providing for the contents of an LC lists the key points that an LC must have but does not provide for the probation (including the probationary period). Thus, in the spirit of the Labor Code, the contents on probation need to be separated from the contents of an LC. In principle, if the parties agree on a probationary period, they must sign a probationary contract before singing LCs. When the probationary period ends and if the probationary results are satisfactory, the parties will sign official LCs. Therefore, if the parties specify a probationary period in LCs which are entered into and take effect from the first working day, this will lead to a risk that such LCs are considered to be made and become effective from the first working day. Therefore Employers may not have the right to terminate the probationary period as allowed by law because LCs have been made at the beginning of the employment. In this case, if Employers wish to terminate LCs with Employees, they must have one of the reasons for unilateral termination of LCs as prescribed in Article 38 of the Labor Code and comply with the procedure of prior notification.