Ruling recognizing severance pay only for work after the industrial trainee period ended

Who this helps

This may help people who worked as foreign industrial trainees and kept working at the same company after the training period ended.

Case overview

Court

Busan District Court

Posted on original board

Jun 28, 2006 (Wed)

Topic

Wages, Minimum Wage & Severance Pay

Original title (Korean)

외국인 산업연수생에게 퇴직금을 지급하여야 하는지 여부(한정 적극)

Two Filipino nationals entered Korea as foreign industrial technical trainees and worked at a company as industrial trainees for 2 years. After the training period ended, they kept working at the same company until 15 June 2003, then left the company. They claimed from the company severance pay including the period worked as trainees, and compensation for emotional distress over discrimination in not paying severance pay.

Can severance pay be claimed for time worked as a foreign industrial trainee?

Two Filipinos entered as foreign industrial technical trainees and worked at a company for two years. They kept working there after the training period until June 15, 2003, then left. They claimed severance pay including the trainee years, plus damages for discrimination. The court held that the severance rules of the Labor Standards Act did not apply to the trainee period.

How the court ruled

The court held that the severance pay provisions of the Labor Standards Act did not apply to the period worked as industrial trainees. It found that an implied employment contract was formed between the company and the two people from the day after the training period ended until the date of leaving, and ordered payment of severance pay and delayed-payment damages for that period. It did not accept the claim for compensation for emotional distress, because the duty to pay severance pay arises after leaving the job, so discrimination during employment could not be found.

What to check in a similar situation

Which period counts as the training period for a severance claim can be checked with the courts or the government labor offices.

• Minimum wage calculator
• Severance pay calculator
• Unpaid wages and work injuries
• Contacts: Ministry of Employment and Labor helpline 1350

Terms explained

industrial trainee

A foreigner who comes to learn skills through training at a company. In this ruling, the severance rules of the labor law were not applied to the training period.

implied employment contract

A work relationship treated as a contract from how the parties acted, even without a written agreement.

delay damages

Extra money added when an amount owed was not paid on time.

damages for emotional distress

Money claimed for mental suffering, such as from discrimination.

More rulings on this topic

• Ruling that a foreign industrial trainee who did the same work as Korean workers can also receive severance pay · Busan District Court
• Appeal Ruling: Two Foreign Industrial Trainees Seek Minimum Wage Difference · Seoul Western District Court

See all 3 rulings on Wages, Minimum Wage & Severance Pay →

Frequently asked questions

Who brought the case?

Two Filipinos who entered as foreign industrial technical trainees and worked at a company.

How did the court rule?

It found an implied employment contract from the day after training ended until retirement and recognized severance pay and delay damages for that period. It rejected the damages claim because the duty to pay severance arises after retirement, so discrimination during employment could not be found.

Does this result apply to every similar case?

No. It is the court's decision in this case and does not apply as is to other cases.