Korean Separation Agreements: 10 Clauses to Check Before Signing

What the agreement settles

A separation agreement (also called a mutual termination or resignation agreement) records the end date, what you will be paid and when, which claims you give up and what obligations continue after you leave. Once signed, it binds you, subject to mandatory law and the rules on validity and interpretation. An oral promise that is not in the document is hard to prove later. Many foreign-invested companies use a global template in English; check whether there is a Korean version and which version prevails.

The 10 clauses

The release clause

A clause in which you agree not to bring any claim relating to your employment is an agreement not to sue. The Supreme Court treats such an agreement as valid where it concerns rights the parties could dispose of, relates to a specific legal relationship and covers situations that could be foreseen when it was signed (98Da63988). It upheld a confirmation, signed on receipt of a separation payment, that the employee would raise no objection to the termination (2000Da51919), and in another case rejected arguments that a no-claims term was a mere formality or had been imposed unfairly (2005Da3991).

Do not sign on the assumption that a broad release can be undone later. Arguments that an agreement was not genuinely intended, was obtained by coercion or is grossly unfair have to be proved by the person making them. If you know of an unpaid-overtime, bonus, equity or work-injury issue, either resolve it in the agreement or list it as excluded.

A release or settlement can also affect a later application to the Labor Relations Commission, including whether any dismissal dispute remains. If you are considering an application, decide before signing, and do not let the three-month deadline pass while assuming that the clause either settles everything or has no effect.

Severance cannot be waived in advance

The claim to statutory severance arises when the employment ends. Giving it up in advance is void as contrary to mandatory law, including an agreement made during employment that monthly pay “includes severance” or that severance is paid in instalments with salary other than through a lawful mid-term settlement (Supreme Court en banc 2007Da90760; 2010Da95147). Whether amounts already paid under such an arrangement must be returned or can be set off depends on whether they were genuinely separate from wages.

Once the employment has ended, an employee can validly give up a severance claim that has already arisen; the Supreme Court upheld such a waiver signed months after leaving (2018Da21821). A release of severance signed while you are still employed is likely to be treated as an advance waiver of a claim that has not yet arisen. An advance waiver, or an advance promise not to sue for severance, is void (97Da49732). By contrast, a confirmation signed after you leave that everything has been paid can give up any shortfall. Either way, have the statutory amount calculated and listed in the agreement before you sign.

• How severance pay is calculated

The reason for leaving and unemployment benefits

Whether you can receive job-seeking benefits depends on the actual reason you left, which the Employment Center assesses. When the employment ends, the employer reports the loss of insured status with a reason code and, if you apply for benefits, issues a separation certificate (이직확인서) within 10 days of your request (Employment Insurance Act, Article 42(3); Enforcement Rule, Article 82-2).

Ask that the agreement describe what actually happened, for example a recommendation to resign because of a reorganisation, and that the company report consistently. Do not ask the company to state a reason that is not true: where benefits are obtained by fraud in collusion with the employer, the employer is jointly liable for repayment (Article 62(3)) and the employee faces repayment and additional charges. The Employment Insurance Review Committee has also held that the classification of the reason for leaving is not something the parties can settle between themselves (2024 Decision No. 32).

• Unemployment benefits in Korea for foreigners

Non-compete clauses

A non-compete is void if it excessively restricts your freedom to choose an occupation or unreasonably restricts competition. The Supreme Court weighs the employer’s legitimate interest (such as trade secrets, confidential know-how or customer relationships), your position, the period, territory and activities restricted, whether compensation is provided, the circumstances of your departure and the public interest (2009Da82244). Lack of compensation is one factor, not an automatic ground of invalidity.

In a negotiated exit you can ask to delete the clause, narrow it to named competitors and specific roles, shorten it or add compensation. If the company’s real concern is confidential information, a confidentiality clause may already protect it.

Confidentiality, non-disparagement and repayment terms

Ask for carve-outs allowing you to describe your role and achievements to future employers, to make statements required by law and to communicate with government authorities, the Labor Relations Commission, courts and your own advisers. Check whether a breach triggers a fixed penalty and whether it is capped.

The Labor Standards Act prohibits fixing in advance a penalty or damages for breach of the employment contract (Article 20). A term requiring you to pay a set sum, or to return wages, simply because you leave before an agreed date is void; a term requiring you to repay training costs the employer advanced largely for your benefit can be valid if the amount and the required period of service are reasonable (Supreme Court 2006Da37274; 2001Da53875). Costs the employer would bear anyway, such as the expenses of an overseas posting ordered for its business, cannot be recovered in this way (2001Da53875). Whether a signing bonus must be returned depends on whether it was only an inducement to join or also payment for committing to a set period, judged from the wording and circumstances (2012Da55518). A fixed penalty for breaching a confidentiality or non-disparagement term after you leave is a separate question; a court can reduce an excessive amount of agreed damages (Civil Act, Article 398(2)).

Equity, bonus and the end date

Equity awards from a foreign parent company are usually governed by the plan’s own terms, which often forfeit unvested awards on leaving. Identify which entity is making any promise about equity and whether the signatory has authority to bind it, and distinguish an amendment to the award from a separate cash payment by the Korean employer to replace its value. Check the bonus rules for conditions tied to being employed on a payment date and whether the end date falls before or after it.

Distinguish the last working day, the legal end date, the date insured status is lost (the day after the employment ends) and your immigration deadlines. If the company proposes paid garden leave, the employment and its obligations normally continue until the legal end date; a termination followed by payments in instalments is different. Confirm which date the company will report.

What to ask for in writing

• “Please provide the draft agreement and the documents it refers to, and confirm the deadline for my response in writing.”
• “Please list final wages, severance pay and unused leave separately from the separation payment, with the calculation.”
• “Please describe the actual reason for my departure and confirm that the separation certificate will give the same reason.”
• “Please specify which claims are released and list the following as excluded: …”
• “Please limit the non-compete to [period], [named competitors] and [role], or delete it.”

Frequently asked questions

How the initial review works

• Send a short description, your current country and time zone, and any deadline. Please wait for document-transfer instructions before sending identity documents.
• The attorney checks the requested scope and any conflict of interest, then proposes the review, fee and expected delivery date by email. A video consultation in English can be arranged by appointment.
• The agreed initial review includes an English summary of the issues, missing documents and recommended next steps. Depending on the scope, it may also include a document checklist or a list of steps to take with each authority.
• Fees depend on the records and questions to be reviewed. Any filing, translation, certification, government charges or continuing work is identified separately in the proposal. Sending an inquiry does not start a paid engagement.

Scope and sources

General information on Korean law in force on 1 October 2026 and the Supreme Court and Employment Insurance Review Committee decisions cited. The effect of an agreement depends on its full wording and on how it was negotiated. Tax treatment of a separation payment depends on its nature and is outside this guide.

• Asked to resign: the full sequence
• How severance pay is calculated
• Unfair dismissal and the three-month deadline
• Book a clause-by-clause review
• 권고사직 합의서 서명 전 10조항 (in Korean)
• Supreme Court 2018Da21821 (Korean text)
• Supreme Court 98Da63988 (Korean text)
• Supreme Court en banc 2007Da90760 (Korean text)
• Supreme Court 2009Da82244 (Korean text)