Corporate trends / Performance record
‘Unfair Dismissal Precedent on “Employee Status · Non‑Renewal Dismissal (Executive Appointment Contract)” (Unfair Dismissal 222)
- Date2026/02/21 04:19
- Read 222
[Case Information]
This case is a precedent in which the issues of “employee status · non‑renewal dismissal (executive appointment contract)” were concluded with the first‑instance decision being upheld.
Decision body: Central Labor Relations Commission 2025Buhae1221 ○ ○ ○ Application for Re‑examination of Remedy for Unfair Dismissal
2025.12.10 · Case result: First‑instance decision upheld
Summary of key issues:
A. Whether the person is an employee under the Labor Standards Act
Although the worker in this case held positions such as ○○ President, Head of Headquarters, etc., comparable to the employer and received corresponding remuneration, in light of the overall manner in which he carried out his work and how his attendance was managed, it was determined that, notwithstanding the formal label of an executive appointment contract, a relationship of subordination existed. Accordingly, the worker was found to be an employee under the Labor Standards Act.
B. Whether a dismissal exists
Given that the parties had repeatedly renewed the executive appointment contract in both written and oral form …
1. Legal Implications
Ⅰ. Case Overview
In this case, the issue before the Labor Relations Commission was whether a person who, in form, had entered into an “executive appointment contract” and held positions and received remuneration comparable to those of the employer (such as ○○ President, Head of Headquarters, etc.) was in fact an employee under the Labor Standards Act, and whether the notice of termination of the appointment contract constituted an unfair dismissal.
The Commission focused on the substance rather than the form of the executive appointment contract, examining the actual manner of performing duties and attendance management, and recognized the person’s status as an employee. It then treated the notice of termination of the appointment contract as a dismissal and reviewed its legitimacy. In doing so, it also examined whether the employment‑security clause in the share and management control transfer agreement applied.
Ⅱ. Summary of Issues
The issues in this case are:
“Where an executive appointment contract has been concluded in form and the individual has held a position and received remuneration similar to those of the employer, whether the person is still an employee under the Labor Standards Act if, in substance, a relationship of subordination exists; and whether the failure to further renew an executive appointment contract that had been repeatedly renewed, coupled with a notice of termination, constitutes a dismissal, and if so, whether that dismissal is based on just cause and due procedure.”
Ⅲ. Summary of the Labor Relations Commission’s Findings
The panel in this case found that the applicant was an employee under the Labor Standards Act, in view of the following: the employer determined the content of the work and managed attendance; despite the formal label of an executive appointment contract, the overall manner of work performance and attendance management showed the existence of subordination; and management similar to the application of work rules and service regulations appeared to have been carried out.
Given the parties’ practice of repeatedly renewing the executive appointment contract in written and oral form, and the legal principle that, even in the case of fixed‑term or appointment‑type arrangements, an expectation of renewal (gyeongsin‑gidae‑gwon) may be recognized where work has in substance been provided continuously and repeatedly, the notice dated 31 March 2025 terminating the appointment contract was viewed not as a mere expiration of contract but as a dismissal effected through refusal to renew the employment contract.
The dismissal in this case was held to be unfair on the following grounds: despite the person’s status as an employee under the Labor Standards Act, there was no reasonable ground to exclude him from the employment‑security clause in Article 8 of the share and management control transfer agreement on the basis of his formal status as an executive; there was in fact no consignment contract in existence for the period from 1 April 2024 to 31 March 2025, yet the employer issued a notice on 31 March 2025 of “termination of the consignment contract,” which was merely a formal measure inconsistent with the substance; and no reasonable grounds for non‑renewal or specific reasons for dismissal were presented.
Ⅳ. Practical Points (From the Employee’s Perspective)
Even if titles such as executive, appointee under an appointment contract, or freelancer are used in form, you may still be protected as an employee under the Labor Standards Act if, in reality, you provide work continuously at fixed times and places under the employer’s direction and supervision. In particular, where an executive appointment contract has been repeatedly renewed, the Labor Relations Commission and the courts may recognize an “expectation of renewal” (gyeongsin‑gidae‑gwon), as they do for fixed‑term, contract, or appointment‑type workers, treat a notice of contract termination as a dismissal, and examine whether it is unfair.
Where share or management control transfer agreements contain employment‑security clauses, you may also fall within the scope of employment succession or employment security depending on whether the reasons for your explicit exclusion are reasonable and whether the actual nature of your work is closer to that of an employee. You should therefore check both the wording of the agreement and your actual working conditions.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
Even if you operate personnel under the formal structures of executive appointment contracts, consignment contracts, or subcontracting agreements, there is a high likelihood that the Labor Relations Commission and the courts will find them to be employees under the Labor Standards Act if, in reality, you designate working hours and workplace, exercise specific direction and supervision, and pay fixed remuneration. Accordingly, you should clearly design in advance those elements that distinguish such executive/appointment‑type personnel from employees—such as autonomy in performing duties, performance‑based responsibility structures, and allocation of risk—and ensure that documentation and actual practice are aligned.
In addition, where employment‑security clauses are included in the course of transferring or acquiring management control, you will bear the burden of proving reasonable grounds if you arbitrarily exclude specific personnel from the scope of protection. You should therefore objectively organize the criteria and reasons for exclusion. When terminating repeatedly renewed appointment or fixed‑term contracts, rather than merely notifying “expiration of contract period,” you should thoroughly review whether there are reasonable grounds for non‑renewal and just cause consistent with the relevant legal principles, and, where necessary, consult experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
A. Whether the person is an employee under the Labor Standards Act
Although the worker in this case held positions such as ○○ President, Head of Headquarters, etc., comparable to the employer and received corresponding remuneration, in light of the overall manner in which he carried out his work and how his attendance was managed, it was determined that, notwithstanding the formal label of an executive appointment contract, a relationship of subordination existed. Accordingly, the worker was found to be an employee under the Labor Standards Act.
B. Whether a dismissal exists
Given the parties’ practice of repeatedly renewing the executive appointment contract in written and oral form, and given that the worker in this case falls within the scope of an employee under the Labor Standards Act, the employer’s notice dated 31 March 2025 to the worker terminating the appointment contract was found to constitute a dismissal.
C. Whether the dismissal was justified (substantive grounds and procedure)
Although the worker falls within the scope of an employee under the Labor Standards Act, there was no reasonable ground to exclude him from the employment‑security clause set out in Article 8 of the share and management control transfer agreement on the basis of his status as an executive. Furthermore, there was no consignment contract in existence for the period from 1 April 2024 to 31 March 2025, and therefore the act of notifying termination of the consignment contract as of 31 March 2025 lacked just cause.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Findings
A. Whether the person is an employee under the Labor Standards Act
Although the worker in this case held positions such as ○○ President, Head of Headquarters, etc., comparable to the employer and received corresponding remuneration, in light of the overall manner in which he carried out his work and how his attendance was managed, it was determined that, notwithstanding the formal label of an executive appointment contract, a relationship of subordination existed. Accordingly, the worker was found to be an employee under the Labor Standards Act.
B. Whether a dismissal exists
Given the parties’ practice of repeatedly renewing the executive appointment contract in written and oral form, and given that the worker in this case falls within the scope of an employee under the Labor Standards Act, the employer’s notice dated 31 March 2025 to the worker terminating the appointment contract was found to constitute a dismissal.
C. Whether the dismissal was justified (substantive grounds and procedure)
Although the worker falls within the scope of an employee under the Labor Standards Act, there was no reasonable ground to exclude him from the employment‑security clause set out in Article 8 of the share and management control transfer agreement on the basis of his status as an executive. Furthermore, there was no consignment contract in existence for the period from 1 April 2024 to 31 March 2025, and therefore the act of notifying termination of the consignment contract as of 31 March 2025 lacked just cause.
/
[See More Related Precedents]
- ‘Unfair Dismissal Precedent on “Non‑Existence of Disciplinary Grounds (Performance Evaluation · Defect in Consent to Work Rules)”’
- ‘Unfair Dismissal Precedent on “Failure to Meet Requirements for Redundancy Dismissal (Workout Company)”’
- ‘Unfair Dismissal Precedent on “Non‑Formation of Hiring Commitment (Absence of Offer Letter)”’ – Date of decision: – Case result: First‑instance decision upheld
[Tags]
Unfair dismissal, employee status · non‑renewal dismissal (executive appointment contract), refusal to renew fixed‑term contract, others, 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 one of the “Unfair Dismissal Precedents” series by Labor Law Firm Law&.
※ The previous article, “Unfair Dismissal Precedent on ‘Non‑Existence of Disciplinary Grounds (Performance Evaluation · Defect in Consent to Work Rules)’,” can be viewed in a new window.
※ A list of precedents related to employee status · non‑renewal dismissal (executive appointment contract) can be viewed under “List of Precedents on Employee Status · Non‑Renewal Dismissal (Executive Appointment Contract).”
※ Korean version of this case: Korean article
This case is a precedent in which the issues of “employee status · non‑renewal dismissal (executive appointment contract)” were concluded with the first‑instance decision being upheld.
Decision body: Central Labor Relations Commission 2025Buhae1221 ○ ○ ○ Application for Re‑examination of Remedy for Unfair Dismissal
2025.12.10 · Case result: First‑instance decision upheld
Summary of key issues:
A. Whether the person is an employee under the Labor Standards Act
Although the worker in this case held positions such as ○○ President, Head of Headquarters, etc., comparable to the employer and received corresponding remuneration, in light of the overall manner in which he carried out his work and how his attendance was managed, it was determined that, notwithstanding the formal label of an executive appointment contract, a relationship of subordination existed. Accordingly, the worker was found to be an employee under the Labor Standards Act.
B. Whether a dismissal exists
Given that the parties had repeatedly renewed the executive appointment contract in both written and oral form …
1. Legal Implications
Ⅰ. Case Overview
In this case, the issue before the Labor Relations Commission was whether a person who, in form, had entered into an “executive appointment contract” and held positions and received remuneration comparable to those of the employer (such as ○○ President, Head of Headquarters, etc.) was in fact an employee under the Labor Standards Act, and whether the notice of termination of the appointment contract constituted an unfair dismissal.
The Commission focused on the substance rather than the form of the executive appointment contract, examining the actual manner of performing duties and attendance management, and recognized the person’s status as an employee. It then treated the notice of termination of the appointment contract as a dismissal and reviewed its legitimacy. In doing so, it also examined whether the employment‑security clause in the share and management control transfer agreement applied.
Ⅱ. Summary of Issues
The issues in this case are:
“Where an executive appointment contract has been concluded in form and the individual has held a position and received remuneration similar to those of the employer, whether the person is still an employee under the Labor Standards Act if, in substance, a relationship of subordination exists; and whether the failure to further renew an executive appointment contract that had been repeatedly renewed, coupled with a notice of termination, constitutes a dismissal, and if so, whether that dismissal is based on just cause and due procedure.”
Ⅲ. Summary of the Labor Relations Commission’s Findings
The panel in this case found that the applicant was an employee under the Labor Standards Act, in view of the following: the employer determined the content of the work and managed attendance; despite the formal label of an executive appointment contract, the overall manner of work performance and attendance management showed the existence of subordination; and management similar to the application of work rules and service regulations appeared to have been carried out.
Given the parties’ practice of repeatedly renewing the executive appointment contract in written and oral form, and the legal principle that, even in the case of fixed‑term or appointment‑type arrangements, an expectation of renewal (gyeongsin‑gidae‑gwon) may be recognized where work has in substance been provided continuously and repeatedly, the notice dated 31 March 2025 terminating the appointment contract was viewed not as a mere expiration of contract but as a dismissal effected through refusal to renew the employment contract.
The dismissal in this case was held to be unfair on the following grounds: despite the person’s status as an employee under the Labor Standards Act, there was no reasonable ground to exclude him from the employment‑security clause in Article 8 of the share and management control transfer agreement on the basis of his formal status as an executive; there was in fact no consignment contract in existence for the period from 1 April 2024 to 31 March 2025, yet the employer issued a notice on 31 March 2025 of “termination of the consignment contract,” which was merely a formal measure inconsistent with the substance; and no reasonable grounds for non‑renewal or specific reasons for dismissal were presented.
Ⅳ. Practical Points (From the Employee’s Perspective)
Even if titles such as executive, appointee under an appointment contract, or freelancer are used in form, you may still be protected as an employee under the Labor Standards Act if, in reality, you provide work continuously at fixed times and places under the employer’s direction and supervision. In particular, where an executive appointment contract has been repeatedly renewed, the Labor Relations Commission and the courts may recognize an “expectation of renewal” (gyeongsin‑gidae‑gwon), as they do for fixed‑term, contract, or appointment‑type workers, treat a notice of contract termination as a dismissal, and examine whether it is unfair.
Where share or management control transfer agreements contain employment‑security clauses, you may also fall within the scope of employment succession or employment security depending on whether the reasons for your explicit exclusion are reasonable and whether the actual nature of your work is closer to that of an employee. You should therefore check both the wording of the agreement and your actual working conditions.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
Even if you operate personnel under the formal structures of executive appointment contracts, consignment contracts, or subcontracting agreements, there is a high likelihood that the Labor Relations Commission and the courts will find them to be employees under the Labor Standards Act if, in reality, you designate working hours and workplace, exercise specific direction and supervision, and pay fixed remuneration. Accordingly, you should clearly design in advance those elements that distinguish such executive/appointment‑type personnel from employees—such as autonomy in performing duties, performance‑based responsibility structures, and allocation of risk—and ensure that documentation and actual practice are aligned.
In addition, where employment‑security clauses are included in the course of transferring or acquiring management control, you will bear the burden of proving reasonable grounds if you arbitrarily exclude specific personnel from the scope of protection. You should therefore objectively organize the criteria and reasons for exclusion. When terminating repeatedly renewed appointment or fixed‑term contracts, rather than merely notifying “expiration of contract period,” you should thoroughly review whether there are reasonable grounds for non‑renewal and just cause consistent with the relevant legal principles, and, where necessary, consult experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
A. Whether the person is an employee under the Labor Standards Act
Although the worker in this case held positions such as ○○ President, Head of Headquarters, etc., comparable to the employer and received corresponding remuneration, in light of the overall manner in which he carried out his work and how his attendance was managed, it was determined that, notwithstanding the formal label of an executive appointment contract, a relationship of subordination existed. Accordingly, the worker was found to be an employee under the Labor Standards Act.
B. Whether a dismissal exists
Given the parties’ practice of repeatedly renewing the executive appointment contract in written and oral form, and given that the worker in this case falls within the scope of an employee under the Labor Standards Act, the employer’s notice dated 31 March 2025 to the worker terminating the appointment contract was found to constitute a dismissal.
C. Whether the dismissal was justified (substantive grounds and procedure)
Although the worker falls within the scope of an employee under the Labor Standards Act, there was no reasonable ground to exclude him from the employment‑security clause set out in Article 8 of the share and management control transfer agreement on the basis of his status as an executive. Furthermore, there was no consignment contract in existence for the period from 1 April 2024 to 31 March 2025, and therefore the act of notifying termination of the consignment contract as of 31 March 2025 lacked just cause.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Findings
A. Whether the person is an employee under the Labor Standards Act
Although the worker in this case held positions such as ○○ President, Head of Headquarters, etc., comparable to the employer and received corresponding remuneration, in light of the overall manner in which he carried out his work and how his attendance was managed, it was determined that, notwithstanding the formal label of an executive appointment contract, a relationship of subordination existed. Accordingly, the worker was found to be an employee under the Labor Standards Act.
B. Whether a dismissal exists
Given the parties’ practice of repeatedly renewing the executive appointment contract in written and oral form, and given that the worker in this case falls within the scope of an employee under the Labor Standards Act, the employer’s notice dated 31 March 2025 to the worker terminating the appointment contract was found to constitute a dismissal.
C. Whether the dismissal was justified (substantive grounds and procedure)
Although the worker falls within the scope of an employee under the Labor Standards Act, there was no reasonable ground to exclude him from the employment‑security clause set out in Article 8 of the share and management control transfer agreement on the basis of his status as an executive. Furthermore, there was no consignment contract in existence for the period from 1 April 2024 to 31 March 2025, and therefore the act of notifying termination of the consignment contract as of 31 March 2025 lacked just cause.
/
[See More Related Precedents]
- ‘Unfair Dismissal Precedent on “Non‑Existence of Disciplinary Grounds (Performance Evaluation · Defect in Consent to Work Rules)”’
- ‘Unfair Dismissal Precedent on “Failure to Meet Requirements for Redundancy Dismissal (Workout Company)”’
- ‘Unfair Dismissal Precedent on “Non‑Formation of Hiring Commitment (Absence of Offer Letter)”’ – Date of decision: – Case result: First‑instance decision upheld
[Tags]
Unfair dismissal, employee status · non‑renewal dismissal (executive appointment contract), refusal to renew fixed‑term contract, others, 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 one of the “Unfair Dismissal Precedents” series by Labor Law Firm Law&.
※ The previous article, “Unfair Dismissal Precedent on ‘Non‑Existence of Disciplinary Grounds (Performance Evaluation · Defect in Consent to Work Rules)’,” can be viewed in a new window.
※ A list of precedents related to employee status · non‑renewal dismissal (executive appointment contract) can be viewed under “List of Precedents on Employee Status · Non‑Renewal Dismissal (Executive Appointment Contract).”
※ Korean version of this case: Korean article
