Article 31 of the Labor Standards Act stipulates that ‘Where an employer wishes to dismiss a worker for business reasons, there must be an urgent necessity in relation to business. It shall be deemed that there is such an urgent business necessity in the case of business transfer, merger or acquisition of the business to prevent business deterioration. ( ) the employer shall make every effort to avoid dismissal and shall establish and follow reasonable and fair criteria for the selection of those persons subject to dismissal ( ) Where there is an organized labor union which represents more than half of the workers at a business or business location, the employer shall inform and consult in good faith with the labor union regarding the methods for avoiding dismissals and the criteria for dismissal ( ) at least 60 days before the intended date of dismissal’.

– Thus, the above law clearly states that dismissal for managerial reasons can only be
carried out if justified reasons exist.

There are no special rules for selecting the labor representative, but the representative has to be based on the autonomy of the workers and has to be able to represent their opinions. If a labor-management council is established, and the members represent more than half of the workers, then they are acknowledged as justified representatives of the workers.
Accordingly, if the representative does not represent more than half of the workers, then the representative is not a justified representative, and thus collective dismissal for managerial reasons is invalid.

Objective

• To make use of the technology possessed by SME4s and promote the productization and commercialization of the technology as well as promote SMEs with focus on technological skills.

Amount of Benefits:

• KRW75 billion (based on the standards of 2004)

Eligibility for Benefits:

• Any SME, which has participated in a technology-supported business organized by a government agency such as the Small and Medium Business Administration (SMBA) within the last three years and has completed technology development successfully, and an Inno-Biz company selected by the SMBA.
• Any SME, which is in possession of a patent right within three years of its technology evaluation registration of the patent (including patent pending technology)
• Any SME, which wants to commercialize technology received through a transfer from a university or research institute in Korea or abroad within the past three years.

Range of Benefits

• For the production facilities and tests / evaluations needed for the mass production of products using the developed technology;
• For the operation of daily business activities and for the commercialization of the developed technology and the patent, such as purchase of raw material and market penetration costs.

Conditions of the Loan

• Annual interest rate of 4.9% (flexible rate);
• Repayment within a maximum of five years (including a two-year grace period);
• Amount of loan is KRW 500 million per year per company (KRW300 million for operating capital);
• The loan can be applied for directly at the Small Business Corporation (SBC).

Process

• Application and Registration

– Application at a local office of the Small Business Corporation (SBC);
– In case of a loan through a reference, the SBC notifies the Korea Technology
Credit Guarantee Fund (Technology Evaluation Center) and requests an
investigation.
• Investigation and Final Decision

– In case of a pure credit loan, a pre-evaluation will be made at the local office of
the SBC and an on-the-spot inspection will be conducted by the local office of
the SBC together with the local office of the SMBA before the final decision is
made by the Fund Selection Committee;
– In case of a loan through a reference by the Korea Technology Credit Guarantee
Fund, the final decision about the grant will be made after evaluation and
investigation of the technology in one of the 10 local technology evaluation
centers.

• Location of Application and Registration

– Local office of the Small Business Corporation (SBC)

A foreign investment zone is designated in order to attract large-scale foreign investment in locations where the foreign investor wants to set up a factory.The requirements for the designation of foreign investment zone is a foreign investment of more than US$30 million.The tax benefits are the same as for high-technology businesses, and various benefits are given for the development and establishment of infrastructure such as harbors and roads. Furthermore, a 100% reduction of rent is given for land owned by the government. 

A visa allows the legal entry into and sojourn in a foreign country under the conditions of the visa, which may vary according to the type of visa. Furthermore, it confirms the validity of the passport and its legal status through its issue by the foreign government. A visa is perceived in some countries as a “confirmation of permission to enter the country”, and in other countries as a “recommendation of the consulate to enter the country”. The United States, Japan and Korea perceive the issue of a visa as a “recommendation of the consulate”.Accordingly, even if a foreigner who wishes to enter Korea and is in possession of a valid visa, he or she might get rejected by an official at the immigration if the person does not meet certain entry requirements — for example, in case of prohibited entry, attempting illegal employment, or having no specific reason for entry, etc.The right to issue a visa is in the hands of the Ministry of Justice. But it can be transferred also to the heads of other government institutions such as embassies, government agencies, consulates, and consular offices

Foreigners in possession of a multiple long-term visa:

– If the sojourn period in the multiple long-term visa and the alien registration ID are the
same, free entry to and departure from Korea is possible without a re-entry permit
until the date of expiration of the visa and alien registration ID.
– If the date on the ID and visa are different, the valid expiration date is that on the alien
registration ID.

Foreigners with a simple visa and approval for change of status:

– A simple or multiple re-entry permit must be obtained at the immigration office or
Invest KOREA for free entry and departure.
– It is also possible to receive a re-entry permit on the day of departure at the airport
immigration office.

Exempt from re-entry permit requirements are citizens of the following countries:

– France, Germany, Denmark, Norway, Finland, Switzerland, Sweden, Belgium,
Netherlands, Luxembourg, Surinam, Granada.
– Citizens of the above countries may re-enter freely during the period of sojourn.
– However, citizens of these countries still need to register for the alien registration ID,
if they plan to stay in Korea longer than 91 days in order to be exempt from re-entry
permit.

Re-entry permits are granted on the basis of the expiration date of the passport, period of sojourn, and extension period (simple visa 1 year, multiple visa 2 years).The period of sojourn is within the expiration date of the passport, and the re-entry permit is within the period of sojourn in Korea.

If any disputes arise during the construction of buildings, it is possible to apply for the settlement of a dispute at the Construction Dispute Settlement Committee at any city or provincial office.
The duties of the Committee include the following:

– Disputes between builders and residents of construction sites claiming damage of any
kind;
– Disputes between professional engineers and residents;
– Disputes between builders and professional engineers;
– Disputes between builders;
– Disputes between residents;
– Disputes between engineers.

The permissions and approvals needed for environment business do not make a distinction between foreigners and Korean nationals. Therefore, it is possible for a foreign national or foreign company to be involved in an environment-related business.
In order to conduct a business in the environment sector such as environmental pollution prevention facilities, relevant approvals and permissions need to be obtained from the local environment management agency in line with the conditions as stipulated in the environment-related acts.
It is possible to supply material for and design of prevention facilities business to prevention facilities businesses even if not being registered as an environmental pollution prevention facilities business, if public institutions and agencies as well as registered prevention facilities businesses make such an order.

In order to reduce the burden for the company and the employer, a mid-term settlement of severance pay was introduced.

– A mid-term settlement of severance pay is to pay severance for the period of
continuous work the employee has provided even before retirement. In case of mid-
term settlement, the continuous period of work will be newly-calculated from the day
the mid-term severance pay was settled.
– Other conditions such as those concerning promotion, incentives or paid leave will be
considered as continuous even after the mid-term settlement of severance pay.
There is also a severance pay insurance system:
– The severance pay insurance allows the worker to receive severance pay at retirement
as bulk payment or as pension;
– In this case, the amount of severance pay to be received as bulk payment must not be
less than the severance payment of the severance pay system.

If the employer has changed due to an M&A, only the workers who are presently working in the company are subject to employment succession. A worker, who was dismissed prior to the merger, is not included in the employment succession.
In this case therefore, if an application for relief of unfair dismissal was submitted to the Labor Relations Commission, it will likely be rejected due to lack of proper eligibility.

Yes, a foreign-invested company is also eligible for the same benefits. If the company meets the requirements, then the foreign-invested company is eligible to apply without any additional procedure.More detailed information can be found in the following websites:

– Small and Medium Business Administration, www.smba.go.kr
– Small Business Corporation, www.sbc.or.kr
– National Tax Service, www.nts.go.kr
– Information system for policy funds, www.finainfo.go.kr