"Pay Cut If You Quit Within 3 Months"... What Are the Risks of Part-Timers' 'Unfair Employment Contracts'?

Recently, as a result of the Ministry of Employment and Labor conducting a planned inspection targeting workplaces such as famous franchise cafes and restaurants, violations of labor-relations laws such as wage arrears and failure to prepare employment contracts were caught in bulk.

It was revealed that these stores coerced settlements of millions of won on the pretext of employees' misconduct, or withheld additional allowances through 'workplace splitting' on paper.

Particularly notable are unfair employment contract clauses such as 'only 90% of wages will be paid if you quit within 3 months of joining' or 'in case of contract non-performance, damages will be claimed after calculating the sales loss.' These safeguards arbitrarily placed by employers to prevent frequent departure of part-timers and business losses can become problematic.

Employers must not forget that such clauses, which they considered defensive measures, can become subject to criminal punishment. Article 20 of the Labor Standards Act (Prohibition of Predetermined Penalties) states, "An employer shall not conclude a contract predetermining a penalty or damages for non-performance of a labor contract."

In other words, predetermining in advance 'how much you must pay' even if a worker fails to complete the contract period or quits without notice is not legally permitted. Even if the party signed and agreed, it is ineffective, and merely specifying this in the employment contract can make the employer subject to criminal punishment such as a fine of up to 5 million won.

Then, if a worker intentionally damages supplies or embezzles store funds and flees, must the employer simply endure it helplessly? No. For actual damages caused by clear misconduct, civil damages can be claimed after objective proof.

However, the mistake employers most commonly make here is 'arbitrary deduction.' The act of arbitrarily calculating the damage amount caused by an employee and deducting it at will from the last month's salary or severance pay is a violation of Article 43 of the Labor Standards Act (Principle of Full Payment of Wages). Under Supreme Court precedent, an employer unilaterally offsetting a worker's wage claim against a damages claim is prohibited.

Furthermore, if one pressures a worker with wage payment as a weapon, saying 'I won't give you your back wages unless you agree to the damages,' or coerces excessive settlement on the pretext of embezzlement without objective grounds, the situation deteriorates uncontrollably.

This is difficult to rule out as escalating beyond simple wage arrears into a separate, weighty criminal dispute such as coercion or extortion under the Criminal Act. Before falling into such a predicament, employers would do well to remember the following.

First, revising existing employment contracts and pledges. If there are penalty-type clauses such as 'return of training costs upon resignation' or 'pay cut for falling short of the mandatory service period,' they must be deleted.

Second, establishing the principle of 'wage payment first, civil claim later.' Even if a worker damages the business through unauthorized absence and disappears, the employer must pay in full the wages accrued within 14 days of the resignation date under Article 36 of the Labor Standards Act to avoid the risk of criminal punishment.

Damages should in principle be legitimately contested through a separate civil litigation procedure after fulfilling the wage payment obligation.

Third, overhauling a lawful disciplinary system. If you wish to control a worker's poor attendance or misconduct, rather than illegal wage deductions, you must go through a lawful disciplinary committee procedure specified in the employment rules to carry out 'salary reduction (within the limit under the Labor Standards Act)' or 'disciplinary dismissal,' and keep the grounds in writing.

The industry practice of 'everyone else does it' cannot be a legal indulgence. Rather than relying on after-the-fact emotional conflicts or unreasonable private sanctions, employers must protect themselves by building a fair and airtight labor management system within the framework of the Labor Standards Act with the help of a labor law expert from the beginning.

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"Pay Cut If You Quit Within 3 Months"... What Are the Risks of Part-Timers' 'Unfair Employment Contracts'? (Go to link)