Open Decision Ledger · Labour & industrial accidents
Urgent managerial need, its meaning and the time it is judged
Supreme Court, June 9, 2022, 2017Du71604 (judgment)
Case name: 부당해고구제재심판정취소
Official text on the National Law Information Center
Question
Under Article 24(1) of the Labour Standards Act, what does the urgent managerial need required for a dismissal for managerial reasons mean, and is it judged by the circumstances at the time of the redundancy dismissal?
Holding
Urgent managerial need is not confined to warding off bankruptcy. It also covers a headcount reduction needed to meet in advance a crisis that may yet come, provided the reduction is objectively rational, and it is judged on the circumstances at the time of the redundancy dismissal. Applying that rule, the Supreme Court held that the company faced a sharp business decline and a liquidity crisis that could not readily be expected to ease within a short period, that cutting staff was objectively rational, and that the court below had misapprehended the law and left the matter unexamined.
Summary of the holding, verbatim
긴박한 경영상 필요란 반드시 기업의 도산을 회피하기 위한 경우에 한정되지 않고, 장래에 올 수도 있는 위기에 미리 대처하기 위하여 인원 감축이 필요한 경우도 포함되지만, 그러한 인원 감축은 객관적으로 보아 합리성이 있다고 인정되어야 한다.
Unofficial English translation
An urgent managerial necessity is not necessarily limited to cases of avoiding the bankruptcy of the enterprise, and also includes cases where a reduction of personnel is required in order to respond in advance to a crisis that may arise in the future, but such reduction of personnel must be regarded as reasonable when viewed objectively.
Disposition
Reversed and remanded Stated in the decision
원심판결을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Seoul High Court.
Form of the test
Elements stated Stated in the decision
이와 같은 긴박한 경영상 필요가 있는지는 정리해고를 할 당시의 사정을 기준으로 판단해야 한다.
Unofficial English translation
Whether such an urgent managerial necessity exists must be determined on the basis of the circumstances at the time the workforce restructuring dismissal is carried out.
Factors
- 사용자가 경영상 이유로 근로자를 해고하려면 긴박한 경영상 필요가 있어야 한다
- 기업의 도산을 회피하기 위한 경우에 한정되지 않고
- 장래에 올 수도 있는 위기에 미리 대처하기 위하여 인원 감축이 필요한 경우도 포함되지만
- 그러한 인원 감축은 객관적으로 보아 합리성이 있다고 인정되어야 한다
- 정리해고를 할 당시의 사정을 기준으로 판단해야 한다
Unofficial English translation
• in order for an employer to dismiss an employee for managerial reasons, there must be an urgent managerial necessity
• it is not necessarily limited to cases of avoiding the bankruptcy of the enterprise, and
• it also includes cases where a reduction of personnel is required in order to respond in advance to a crisis that may arise in the future, but
• such reduction of personnel must be regarded as reasonable when viewed objectively
• it must be determined on the basis of the circumstances at the time the workforce restructuring dismissal is carried out
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2004. 11. 12. 선고 2004두9616, 9623 판결, 대법원 2013. 6. 13. 선고 2011다60193 판결 참조
Unofficial English translation
Supreme Court Decision 2004Du9616, 9623 decided November 12, 2004, Supreme Court Decision 2011Da60193 decided June 13, 2013, see
Decisions referred to
대법원 2004. 11. 12. 선고 2004두9616, 9623 판결, 대법원 2013. 6. 13. 선고 2011다60193 판결
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
If the business position had clearly improved by the date of the dismissal, could a court still find urgent managerial need on the strength of a diagnosis report made months earlier?
The judgment of the Seoul High Court on remand will show how the other requirements of the redundancy dismissal are examined once the urgent managerial need is established. Any amendment to Article 24 of the Labour Standards Act, or a later Supreme Court decision changing the moment at which urgent managerial need is judged, requires this entry to be read again.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-25
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 7 of the 8 axes; the readings differed on axis 8 (open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “If the business position had clearly improved by the date of the dismissal, could a court still find urgent managerial need on the strength of a diagnosis report made months earlier?” vs Independent “What evidence would establish that a workforce reduction responding to a potential future crisis was objectively reasonable at the time of dismissal?”
The primary asks whether a stale diagnosis report can support need after the business has improved; the independent asks what evidence would prove that a future-crisis reduction was reasonable.
긴박한 경영상 필요란 반드시 기업의 도산을 회피하기 위한 경우에 한정되지 않고, 장래에 올 수도 있는 위기에 미리 대처하기 위하여 인원 감축이 필요한 경우도 포함되지만, 그러한 인원 감축은 객관적으로 보아 합리성이 있다고 인정되어야 한다.Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Seoul High Court, in its judgment of 26 October 2017 (2017Nu48910), held that the redundancy dismissal of 16 October 2015 lacked the urgent managerial need required by Article 24 of the Labour Standards Act. It therefore treated the dismissal as an unjust dismissal without examining whether the other requirements, such as a fair selection standard and sincere consultation with the union, were met.
Supreme Court standard: The Supreme Court held that the court below had misapprehended the law on urgent managerial need or had failed to examine what needed examining, and that the appeal on that point was well founded. It took the record to show a sudden fall in demand for oil country tubular and line pipe, a large drop in revenue and operating profit, total borrowings roughly doubled, a borrowings-to-equity ratio rising from 87% to 224%, an accounting firm's diagnosis proposing to cut production workers from 248 to 65, and recognition of the business difficulty by the participants and the union chairperson. It reversed the whole judgment and remanded the case to the Seoul High Court.
Distinguishing conditions
- An instance in which the headcount reduction is not objectively rational, since pre-emptive action on a future crisis counts only where it passes that test.
- A dismissal whose urgent managerial need is tested on a period other than the circumstances at the time of the dismissal, since that is the moment the Court fixed.
- A dispute over the remaining requirements of a redundancy dismissal, such as a fair and reasonable selection standard or sincere consultation, which the court below never reached.
Record verification notes
Build the file on the position as it stood on the dismissal date, and separate what was known then from what later accounts merely confirmed, as the Court did with the 2015 audit report against the second diagnosis report. Then test the size and shape of the cut against the diagnosis and the reduction actually made, since the Court relied on a target of 150 set below the recommended 183 and on only three dismissals after voluntary redundancy. Remember that the other requirements were never examined, so this decision settles none of them.
From the official text
Points at issue
근로기준법 제24조 제1항에 따라 사용자가 경영상 이유로 근로자를 해고하기 위한 요건으로서 ‘긴박한 경영상 필요’의 의미 및 긴박한 경영상 필요가 있는지 판단하는 기준 시점(=정리해고할 당시)
Unofficial English translation
The meaning of 'urgent managerial necessity' as a requirement for an employer to dismiss an employee for managerial reasons under Article 24 (1) of the Labor Standards Act, and the point in time serving as the standard for determining whether an urgent managerial necessity exists (= at the time of the workforce restructuring dismissal)
Summary of the holding
근로기준법 제24조 제1항에 따르면 사용자가 경영상 이유로 근로자를 해고하려면 긴박한 경영상 필요가 있어야 한다. 긴박한 경영상 필요란 반드시 기업의 도산을 회피하기 위한 경우에 한정되지 않고, 장래에 올 수도 있는 위기에 미리 대처하기 위하여 인원 감축이 필요한 경우도 포함되지만, 그러한 인원 감축은 객관적으로 보아 합리성이 있다고 인정되어야 한다. 이와 같은 긴박한 경영상 필요가 있는지는 정리해고를 할 당시의 사정을 기준으로 판단해야 한다.
Order
원심판결을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Seoul High Court.
Provisions referred to
근로기준법 제24조 제1항
Read 2026-10-25 · Cross-read 2026-10-25. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
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