A Side-Job Ban in Your Company Rules Does Not Automatically Justify Discipline in Korea — Five Tests and How to Get Permission First

The Labor Standards Act has no article banning side jobs

What the Labor Standards Act does confirm is a limit on discipline. Article 23(1) says an employer may not impose dismissal, suspension from work, suspension of duties, transfer, pay reduction or other punishment without just cause, and Article 93 requires workplaces that regularly employ 10 or more workers to put rules on commendations and sanctions into their work rules. By contrast, it is hard to find any article in the Act that directly bans or permits side jobs or dual employment. So a ban is written into work rules, employment contracts or service regulations, and both the reasonableness of that clause and the justification of the actual discipline are judged separately when a dispute arises.

The line drawn by the Constitutional Court — dual-job bans only in a limited way

In its decision of April 24, 1997 (95Hun-Ma90), the Constitutional Court held that a ban on holding another job may be imposed in a limited way where, given the nature of the occupation, combining it with other work could harm the fairness of the duties. However, that case concerned the Administrative Scrivener Act, not a company employee, and the court found that the provision banning every other job and attaching prison terms excessively infringed the freedom to choose an occupation and was unconstitutional. Because it is not a decision on discipline of a private-sector employee, it is most accurate to read it as a reference pointing in one direction: a blanket ban has limits.

A Supreme Court case — dismissal of an employee who worked elsewhere on false sick leave

The Supreme Court judgment of August 23, 2002 (2000Da60890) involved dual employment. After agreeing to honorary retirement, a research-institute employee obtained sick leave before the retirement date on the ground of a minor illness and worked at another company for a little over two months, and the institute dismissed the employee for it. The Supreme Court reversed the lower court, which had found the dismissal too harsh, holding that the leave had been obtained by deception and that two months was not a short period that could be tolerated. The judgment also states the standard: the level of discipline is within the discretion of the disciplinary authority, and it becomes an abuse of discretion only when, weighing the content and nature of the misconduct, the purpose of the discipline and the disciplinary standards, it is objectively and clearly unreasonable. Because the deception about the sick leave weighed heavily, more than the side job itself, this is not a ruling that dismissal is justified whenever you hold a side job.

Five tests for whether discipline is justified

Translated into practical questions, the thrust of these decisions comes down to five.

First, the content of the side job. The key is whether it overlaps with the company's line of business and whether it uses trade secrets or clients. Second, duration and frequency. A one-off job and long-term regular work carry different weight. Third, the effect on the main job. Look at whether attendance or work was affected, such as lateness or absence. Fourth, harm or risk of harm to the company. Fifth, whether you concealed it. Hiding the side job without applying is assessed differently from applying and being refused. A side job during working hours is a departure from duty, and where the line falls between rest and working time is covered in our article on break time.

A ban on side jobs is not the same as a non-compete clause

A side-job ban stops you from doing other work regardless of industry, while a non-compete clause is a clause that stops you from competing in the same line of business as the company. Working for a competitor while employed carries a risk of trade-secret leaks and client loss, so it tends to be easier for the company to argue the discipline is justified. Work unrelated to your main job, such as weekend delivery, is closer to a case where the company has to show a concrete problem. An agreement that blocks you from joining a competitor after you leave is a separate matter, so first work out which clause you are dealing with.

When the discipline feels too harsh — a remedy application and three months

Even if a side job is a ground for discipline, you can argue that a heavy penalty is excessive. Under Article 28 of the Labor Standards Act, a worker can apply to the Labor Relations Commission for a remedy not only against dismissal but against unfair suspension or pay reduction, and the application must be made within three months of the day the unfair dismissal or other punishment took place. What to know before you sign anything is in our article on recommended resignation versus dismissal. If the employer offers to take money out of your pay instead of disciplining you, see our article on limits on wage deductions.

Civil servants and public institutions have a separate permission system

Civil servants are held to a different standard. Article 64 of the State Public Officials Act provides that a public official may not engage in profit-making work outside official duties and may not hold another post without the permission of the head of the agency. Article 25 of the State Public Officials Service Regulations bars profit-making work that is likely to reduce work efficiency or improperly affect official duties, such as running a for-profit business, serving as an officer of a private company or work done for continuing financial gain. Local public officials and public institutions are governed by different laws and internal rules, so check your own organization's service regulations separately.

Steps in order

Step 1: check the exact wording of the dual-job clause in your work rules and employment contract. Tell apart a total ban, a permission system and a ban limited to competitors.

Step 2: before you start the side job, apply for permission in writing or through the company system. State the type of work and the hours, and that it is unrelated to your company's business; if refused, ask for the reason in writing.

Step 3: do not use working hours or company equipment, information or clients for the side job, and keep your application and the reply.

Step 4: if you receive notice of discipline, ask for the written grounds and the clause relied on, and use the chance to explain yourself by setting out your circumstances against the five tests above. If the penalty is excessive, consider a remedy application to the Labor Relations Commission within three months.

This article is general information and does not replace labor or legal advice on an individual case. The level of discipline and the validity of a rule depend on the circumstances, so please confirm with the Ministry of Employment and Labor counseling center (1350) or a labor attorney or lawyer.