Is it possible to discipline an applicant for honorary retirement after the scheduled retirement date?

I. Conclusion

 

What action should the company take if misconduct is discovered right before the expected retirement date of the applicant for honorary retirement?

 

The company must 'refer the resignation applicant to disciplinary procedures and place them on a waiting list' immediately upon the discovery of the misconduct. The applicant for retirement must be disciplined promptly but in compliance with relevant regulations.

 

According to the precedent, it is legal for disciplinary action to be taken after the retirement applicant's scheduled retirement date.

 

II. Case Background

 

(Reference: Seoul High Court 2022. 9. 16. Decision 2022 B 2001631)

 

The case is based on the above precedent.

 

Insurance Company X introduced a wage peak system.

 

Starting from January 2019, Company X implemented the 'temporary compensation retirement system for employees subject to the wage peak system' for workers subject to the wage peak system (hereinafter referred to as the 'retirement system in this case').

 

The retirement system in this case provides lump-sum compensation and other support funds to employees aged 55 with 15 years of service or more who wish to retire instead of working until the retirement age of 60. It also grants self-development education periods and supports education expenses up to 300,000 won per month.

 

Employee A of Company X, who has worked for more than 15 years and will reach the age of 55, applied for retirement under the retirement system in this case on January 1, 2023. A has February 28, 2023, as their retirement date.

 

Accordingly, Company X provided A with educational expenses to attend intermediate English conversation lectures and housing manager lectures among various compensation for honorary retirees.

 

However, after A's resignation application, Company X conducted an audit on the misconduct of 'A attempting to scout employees belonging to Company X while preparing to open an insurance agency in competitor insurance company Y.' A was referred to disciplinary procedures and placed on standby.

 

Company X held a personnel committee meeting, and on March 15, 2023, A was dismissed as a disciplinary measure on the grounds that A leaked employees, violated the duty to prohibit concurrent positions, and took out information assets and personal information during their tenure of office. Company X did not pay the wage peak lump sum compensation.

 

In response, A argued:

 

1. Company X's disciplinary action is ineffective because it is for those who have already retired since the scheduled retirement date (February 28, 2023) had passed at the time of the disposition (disciplinary date: March 15, 2023).

 

2. A applied for retirement and claimed that since February 28, 2023, the expected date of retirement, had already passed, A had resigned from Company X, and Company X was obligated to pay the wage peak lump sum compensation.

 

III. Court Ruling

 

1. Whether Company X approved A's resignation application

 

Voluntary or honorary retirement takes effect only after the employee's application and the company's approval.

 

In this case, since Company X supported educational expenses for honorary retirees, it should be regarded as giving tacit approval to A's application for retirement.

 

2. Whether Company X can withdraw its severance approval

 

Honorary retirement is the termination of an employment relationship by mutual agreement, with the employer approving the employee's application. This decision cannot be withdrawn, and when the agreed-upon honorary retirement date arrives, the employee will be retired, and the employer is obliged to pay the honorary retirement pay. In cases of serious misconduct that make it difficult to continue the employment relationship, the employer may revoke the approval of honorary retirement (refer to the Supreme Court ruling on August 23, 2002, 2000 C 60890, 60906, etc.).

 

If serious misconduct is discovered and a waiting list order is taken, but the employee is still set to retire on the original scheduled retirement date, the disciplinary authority must quickly proceed with disciplinary procedures against the employee whose retirement date is imminent or, conversely, not proceed with the disciplinary procedure. In the former case, there is a possibility that the disciplinary action will be invalidated later due to defects in the disciplinary procedure, while in the latter case, it is unreasonable from any perspective as it excessively limits the disciplinary rights of the person with the authority to discipline.

 

Therefore, if the plaintiffs' serious misconduct is recognized, the defendant can withdraw the approval for each resignation application in this case. As a result, the scheduled retirement date for "A" (February 28, 2023) would be postponed, and it is reasonable to assume that the approval for the resignation application in this case was withdrawn due to disciplinary dismissal on March 15, 2023.

 

 

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