The Seoul Administrative Court has supported the bank in dismissing a long-service employee for participating in ‘cryptocurrency gambling games,’ which the bank had felt that the action of the employee compromised professional ethics and could affect organizational effectiveness.
An employee who has been with the bank since 1997 and held the position of head of lending at a branch filed a lawsuit against the termination. However, the court ultimately observed that the bank’s actions were reasonable, considering the bank’s standard of conduct and the gravity of the employee’s misconduct.
In 2022, the bank launched an investigation that led to the dismissal of the branch lending manager. As indicated by the bank’s internal audit during the investigation, the person had been participating in online crypto-gambling games that are unlawful in South Korea. The bank also accused the employee of engaging in illegal money-lending activities with loan clients. The employee contested these findings, arguing in court that their gaming activities occurred outside of work hours and that they did not convert crypto assets into fiat currency.
The former employee also maintained that they had never obtained unfair advantages or shown favouritism in private financial transactions with clients. Despite these defenses, the Seoul Administrative Court upheld the bank’s stance, citing the employee’s activities as grounds for “undignified behaviour” and justifying the dismissal.
Justice Kang Jae-won, presiding over the case, explained that the bank’s disciplinary action was appropriate given the nature of the employee’s activities and the standards of conduct expected in the financial industry. The court emphasized that even if gambling occurred outside of work hours, it remained an “undignified” practice for bank employees. In addition, the judge noted that the employee’s gambling activities, which reportedly led to financial losses, could have impacted job performance.
The court underscored that gambling by financial industry employees increases the risk of misconduct, such as embezzlement, as individuals might seek to cover losses through inappropriate means. Justice Kang stated that the risk factors, combined with the potential negative impact on workplace efficiency, warranted the disciplinary action.
The recent verdict of the Seoul Administrative Court can well be seen as an environment of the judiciary towards adopting a rigid policy as far as the professionals working in the financial sector are concerned. The ruling confirmed the basic principle of compliance with high ethical standards by bank employees as a necessary principle to ensure the population’s confidence in banks.
Additionally, in South Korean laws regulating crypto gambling, the court decision specifies the professional standards of behaviour required of banking professionals who handle clients’ funds.