Employer accused and transferred for failing to pay severance pay... What is the reason for ‘non-indictment and dismissal of appeal’?

The prosecution decided not to indict a business owner who had been sent by the Employment and Labor Office on charges of failing to pay severance pay to employees who had worked for more than 10 years, and also dismissed the appeal.

The Seoul High Prosecutors' Office dismissed the appeal of 'retired employee A' on the 12th of last month in response to the appeal of the case in which the Central Regional Employment and Labor Office sent the business owner, Mr. B, to the prosecution on charges of violating the Employee Retirement Benefit Security Act in September of last year.

Mr. A was hired by Mr. B's company in May 2012, but suffered an injury in July of that year, two months after joining the company, and entered industrial accident care. Afterwards, he did not work for over 10 years. However, Mr. A's four major insurance policies were lost only in February 2023, 10 years later.

However, only then did Mr. A demand severance pay of about 21 million won from Mr. B. This amount was calculated by considering the working period from May 2012, when Mr. A started working, to the date when the four major insurance policies expired.

However, Mr. B refused to pay severance pay to Mr. A.

Mr. A then submitted a petition to the competent Employment and Labor Office, and after completing the related investigation, the Employment and Labor Office transferred Mr. B to the Uijeongbu District Prosecutors' Office on charges of non-payment of severance pay.

Mr. B claimed, “Mr. A’s actual working period was only 2 months, and we reported the four major insurance policies late so that the injured Mr. A could maintain his health insurance and receive treatment,” and “I thought there would be no obligation to pay severance pay.”

The Uijeongbu District Prosecutors' Office, which investigated this case, determined that Mr. B's failure to pay severance pay was not intentional. The main reason was that Mr. A had never worked since his injury, and his actual working period was less than a year.

In the decision to not indict, the prosecution stated the reason for the non-indictment, saying, "Because more than 10 years have passed since the end date of employment, it would have been difficult for the employer to think that severance pay should be paid. The delayed loss of the four major insurance policies is only an administrative process and cannot be considered the actual end date of the working period," and "It is highly likely that Mr. B recognized that he had no obligation to pay severance pay to Mr. A."

Mr. A objected to this and submitted an appeal.

However, as a result of the Seoul High Prosecutors' Office's investigation into Mr. B's charges, the appeal was dismissed due to insufficient evidence, and the non-indictment of Mr. B was maintained.

Attorney Heo Seong-guk of Daeryun Law Firm (Limited), who represented business owner B in this case, said, "If there was a mistake or unavoidable circumstances in not paying wages or severance pay, it cannot be considered intentional. From the employer's perspective, it was difficult to think that severance pay would have been incurred because Mr. A actually worked for a short period of time. In addition, it appears that it has been acknowledged that there were difficulties in making actual payments due to the deterioration of the company's management."

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