Deregulation of dismissal law and unjust dismissal in Korea

Using data of Korean court cases, related to the unjust dismissal claims between 1987 and 2000, this paper examines how the deregulation of Korean dismissal law in 1998 affects the incidence of unjust dismissals. Logit estimation to identify the determinants of unjust dismissal rate in Korea shows that deregulation of the dismissal law led to a higher incidence of unjust dismissals. Reasons for this empirical result were explored. These included misinterpretations of the law on the part of employers, due to the disorderly process of legislation and poor coordination in industrial relations, changes in court’s adjudication criteria influenced by socio-economic factors, and finally misalignment of law and economic conditions. © 2007 Elsevier Inc. All rights reserved. JEL classification: K4; J5