Knowledge · HR & Labor

Rules of Employment · Drafting and Disadvantageous Changes

Rules of Employment

📂HR & Labor⏱2-min read📊Advanced🔗9 related

What are rules of employment?

In one line
Internal rules that set a workplace’s working conditions and conduct standards. Workplaces above a certain size must draft and file them, and employee consent is required to change them disadvantageously.
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⚡ Summary in 3 lines
  • The basic internal regulation on working conditions and conduct
  • Disadvantageous changes require majority employee consent
  • Rules that aren’t posted or communicated are hard to rely on

What rules of employment really change is the limit of individual agreements. Even if the CEO and an employee signed a separate deal, any term below the rules of employment is void to that extent, and the standard set by the rules takes its place. Conversely, an annual leave bonus or condolence leave written in the rules applies to everyone, even if the employment contract doesn’t mention it. So editing a single line of the rules is not a paperwork fix but a change that touches the working conditions of hundreds of people at once.

The procedure splits into two tracks. For changes that benefit employees or are neutral, consulting the majority union or a majority of employees is enough, but a change to employees’ disadvantage requires their consent. Hearing employees’ opinions and obtaining their consent are entirely different procedures. Whether a change is disadvantageous is judged by the employee group, not by the company’s circumstances. When advantages and disadvantages are mixed, as in an overhaul that raises one item while cutting another, the items are bundled and compared as a whole. Shortening the retirement age, abolishing allowances, and adding grounds for disciplinary action are generally treated as disadvantageous changes.

The way consent is obtained is itself a requirement. Employees must be given a chance to gather and discuss without employer involvement before a majority vote is confirmed, and signatures collected by a department head going around with an approval folder are often overturned later on the grounds that they were not given freely. Workplaces with 10 or more regular employees must also file the rules, but filing is an enforcement requirement, not a condition of validity, so a filing receipt does not cure a defect in consent. Standards and requirements may be amended, so check the latest laws and regulations.

The most common point of failure in practice is the mistaken belief that “no objection means consent.” If you send a company-wide email, get no replies, and treat that as implied consent, the whole clause can be shaken years later in a severance or allowance lawsuit. If the change is invalidated, the pre-change rules revive for existing employees, creating retroactive payment liability and a two-tier structure in which standards differ by hire date within the same company. Keep in mind, too, that internal regulations, bylaws, and guidelines count as rules of employment whatever they are called, as long as they set working conditions.

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💡 In plain English
It’s like an apartment complex’s management bylaws. Bylaws amended without residents’ consent can be challenged even if they’re posted on the wall.
Why it matters in practice
Revising the rules looks like paperwork, but the procedure is what matters. A revision made without consent isn’t a revision; it’s a dispute waiting to happen.
Origin and sources

Under Korea’s Labor Standards Act, workplaces above a certain headcount of regular employees must draft and file rules of employment. Any change that is disadvantageous to employees requires the consent of a labor union representing a majority of employees or, absent one, of a majority of employees (Articles 93 and 94, among others).

Source · Labor Standards Act, Articles 93 and 94
An example

This is the story of Company A, an auto parts manufacturer with 320 employees and annual revenue of about KRW 80 billion (≈ US$59,853,400). To address ordinary wage issues, it moved its 600% regular bonus into base pay and abolished its seniority allowance, planning the pay system overhaul on a four-month timeline. The problem: only 138 employees were union members, so union consent alone would not complete the process. (Hypothetical example)

  1. When the HR head laid out the proposed overhaul item by item, total pay rose by KRW 1.8 million (≈ US$1,350) per person per year, but the seniority allowance disappeared. The company’s labor attorney drew the line: even if the total goes up, abolishing an allowance is a change to employees’ disadvantage.
  2. The 138 union members were only 43% of all employees, short of the majority-union requirement. So the labor-management council settled on “getting consent from at least 161 of all 320 employees” and shifted to a collective consent procedure.
  3. The company held 12 briefing sessions across three factory lines and headquarters. At the union branch head’s request, team leaders stayed out of the room, and each group got 30 minutes for a discussion among employees only.
  4. Because the 47 employees on two-shift schedules couldn’t attend daytime sessions, the company added two sessions during the night shift. The HR planning manager promised that “votes against will be counted in full,” and a secret written ballot followed.
  5. With 91% turnout (291 employees) and 214 votes in favor, the company secured majority consent, filed the revised rules with the local Ministry of Employment and Labor office, and posted them on the intranet. It kept the briefing materials and ballots on file, and in the first year after taking effect there were zero lawsuits or complaints challenging their validity.
Related terms
Employment Contract · Required TermsA contract in which employee and employer set working conditions such as pay and working hours. Items specified by law must be stated explicitly and delivered in writing.Compensation System · Job-Based Pay vs. Seniority-Based PayThe framework that determines what pay is based on. The two main types are seniority-based pay, which rises with years of service, and job-based pay, which is set by the value of the job.Disciplinary Action and Dismissal: Procedure and JustificationThe process of imposing sanctions for rule violations or performance problems. It holds up only when both the grounds and the procedure are legitimate.Employee Representative · Written AgreementThe person who represents employees in concluding written agreements with the employer on matters set by law, such as introducing working-hour systems. A valid selection process determines whether the agreement is effective.Labor-Management CouncilA statutory body made up of an equal number of employee and employer representatives that consults on management and labor matters. It must be established whether or not a labor union exists.Labor Inspection · Responding to InspectionsThe process in which labor inspectors from the Ministry of Employment and Labor check a workplace’s compliance with labor laws, through regular and ad hoc inspections and self-assessment.4.5-Day Work Week · Reduced Working HoursA work arrangement that cuts actual hours worked, for example by working only half a day on one of five days or taking one day off every other week. It is not a statutory system but one companies design through labor-management agreement.Job Grade Restructuring · Simplifying Grades and Unifying TitlesAn HR system overhaul that reduces multi-tier grades (staff, assistant manager, manager, deputy general manager, general manager) and unifies titles. Grade, position, role, and title must be designed separately so that pay and promotion systems move together.Year-End Collective Leave and Annual Leave Substitution Agreements · Procedures for Substituting Holidays and Using Annual LeaveA system in which the whole company takes several days off at year-end, counting those days as annual leave or swapping public holidays for other days. A written agreement with the employee representative is required; without one, the shutdown counts as a business suspension at the company’s initiative.
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Last updated 13 Sep 2026 · Reviewed by John Kim

FAQ

The Labor Standards Act sets the criteria based on the number of regular employees, and the criteria and procedures may be amended. Please check the latest statutes and Ministry of Employment and Labor guidance before applying them.
Many cases are hard to call, such as changes that favor employees in some respects and disadvantage them in others. In such cases it is safer to go through the consent procedure, and for significant changes, have a labor law specialist review them.
The general rule is consent from the labor union if it represents a majority of employees, or otherwise from a majority of employees. Disputes often turn on whether opinions were gathered freely, without company interference, so keeping a record of the procedure is important.
No. Employers must post the rules or otherwise communicate them so employees can know their contents. Rules that haven’t been communicated are hard to use as grounds for disciplinary action and the like.