[Corporate Advisory] Legal Review of Employment Restrictions Related to Side Jobs
Article posted in 2023-07-20 18:48:09 | VEAT
Law firm Veat reviewed the matter comprehensively, having received a referral from Internet service platform A’s request.
A’s representative inquired about whether they could hire an employee who was working under a blanket wage system at a company (B Company) where the company’s major shareholder served as the president and shareholder.
Law firm Veat assessed the matter based on specific conclusions regarding whether the employee’s side business was restricted, and whether it was appropriate to provide personnel to another company at a very low cost, and comprehensively reviewed “Labor Standard Act,” “Act on Monopoly Regulation and Fair Trade,” and “Penal Code” etc. to provide legal advice regarding the possibility of prohibited actions.
Specifically, Law firm Veat reviewed internal regulations to examine the possibility of simultaneous employment between A and B Companies, and guided the client on whether there was any liability for breach of duty of loyalty based on the detailed content of the case.
Side business restriction means restricting an employee from working in another business while employed by a company, or from engaging in other work. In private companies, restrictions are often established through internal regulations such as employment rules or employment contracts. However, a precedent exists (Seoul High Court, July 4, 2002, Case No. 2001nu13098) stating that it is inappropriate to discipline an employee without restriction simply because they violate the duty of loyalty or engage in side business without permission.
When hiring employees, it is necessary to specifically determine the relevant laws such as “Labor Standard Act,” “Act on Monopoly Regulation and Fair Trade,” and “Penal Code,” and to consider internal regulations such as company internal rules. Therefore, please seek assistance from a legal expert with extensive experience in corporate advisory.
Law firm Veat provides legal advice based on its abundant practical experience in addressing various legal issues encountered in operating numerous companies, including employee hiring, and offers “regular legal advisory services” for clients who need regular legal advice.
If you need legal advice while operating a company or require regular legal advice, please contact Law firm Veat.
Thank you.
Law firm Veat