Corporate trends / Performance record
‘Non-Existence of Legitimate Expectation of Renewal (Single Contract After Business Transfer)’ Unfair Dismissal Decision (Unfair Dismissal 175)
- Date2026/02/04 04:05
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[Case Information]
This case is a decision in which the employer prevailed (application dismissed) on the issue of “non-existence of legitimate expectation of renewal (single contract after business transfer).”
Decision body: Seoul Regional Labor Relations Commission 2025Buhae9168 ○ ○ ○ Application for Remedy for Unfair Dismissal
2025.12.16 · Case result: Dismissed
Key issue summary: (i) The employment contract stated that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate,” and there were no other provisions regarding renewal; (ii) in 2024 the employer took over the worksite by way of business transfer.
1. Legal Implications
In this unfair dismissal case, the key issues before the Labor Relations Commission were whether termination of the contract on the ground of expiration of the employment period was justified, and whether the employee had a legitimate expectation of renewal of the employment contract. These issues are closely related to similar cases handled by Labor Law Firm Law&. In particular, the question was whether, in a situation where only the employer changed due to a business transfer, a fixed-term employment contract that was entered into only once could be regarded as “automatic termination upon expiration of the term” rather than a redundancy dismissal or dismissal.
Ⅰ. Case Overview
The employee entered into an employment contract for a fixed period and worked under that contract. In September 2024, the employer took over the worksite through a business transfer, and the employee’s employment was succeeded; the employee continued to work in the same manner thereafter. When the contract period stipulated in the employment contract expired, the employer, without issuing a separate dismissal notice, terminated the employment relationship on the ground of expiration of the contract period. The employee claimed that this constituted unfair dismissal and filed an application for remedy with the Labor Relations Commission.
Ⅱ. Issues
The issue in this case is whether, “where the employment contract explicitly provides that the employment relationship automatically terminates upon expiration of the contract period, and where, after the business transfer, the employer and employee have entered into only a single fixed-term employment contract, the employee can be recognized as having a legitimate expectation of renewal of the contract.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that the employment contract prepared by the employer clearly specified the contract period and provided that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate”; that after the business transfer, the employer and employee had entered into only one fixed-term employment contract and there was no experience of repeated renewals; that the examples submitted by the employee as evidence of a renewal practice concerned contracts other than employment contracts with this employer; and that it was difficult to find that any trust or practice regarding renewal of employment contracts had been established across the workplace as a whole.
In light of the above, the panel held that the fixed term of the employment contract could not be regarded as a mere formality, and that it was difficult to recognize any legitimate expectation of renewal of the employment contract.
Accordingly, the panel found that there was no dismissal in this case, and that the employer’s act of terminating the employment relationship on the ground of expiration of the contract period was a natural termination of a fixed-term employment contract and therefore justified.
Ⅳ. Practical Points (From the Employee’s Perspective)
Where the employment contract specifies the contract period and includes a clause providing for “automatic termination upon expiration of the period,” you should be aware that, in the absence of a separate practice of repeated renewals or criteria/procedures for renewal, it is difficult to have a legitimate expectation of renewal recognized. In particular, if, after a business transfer, you have entered into only one contract with the new employer, it is not easy to assert a legitimate expectation of renewal based solely on past practices with a different employer.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
When hiring fixed-term employees, it is important to clearly state in the employment contract the contract period and the method of termination (including whether the contract automatically terminates upon expiration), and to operate consistently on the basis that renewal will be determined individually depending on staffing needs, evaluation results, and so forth. In addition, when employees are succeeded through a business transfer, a key point in preventing future disputes over unfair dismissal or refusal to renew is to ensure that, independently of the practices of the previous workplace, the new employer’s contract structure and operating policies are aligned between written documentation and actual practice.
2. Matters Decided
A. Case Overview and Procedural History
(i) The employment contract stated that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate,” and no other provisions regarding renewal were identified; (ii) in September 2024, the employer took over the worksite by way of business transfer, the employee’s employment was succeeded, and the parties entered into one employment contract; (iii) the examples submitted as evidence of a practice of renewal did not concern employment contracts with this employer; and (iv) it could not be confirmed that any trust or practice regarding renewal of employment contracts had been established in the workplace. In light of all of the above, the employee could not be recognized as having a legitimate expectation of renewal of the employment contract, and therefore the employer’s termination of the employment relationship on the ground of expiration of the contract period was justified.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(i) The employment contract stated that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate,” and no other provisions regarding renewal were identified; (ii) in September 2024, the employer took over the worksite by way of business transfer, the employee’s employment was succeeded, and the parties entered into one employment contract; (iii) the examples submitted as evidence of a practice of renewal did not concern employment contracts with this employer; and (iv) it could not be confirmed that any trust or practice regarding renewal of employment contracts had been established in the workplace. In light of all of the above, the employee could not be recognized as having a legitimate expectation of renewal of the employment contract, and therefore the employer’s termination of the employment relationship on the ground of expiration of the contract period was justified. /
[See More Related Decisions]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision” – Date of decision: – Case result: Initial decision upheld
- “‘Non-Satisfaction of Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Decision”
- “‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’ Unfair Dismissal Decision”
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (single contract after business transfer), 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 Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “‘Dismissal During Probation (Safety Manager Unreachable)’ Unfair Dismissal Decision,” can be viewed in a new window.
※ A list of decisions related to non-existence of legitimate expectation of renewal (single contract after business transfer) can be found under “List of Decisions on Non-Existence of Legitimate Expectation of Renewal (Single Contract After Business Transfer).”
※ Korean version of this case: Korean article
This case is a decision in which the employer prevailed (application dismissed) on the issue of “non-existence of legitimate expectation of renewal (single contract after business transfer).”
Decision body: Seoul Regional Labor Relations Commission 2025Buhae9168 ○ ○ ○ Application for Remedy for Unfair Dismissal
2025.12.16 · Case result: Dismissed
Key issue summary: (i) The employment contract stated that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate,” and there were no other provisions regarding renewal; (ii) in 2024 the employer took over the worksite by way of business transfer.
1. Legal Implications
In this unfair dismissal case, the key issues before the Labor Relations Commission were whether termination of the contract on the ground of expiration of the employment period was justified, and whether the employee had a legitimate expectation of renewal of the employment contract. These issues are closely related to similar cases handled by Labor Law Firm Law&. In particular, the question was whether, in a situation where only the employer changed due to a business transfer, a fixed-term employment contract that was entered into only once could be regarded as “automatic termination upon expiration of the term” rather than a redundancy dismissal or dismissal.
Ⅰ. Case Overview
The employee entered into an employment contract for a fixed period and worked under that contract. In September 2024, the employer took over the worksite through a business transfer, and the employee’s employment was succeeded; the employee continued to work in the same manner thereafter. When the contract period stipulated in the employment contract expired, the employer, without issuing a separate dismissal notice, terminated the employment relationship on the ground of expiration of the contract period. The employee claimed that this constituted unfair dismissal and filed an application for remedy with the Labor Relations Commission.
Ⅱ. Issues
The issue in this case is whether, “where the employment contract explicitly provides that the employment relationship automatically terminates upon expiration of the contract period, and where, after the business transfer, the employer and employee have entered into only a single fixed-term employment contract, the employee can be recognized as having a legitimate expectation of renewal of the contract.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that the employment contract prepared by the employer clearly specified the contract period and provided that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate”; that after the business transfer, the employer and employee had entered into only one fixed-term employment contract and there was no experience of repeated renewals; that the examples submitted by the employee as evidence of a renewal practice concerned contracts other than employment contracts with this employer; and that it was difficult to find that any trust or practice regarding renewal of employment contracts had been established across the workplace as a whole.
In light of the above, the panel held that the fixed term of the employment contract could not be regarded as a mere formality, and that it was difficult to recognize any legitimate expectation of renewal of the employment contract.
Accordingly, the panel found that there was no dismissal in this case, and that the employer’s act of terminating the employment relationship on the ground of expiration of the contract period was a natural termination of a fixed-term employment contract and therefore justified.
Ⅳ. Practical Points (From the Employee’s Perspective)
Where the employment contract specifies the contract period and includes a clause providing for “automatic termination upon expiration of the period,” you should be aware that, in the absence of a separate practice of repeated renewals or criteria/procedures for renewal, it is difficult to have a legitimate expectation of renewal recognized. In particular, if, after a business transfer, you have entered into only one contract with the new employer, it is not easy to assert a legitimate expectation of renewal based solely on past practices with a different employer.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
When hiring fixed-term employees, it is important to clearly state in the employment contract the contract period and the method of termination (including whether the contract automatically terminates upon expiration), and to operate consistently on the basis that renewal will be determined individually depending on staffing needs, evaluation results, and so forth. In addition, when employees are succeeded through a business transfer, a key point in preventing future disputes over unfair dismissal or refusal to renew is to ensure that, independently of the practices of the previous workplace, the new employer’s contract structure and operating policies are aligned between written documentation and actual practice.
2. Matters Decided
A. Case Overview and Procedural History
(i) The employment contract stated that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate,” and no other provisions regarding renewal were identified; (ii) in September 2024, the employer took over the worksite by way of business transfer, the employee’s employment was succeeded, and the parties entered into one employment contract; (iii) the examples submitted as evidence of a practice of renewal did not concern employment contracts with this employer; and (iv) it could not be confirmed that any trust or practice regarding renewal of employment contracts had been established in the workplace. In light of all of the above, the employee could not be recognized as having a legitimate expectation of renewal of the employment contract, and therefore the employer’s termination of the employment relationship on the ground of expiration of the contract period was justified.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(i) The employment contract stated that “upon expiration of the employment contract period, the employment relationship between the parties shall automatically terminate,” and no other provisions regarding renewal were identified; (ii) in September 2024, the employer took over the worksite by way of business transfer, the employee’s employment was succeeded, and the parties entered into one employment contract; (iii) the examples submitted as evidence of a practice of renewal did not concern employment contracts with this employer; and (iv) it could not be confirmed that any trust or practice regarding renewal of employment contracts had been established in the workplace. In light of all of the above, the employee could not be recognized as having a legitimate expectation of renewal of the employment contract, and therefore the employer’s termination of the employment relationship on the ground of expiration of the contract period was justified. /
[See More Related Decisions]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision” – Date of decision: – Case result: Initial decision upheld
- “‘Non-Satisfaction of Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Decision”
- “‘Expression of Intent to Resign (Resignation Remark in Telephone Call)’ Unfair Dismissal Decision”
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (single contract after business transfer), 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 Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “‘Dismissal During Probation (Safety Manager Unreachable)’ Unfair Dismissal Decision,” can be viewed in a new window.
※ A list of decisions related to non-existence of legitimate expectation of renewal (single contract after business transfer) can be found under “List of Decisions on Non-Existence of Legitimate Expectation of Renewal (Single Contract After Business Transfer).”
※ Korean version of this case: Korean article
