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The employer must also consider whether the basis for the planned terminations falls under one of the categories set out in Article 41. Staff reductions may only be supported by one of the grounds set forth in either the Labor Law or the ECL; namely, restructuring pursuant to the Enterprise Bankruptcy Law; serious operational or production difficulties; a change in production method or automation of a business process through technical innovation, and a suitable alternative cannot be agreed upon with the employee despite consultation; or another major change in the objective circumstances of the employer which were relied upon at the time of the conclusion of the employment contracts, redering them unable to be performed (for example, where there is a departmental reorganization and the employee’s original job no longer exists).
If the employer’s situation does fall under one of these gounds, then it must consider its list of employees are subject to protection from termination. Contrary to the way in which many MNCs carry out the selection process, the ECL prescribes specific provisions for the retention of employees without regard for employee performance or job function. Rather, the ECL provides specific perferences with respect to who may be made redundant: employees (a) with comparatively longer-term fixed-term employment contracts,(b)with open-ended employment contracts, and (c) who are the sole wage earners in the household and support an elderly person or a minor. Hence, deciding who is eligible for a workforce reduction requires careful investigation and inquiry in order to ascertain who fits into these categories.