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Case on Unfair Dismissal Relating to “Non‑Existence of Expectation of Renewal (Request for Downsizing by Residents’ Representative Council)” (Unfair Dismissal 85)
- Date2026/01/11 21:33
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[Case Information]
- Case name: Case on unfair dismissal relating to “Non‑existence of expectation of renewal (request for downsizing by residents’ representative council)”
- Date of decision:
- Case number: First‑instance decision upheld
- Decision‑making body: Central Labor Relations Commission 2025Buhae1090 ○ ○ ○ Application for re‑examination for remedy of unfair dismissal
2025.11.20
- Summary of outcome: Whether an expectation of renewal of the employment contract is to be recognized. The employee argued that an expectation of renewal existed, on the grounds that his/her fixed‑term employment contract had been renewed three times and that his/her predecessor had continuously performed the same duties for approximately nine years with the contract being renewed annually.
1. Legal Implications
Ⅰ. Overview of the Case
This case concerns an employee working under a fixed‑term employment contract who, upon the expiry of the contract term and the employer’s refusal to renew, filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal.
The employee argued that he/she had a legitimate expectation of renewal of the employment contract, relying on the fact that his/her own contract had been renewed three times and that his/her predecessor had continued to work for approximately nine years through annual renewals.
The employer, on the other hand, contended that the employment relationship had simply ended upon expiry of the contract term, relying on the work rules that provided for automatic retirement upon expiry of the contract term and automatic retirement upon a request for downsizing by the residents’ representative council. The employer prevailed both at first instance and on re‑examination before the Central Labor Relations Commission.
Ⅱ. Issues in Dispute
The key issue in this case is:
“Where a fixed‑term employee has had his/her employment contract renewed multiple times, does the employee have an expectation of renewal even if the work rules do not separately stipulate criteria or procedures for renewal of the contract, and, if so, does a refusal to renew the contract constitute unfair dismissal?”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The decision panel in this case held as follows: (i) the work rules contain no provisions at all regarding criteria or requirements for renewal and, on the contrary, expressly stipulate automatic retirement upon expiry of the employment contract and automatic retirement upon a request for downsizing by the residents’ representative council; (ii) the terms of each employment contract concluded with the employee were short and irregular, making it difficult to find that any trust had been formed that the contract would continue to be renewed on a continuous and stable basis in the future; (iii) it appears that the parties had a mutual understanding, in line with the Act on the Protection, Etc. of Fixed‑Term and Part‑Time Employees, that the total period of employment would not exceed two years so as to avoid conversion to an employment contract with no fixed term; (iv) in circumstances where the employer has determined whether to renew solely at its discretionary judgment without any stipulated conditions or procedures for renewal, it is difficult to recognize an expectation of renewal; (v) the employee was aware of the organizational restructuring and the resulting possibility of contract expiry in advance; and (vi) as a rule, the employer’s discretion in personnel management as to whether to employ fixed‑term workers should be respected.
In light of the above, the Commission found that it was difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed in this employment relationship.
The Commission held that the termination in this case constituted automatic retirement upon expiry of the contract term, rather than a refusal to renew the employment contract, and therefore did not amount to unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to obtain a remedy for unfair dismissal, it is not sufficient to show merely that the contract has been renewed several times. The employee must prove, through the work rules, the employment contract, and established practices, that a relationship of trust has been formed to the effect that “the contract will continue to be renewed if certain conditions are met.”
In particular, where the work rules explicitly provide for automatic retirement upon expiry of the contract term or upon a request for downsizing, and where short and irregular contract terms have been repeatedly used, it is very difficult to have an expectation of renewal recognized.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s perspective, when utilizing fixed‑term employees, it is important to clearly stipulate in the work rules and employment contracts the contract term, automatic retirement upon expiry, and the standards for handling cases where a downsizing request is made, and to operate the system consistently in accordance with those provisions.
Conversely, if the employer establishes specific conditions and procedures that may support an expectation of renewal—such as regular evaluation criteria and an obligation to renew where a certain score is achieved—then any subsequent refusal to renew may be evaluated as unfair dismissal. Accordingly, when designing such systems, it is necessary to take into account the possibility of workforce adjustments such as collective redundancies and organizational restructuring.
2. Matters Decided
A. Case Overview and Procedural History
Whether an expectation of renewal of the employment contract is to be recognized. The employee argued that an expectation of renewal existed, on the grounds that his/her fixed‑term employment contract had been renewed three times and that his/her predecessor had continuously performed the same duties for approximately nine years with the contract being renewed annually. However: (i) there are no provisions in the work rules regarding criteria or conditions for renewal; (ii) on the contrary, Article 54(1)3 of the work rules provides for automatic retirement upon expiry of the employment contract, and furthermore, subparagraph 6 of the same article stipulates automatic retirement where a request for downsizing is made by the residents’ representative council; (iii) the contract terms agreed between the parties were short and irregular, making it difficult to find that any trust had been formed that the employment contract could continue to be concluded on a continuous and stable basis in the future; (iv) it appears that the parties had a mutual understanding, in line with the Act on the Protection, Etc. of Fixed‑Term and Part‑Time Employees, that the total period of employment would not exceed two years so as to avoid conversion to an employment contract with no fixed term; (v) where renewal is decided based on the employer’s discretionary judgment without any stipulated conditions or procedures for renewal, it is difficult to recognize an expectation of renewal; (vi) the employee was aware of the organizational restructuring and appears to have recognized that, as a result, the employment contract would expire; and (vii) in light of the need, in principle, to respect the employer’s discretion as to whether to employ fixed‑term workers, it is reasonable to conclude that no expectation of renewal existed with respect to the employment contract in this case and that the employment relationship terminated upon expiry of the contract term.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
Whether an expectation of renewal of the employment contract is to be recognized. The employee argued that an expectation of renewal existed, on the grounds that his/her fixed‑term employment contract had been renewed three times and that his/her predecessor had continuously performed the same duties for approximately nine years with the contract being renewed annually. However: (i) there are no provisions in the work rules regarding criteria or conditions for renewal; (ii) on the contrary, Article 54(1)3 of the work rules provides for automatic retirement upon expiry of the employment contract, and furthermore, subparagraph 6 of the same article stipulates automatic retirement where a request for downsizing is made by the residents’ representative council; (iii) the contract terms agreed between the parties were short and irregular, making it difficult to find that any trust had been formed that the employment contract could continue to be concluded on a continuous and stable basis in the future; (iv) it appears that the parties had a mutual understanding, in line with the Act on the Protection, Etc. of Fixed‑Term and Part‑Time Employees, that the total period of employment would not exceed two years so as to avoid conversion to an employment contract with no fixed term; (v) where renewal is decided based on the employer’s discretionary judgment without any stipulated conditions or procedures for renewal, it is difficult to recognize an expectation of renewal; (vi) the employee was aware of the organizational restructuring and appears to have recognized that, as a result, the employment contract would expire; and (vii) in light of the need, in principle, to respect the employer’s discretion as to whether to employ fixed‑term workers, it is reasonable to conclude that no expectation of renewal existed with respect to the employment contract in this case and that the employment relationship terminated upon expiry of the contract term. /
[See More Related Decisions]
- “‘Non‑Formation of Hiring Decision (Absence of Offer Letter)’ Case on Unfair Dismissal” – Date of decision: – Case number: First‑instance decision upheld
- “‘Dismissal of Application (Non‑Appearance at Hearing)’ Case on Unfair Dismissal” – Date of decision: – Case number: Dismissed
- “‘Disciplinary Sanction Level (Unlawful Brokerage·Receipt of Entertainment)’ Case on Unfair Dismissal”
[Tags]
Unfair dismissal, Non‑existence of expectation of renewal (request for downsizing by residents’ representative council), refusal to renew fixed‑term contract, Labor Law Firm Law&, large labor law firm, Samseong‑dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, “‘Right to Terminate Probation (Three‑Month Probationary Evaluation)’ Case on Unfair Dismissal,” in a new window.
※ The list of decisions relating to non‑existence of expectation of renewal (request for downsizing by residents’ representative council) can be viewed together in the “List of Decisions on Non‑Existence of Expectation of Renewal (Request for Downsizing by Residents’ Representative Council).”
※ Korean version of this case: Korean article
- Case name: Case on unfair dismissal relating to “Non‑existence of expectation of renewal (request for downsizing by residents’ representative council)”
- Date of decision:
- Case number: First‑instance decision upheld
- Decision‑making body: Central Labor Relations Commission 2025Buhae1090 ○ ○ ○ Application for re‑examination for remedy of unfair dismissal
2025.11.20
- Summary of outcome: Whether an expectation of renewal of the employment contract is to be recognized. The employee argued that an expectation of renewal existed, on the grounds that his/her fixed‑term employment contract had been renewed three times and that his/her predecessor had continuously performed the same duties for approximately nine years with the contract being renewed annually.
1. Legal Implications
Ⅰ. Overview of the Case
This case concerns an employee working under a fixed‑term employment contract who, upon the expiry of the contract term and the employer’s refusal to renew, filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal.
The employee argued that he/she had a legitimate expectation of renewal of the employment contract, relying on the fact that his/her own contract had been renewed three times and that his/her predecessor had continued to work for approximately nine years through annual renewals.
The employer, on the other hand, contended that the employment relationship had simply ended upon expiry of the contract term, relying on the work rules that provided for automatic retirement upon expiry of the contract term and automatic retirement upon a request for downsizing by the residents’ representative council. The employer prevailed both at first instance and on re‑examination before the Central Labor Relations Commission.
Ⅱ. Issues in Dispute
The key issue in this case is:
“Where a fixed‑term employee has had his/her employment contract renewed multiple times, does the employee have an expectation of renewal even if the work rules do not separately stipulate criteria or procedures for renewal of the contract, and, if so, does a refusal to renew the contract constitute unfair dismissal?”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The decision panel in this case held as follows: (i) the work rules contain no provisions at all regarding criteria or requirements for renewal and, on the contrary, expressly stipulate automatic retirement upon expiry of the employment contract and automatic retirement upon a request for downsizing by the residents’ representative council; (ii) the terms of each employment contract concluded with the employee were short and irregular, making it difficult to find that any trust had been formed that the contract would continue to be renewed on a continuous and stable basis in the future; (iii) it appears that the parties had a mutual understanding, in line with the Act on the Protection, Etc. of Fixed‑Term and Part‑Time Employees, that the total period of employment would not exceed two years so as to avoid conversion to an employment contract with no fixed term; (iv) in circumstances where the employer has determined whether to renew solely at its discretionary judgment without any stipulated conditions or procedures for renewal, it is difficult to recognize an expectation of renewal; (v) the employee was aware of the organizational restructuring and the resulting possibility of contract expiry in advance; and (vi) as a rule, the employer’s discretion in personnel management as to whether to employ fixed‑term workers should be respected.
In light of the above, the Commission found that it was difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed in this employment relationship.
The Commission held that the termination in this case constituted automatic retirement upon expiry of the contract term, rather than a refusal to renew the employment contract, and therefore did not amount to unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
For an employee to obtain a remedy for unfair dismissal, it is not sufficient to show merely that the contract has been renewed several times. The employee must prove, through the work rules, the employment contract, and established practices, that a relationship of trust has been formed to the effect that “the contract will continue to be renewed if certain conditions are met.”
In particular, where the work rules explicitly provide for automatic retirement upon expiry of the contract term or upon a request for downsizing, and where short and irregular contract terms have been repeatedly used, it is very difficult to have an expectation of renewal recognized.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s perspective, when utilizing fixed‑term employees, it is important to clearly stipulate in the work rules and employment contracts the contract term, automatic retirement upon expiry, and the standards for handling cases where a downsizing request is made, and to operate the system consistently in accordance with those provisions.
Conversely, if the employer establishes specific conditions and procedures that may support an expectation of renewal—such as regular evaluation criteria and an obligation to renew where a certain score is achieved—then any subsequent refusal to renew may be evaluated as unfair dismissal. Accordingly, when designing such systems, it is necessary to take into account the possibility of workforce adjustments such as collective redundancies and organizational restructuring.
2. Matters Decided
A. Case Overview and Procedural History
Whether an expectation of renewal of the employment contract is to be recognized. The employee argued that an expectation of renewal existed, on the grounds that his/her fixed‑term employment contract had been renewed three times and that his/her predecessor had continuously performed the same duties for approximately nine years with the contract being renewed annually. However: (i) there are no provisions in the work rules regarding criteria or conditions for renewal; (ii) on the contrary, Article 54(1)3 of the work rules provides for automatic retirement upon expiry of the employment contract, and furthermore, subparagraph 6 of the same article stipulates automatic retirement where a request for downsizing is made by the residents’ representative council; (iii) the contract terms agreed between the parties were short and irregular, making it difficult to find that any trust had been formed that the employment contract could continue to be concluded on a continuous and stable basis in the future; (iv) it appears that the parties had a mutual understanding, in line with the Act on the Protection, Etc. of Fixed‑Term and Part‑Time Employees, that the total period of employment would not exceed two years so as to avoid conversion to an employment contract with no fixed term; (v) where renewal is decided based on the employer’s discretionary judgment without any stipulated conditions or procedures for renewal, it is difficult to recognize an expectation of renewal; (vi) the employee was aware of the organizational restructuring and appears to have recognized that, as a result, the employment contract would expire; and (vii) in light of the need, in principle, to respect the employer’s discretion as to whether to employ fixed‑term workers, it is reasonable to conclude that no expectation of renewal existed with respect to the employment contract in this case and that the employment relationship terminated upon expiry of the contract term.
3. Gist of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
Whether an expectation of renewal of the employment contract is to be recognized. The employee argued that an expectation of renewal existed, on the grounds that his/her fixed‑term employment contract had been renewed three times and that his/her predecessor had continuously performed the same duties for approximately nine years with the contract being renewed annually. However: (i) there are no provisions in the work rules regarding criteria or conditions for renewal; (ii) on the contrary, Article 54(1)3 of the work rules provides for automatic retirement upon expiry of the employment contract, and furthermore, subparagraph 6 of the same article stipulates automatic retirement where a request for downsizing is made by the residents’ representative council; (iii) the contract terms agreed between the parties were short and irregular, making it difficult to find that any trust had been formed that the employment contract could continue to be concluded on a continuous and stable basis in the future; (iv) it appears that the parties had a mutual understanding, in line with the Act on the Protection, Etc. of Fixed‑Term and Part‑Time Employees, that the total period of employment would not exceed two years so as to avoid conversion to an employment contract with no fixed term; (v) where renewal is decided based on the employer’s discretionary judgment without any stipulated conditions or procedures for renewal, it is difficult to recognize an expectation of renewal; (vi) the employee was aware of the organizational restructuring and appears to have recognized that, as a result, the employment contract would expire; and (vii) in light of the need, in principle, to respect the employer’s discretion as to whether to employ fixed‑term workers, it is reasonable to conclude that no expectation of renewal existed with respect to the employment contract in this case and that the employment relationship terminated upon expiry of the contract term. /
[See More Related Decisions]
- “‘Non‑Formation of Hiring Decision (Absence of Offer Letter)’ Case on Unfair Dismissal” – Date of decision: – Case number: First‑instance decision upheld
- “‘Dismissal of Application (Non‑Appearance at Hearing)’ Case on Unfair Dismissal” – Date of decision: – Case number: Dismissed
- “‘Disciplinary Sanction Level (Unlawful Brokerage·Receipt of Entertainment)’ Case on Unfair Dismissal”
[Tags]
Unfair dismissal, Non‑existence of expectation of renewal (request for downsizing by residents’ representative council), refusal to renew fixed‑term contract, Labor Law Firm Law&, large labor law firm, Samseong‑dong labor law firm, Samseong Station labor law firm, Gangnam labor law firm
※ This article is part of the “Unfair Dismissal Decisions” series by Labor Law Firm Law&.
※ You can view the previous article, “‘Right to Terminate Probation (Three‑Month Probationary Evaluation)’ Case on Unfair Dismissal,” in a new window.
※ The list of decisions relating to non‑existence of expectation of renewal (request for downsizing by residents’ representative council) can be viewed together in the “List of Decisions on Non‑Existence of Expectation of Renewal (Request for Downsizing by Residents’ Representative Council).”
※ Korean version of this case: Korean article
