IKEA Korea faces demotion allegations after parental leave — and President Lee is taking notice

IKEA Korea is facing allegations that it demoted and pressured an employee to resign after she returned from parental leave — a controversy that has drawn a direct rebuke from President Lee Jae-myung, who said "outdated management practices cannot be tolerated."

According to industry sources, the Anyang branch of the Ministry of Employment and Labor is investigating IKEA Korea CEO Isabel Pujol on suspicion of violating the Equal Employment Opportunity and Work-Family Balance Assistance Act. The probe was launched after an employee filed a complaint alleging she faced adverse personnel action upon returning from parental leave.

At the heart of the dispute is a corporate restructuring that took place after the employee's parental leave. The employee, who filed the complaint with the ministry, said her previous position was eliminated under the pretext of an organizational merger and that she was offered the choice of moving to a lower-ranking role or leaving the company.

Under current law, employers are prohibited from dismissing or otherwise disadvantaging workers on the grounds of parental leave. In principle, employees must be reinstated to the same duties or a position with equivalent pay upon returning. However, how those rules apply when a company undergoes restructuring can depend on the specific facts of each case.

As the controversy grew, President Lee weighed in directly, criticizing IKEA Korea's conduct. Writing on X (formerly Twitter) on Friday, Lee said, "Just as Korean companies should not engage in anti-labor or unreasonable conduct abroad, foreign companies must not do so here either."

IKEA Korea CEO and Chief Sustainability Officer Isabel Pujol. [Yonhap]

Lee said there had been cases in the past where global companies that operated as model employers in other countries drew criticism for running anti-labor and opaque operations in South Korea in particular.

He added that such conduct belonged to an era when the Korean government pursued anti-labor policies and was mired in corruption. "But now that South Korea is emerging as a model society and model government leading the world, such outdated management practices cannot be tolerated," he said.

He said, "We will investigate thoroughly, and if the allegations are confirmed, we will take strict action in line with international standards."

IKEA Korea has denied the allegations in full. The company said the restructuring was not a Korea-specific measure but part of a global reorganization. It also said the personnel changes were not directed at any particular individual, and that the employee in question currently retains the same title and duties with no change to her employment status.

The company said it applied the same principles to all employees affected by the restructuring. "We provided internal job opportunities, job exploration support and consultations with the HR team to help employees find new roles," IKEA Korea said, adding that "all related procedures were carried out in accordance with domestic law and internal policy."

boo@heraldcorp.com