Dear Mr Park
Suppose an ABC appointee (hereinafter referred to as an “appointee”) executes an employment contract with ABC and fails to join the company before the agreed-upon date in the contract, the applicant is deemed to have exercised legitimate termination rights under the Civil Act and the Labor Standards Act.
The existing offer letter’s provision of a mandatory term (1 year) for the return of the Sign-on bonus without calculation to those who resign before the said term of 1 year will be amended in the near future by ABC to increase job handouts for job applicants. Allowing more than a full refund, on the other hand, is likely to be ruled ineffective under Article 20 of the Labor Standards Act.
Please refer below for a more detailed analysis
[Analysis]
1.Details on termination of the labor contract
- Legality of the termination of the labor contract
This case involves an ABC appointee who refused to join ABC before the agreed-upon date while the appointee’s contract was still valid. (No fixed working period) The above refusal amounts to a notice of termination of the labor contract.
If the employee accepts the notice of contract termination without a fixed working period, Article 660 of the Civil Act will take effect immediately; if the company does not agree, the contract will be terminated after one month from the date of the notice. ABC has no reason to insist on keeping an employment contract with a prospective employee as this employee’s refusal would result in the labor contract being terminated, regardless of whether ABC accepts the employee’s notice of termination or not.
- Possibility of a claim for damages due to termination of labor contract
Since it is impossible to conclude that the appointee has an attributable reason for termination as a result of the lawful exercise of the right to terminate the contract with the appointee, ABC’s claim for compensation for the applicant is not feasible. Even if the applicant has a reason to be held accountable, it is unlikely that ABC’s claim for compensation will be recognized, as ABC’s termination of the labor contract did not result in the loss of potential revenue, nor had the appointee begun their employment. In such a case, it is difficult to say that ABC suffered the loss of potential revenue from termination of the contract, and it is highly unlikely that ABC’s claim for compensation for revenue loss is valid.
Suppose the said company does not recognize the appointee’s refusal to join the company after receiving notice of termination, it will be sufficient to conclude absence without consent from the agreed-upon date until the effective date of termination. It is possible to consider compensation for damages, but as mentioned before, ABC’s claim for compensation for damages is difficult to prove under such circumstances as there is no clear evidence of damages as a direct result of the appointee’s actions.
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