Refusing Permanent Employment After Probationary Period

Many employers in Korea treat the probationary period as a no-risk trial: if the new hire does not work out, the company simply consider declining to make the hire permanent. But under Korean law, declining to confirm a probationary employee would constitute a dismissal, not a passive non-renewal.

A broader standard — but not without limitations

Here is the part employers tend to over-read. The justification standard for refusing permanent employment is more lenient than for an ordinary dismissal.

But "broader" is not "anything goes." The grounds must be objective, must connect to a genuine assessment of fitness for the role, and must be supported by a real evaluation process. Evaluations that are arbitrary, relative (ranking employees against one another rather than against the role's requirements), or assigned by quota have been struck down.

The written-notice trap

The most common reason a probation refusal is overturned has nothing to do with the substance of the grounds. It is procedure. LSA requires that any dismissal be delivered in writing, stating both the grounds and the timing.

The three-month advance-notice point

A separate procedural rule is the advance-notice requirement: an employer must give at least 30 days' advance notice of dismissal, or pay 30 days' ordinary wages in lieu. This requirement does not apply where the employee's continuous service is less than three months.

However, this exception waives only the advance-notice obligation. It still needs to fulfill the just-cause requirement. "Under three months" does not mean "terminate at will."

A short checklist before refusing

Confirm the probation period is clearly stated in a signed contract and explained to the employee.
Document the evaluation against the role's requirements — objective criteria, not quotas or peer ranking.
Record any warnings and the opportunity to correct.
Deliver the refusal in writing, stating specific grounds and the effective date
Check continuous service: under three months, no advance notice; at or beyond three months, give 30 days' notice or pay in lieu.
Keep the file — the employer carries the burden of proof.

A probationary period gives a Korean employer real and useful flexibility. It is not, however, a license to part ways without grounds or without process. The companies that get this wrong are usually the ones that had good reasons and simply failed to write them down.

This article is provided for general information and does not constitute legal advice. Specific situations should be assessed on their own facts.

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