Corporate trends / Performance record
Unfair Dismissal Decision Concerning “Expiry of Fixed-Term Contract (Resignation Letter · Receipt of Severance Pay)” (Unfair Dismissal 350)
- Date2026/04/06 04:04
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[Case Information]
This case is a decision in which the employer prevailed (application dismissed) on the issue of “expiry of fixed-term contract (resignation letter · receipt of severance pay).”
Decision body: Seoul Regional Labor Relations Commission 2025Buhae10216 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026.02.23 · Case result: Dismissed
Summary of key issues: (i) the employment contract states that the contract period is one year; (ii) the employee argued that the fixed-term employment contract was merely nominal and that in substance it was a contract with no fixed term, but failed to prove this; (iii) the foundation’s rules of employment state that where an employment contract has a fixed term, the contract automatically terminates upon expiry of the term; (iv) there was no established practice at the foundation of renewing fixed-term employment contracts; (v) the employee submitted a resignation letter on the ground of contract expiry and ...
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee of a foundation filed an application with the Labor Relations Commission for a remedy for unfair dismissal after the expiry of the employment contract, but the Seoul Regional Labor Relations Commission ruled in favor of the employer. The employee argued that, although the employment contract was formally fixed-term, in substance it was an employment contract with no fixed term. The issue, therefore, was how the Labor Relations Commission would determine whether the contract was in fact fixed-term and whether a “dismissal” existed.
The issue in this case was:
“Where the employment contract clearly specifies a one-year term, the rules of employment provide for automatic termination upon expiry of the term, and there is no practice of renewal, can the expiry of the contract period together with the submission of a resignation letter be regarded as ‘unfair dismissal’?”
Ⅱ. Summary of Issues
The key issues examined by the Labor Relations Commission in this case were, first, whether, despite the one-year term expressly stated in the employment contract, the employment relationship was in substance an employment contract with no fixed term. Second, even if it is regarded as a fixed-term employment contract, whether the employee had a legitimate expectation of renewal such that the employer’s refusal to renew would constitute unfair dismissal. Third, given that the employee submitted a resignation letter citing contract expiry and received severance pay, whether it can be said that there was a unilateral dismissal by the employer.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel held that this employment relationship was, in principle, a fixed-term employment contract, in light of the facts that the employment contract explicitly specified a one-year term, the foundation’s rules of employment provided that where an employment contract has a fixed term the employment relationship automatically terminates upon expiry of that term, and there was no confirmed practice within the foundation of renewing fixed-term employment contracts.
Although the employee argued that the fixed-term nature of the contract was merely formal and that in substance it was an employment contract with no fixed term, the employee failed to present objective evidence such as repeated renewals, an established practice of renewal, or materials supporting a legitimate expectation of renewal. On the contrary, the employee had submitted a resignation letter citing contract expiry and received severance pay. Taking all of this into account, the panel found it difficult to conclude that there had been a unilateral termination of the employment relationship by the employer, i.e., a dismissal.
Ultimately, the panel viewed the employment relationship as having naturally terminated upon expiry of the contract term, and therefore held that there was no “dismissal” in the first place to which the legal principles restricting dismissal under the Labor Standards Act (requirement of just cause) could apply. Accordingly, it found that the alleged dismissal in this case did not exist and therefore could not be deemed unfair.
Ⅳ. Practical Points (From the Employee’s Perspective)
If the employment contract specifies a fixed term, the company’s rules of employment provide for automatic termination upon expiry of that term, and there is in fact no practice of renewal, you should be aware that, as a rule, the Labor Relations Commission and the courts will regard the relationship as a fixed-term employment contract and will not treat expiry of the contract term as a dismissal. To argue that the fixed-term nature of the contract is merely formal, you must secure sufficient objective evidence, such as the number of times the contract has been renewed, renewal practices for comparable employees, and explanations given at the time of hiring.
In addition, if you submit a resignation letter citing contract expiry and receive severance pay, it becomes very difficult to later claim that it was in fact a “dismissal,” so long as there is no dispute as to the genuineness of your intention to resign. Therefore, before submitting a resignation letter, you should consult sufficiently with a labor law expert (for example, Labor Law Firm Law&).
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s standpoint, when hiring fixed-term employees, it is advisable to clearly state in the employment contract the contract period, the end date, and the basic policy on renewal, and to clearly provide in the rules of employment for automatic termination of fixed-term employment contracts. This will help reduce the likelihood of disputes. You should also be aware that if you repeatedly renew fixed-term employment contracts or, in practice, continue to employ workers like regular employees while merely maintaining a formal fixed term, the Labor Relations Commission may find that the employment contract is in fact one with no fixed term or that the employee has a legitimate expectation of renewal.
Where, upon contract expiry, the employee voluntarily chooses to resign, you should document in writing the reason for contract expiry, confirmation of the employee’s intention, and the circumstances surrounding the submission of the resignation letter, and conduct the process transparently so as to avoid any misunderstanding that improper pressure was exerted during the explanation process.
This decision of the Seoul Regional Labor Relations Commission is a good illustration of how the Labor Relations Commission determines the existence of a dismissal in fixed-term employment relationships when the wording of the employment contract and rules of employment, the existence or absence of renewal practices, and objective circumstances such as submission of a resignation letter and receipt of severance pay are taken together. Employees and employers facing similar situations should, from the early stages of the case, systematically organize the facts in cooperation with experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
Taking into comprehensive consideration: (i) the fact that the employment contract states that the contract period is one year; (ii) the fact that, although the employee argued that the fixed-term employment contract was merely formal and that in substance it was an employment contract with no fixed term, the employee failed to prove this; (iii) the fact that the foundation’s rules of employment state that where an employment contract has a fixed term, the contract automatically terminates upon expiry of the term; (iv) the fact that there was no established practice at the foundation of renewing fixed-term employment contracts; and (v) the fact that the employee submitted a resignation letter citing contract expiry and received severance pay, the Commission found that there was no dismissal.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
Taking into comprehensive consideration: (i) the fact that the employment contract states that the contract period is one year; (ii) the fact that, although the employee argued that the fixed-term employment contract was merely formal and that in substance it was an employment contract with no fixed term, the employee failed to prove this; (iii) the fact that the foundation’s rules of employment state that where an employment contract has a fixed term, the contract automatically terminates upon expiry of the term; (iv) the fact that there was no established practice at the foundation of renewing fixed-term employment contracts; and (v) the fact that the employee submitted a resignation letter citing contract expiry and received severance pay, the Commission found that there was no dismissal. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘Expression of Intention to Resign (Resignation Remark in Telephone Call)’”
- “Unfair Dismissal Decision Concerning ‘Dismissal of Application (Failure to Appear at Hearing)’” – Date of decision: – Case number: Dismissed
- “Unfair Dismissal Decision Concerning ‘No Formation of Hiring Commitment (Absence of Offer Letter)’” – Date of decision: – Case number: Initial decision upheld
[Tags]
Unfair dismissal, expiry of fixed-term contract (resignation letter · receipt of severance pay), 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.
※ You can view the previous article, “Unfair Dismissal Decision Concerning ‘Scope of Legal Application (Franchisee)’,” in a new window.
※ You can also view the list of decisions related to expiry of fixed-term contract (resignation letter · receipt of severance pay) in the “List of Decisions Related to Expiry of Fixed-Term Contract (Resignation Letter · Receipt of Severance Pay).”
※ Korean version of this case: Korean article
This case is a decision in which the employer prevailed (application dismissed) on the issue of “expiry of fixed-term contract (resignation letter · receipt of severance pay).”
Decision body: Seoul Regional Labor Relations Commission 2025Buhae10216 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026.02.23 · Case result: Dismissed
Summary of key issues: (i) the employment contract states that the contract period is one year; (ii) the employee argued that the fixed-term employment contract was merely nominal and that in substance it was a contract with no fixed term, but failed to prove this; (iii) the foundation’s rules of employment state that where an employment contract has a fixed term, the contract automatically terminates upon expiry of the term; (iv) there was no established practice at the foundation of renewing fixed-term employment contracts; (v) the employee submitted a resignation letter on the ground of contract expiry and ...
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee of a foundation filed an application with the Labor Relations Commission for a remedy for unfair dismissal after the expiry of the employment contract, but the Seoul Regional Labor Relations Commission ruled in favor of the employer. The employee argued that, although the employment contract was formally fixed-term, in substance it was an employment contract with no fixed term. The issue, therefore, was how the Labor Relations Commission would determine whether the contract was in fact fixed-term and whether a “dismissal” existed.
The issue in this case was:
“Where the employment contract clearly specifies a one-year term, the rules of employment provide for automatic termination upon expiry of the term, and there is no practice of renewal, can the expiry of the contract period together with the submission of a resignation letter be regarded as ‘unfair dismissal’?”
Ⅱ. Summary of Issues
The key issues examined by the Labor Relations Commission in this case were, first, whether, despite the one-year term expressly stated in the employment contract, the employment relationship was in substance an employment contract with no fixed term. Second, even if it is regarded as a fixed-term employment contract, whether the employee had a legitimate expectation of renewal such that the employer’s refusal to renew would constitute unfair dismissal. Third, given that the employee submitted a resignation letter citing contract expiry and received severance pay, whether it can be said that there was a unilateral dismissal by the employer.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel held that this employment relationship was, in principle, a fixed-term employment contract, in light of the facts that the employment contract explicitly specified a one-year term, the foundation’s rules of employment provided that where an employment contract has a fixed term the employment relationship automatically terminates upon expiry of that term, and there was no confirmed practice within the foundation of renewing fixed-term employment contracts.
Although the employee argued that the fixed-term nature of the contract was merely formal and that in substance it was an employment contract with no fixed term, the employee failed to present objective evidence such as repeated renewals, an established practice of renewal, or materials supporting a legitimate expectation of renewal. On the contrary, the employee had submitted a resignation letter citing contract expiry and received severance pay. Taking all of this into account, the panel found it difficult to conclude that there had been a unilateral termination of the employment relationship by the employer, i.e., a dismissal.
Ultimately, the panel viewed the employment relationship as having naturally terminated upon expiry of the contract term, and therefore held that there was no “dismissal” in the first place to which the legal principles restricting dismissal under the Labor Standards Act (requirement of just cause) could apply. Accordingly, it found that the alleged dismissal in this case did not exist and therefore could not be deemed unfair.
Ⅳ. Practical Points (From the Employee’s Perspective)
If the employment contract specifies a fixed term, the company’s rules of employment provide for automatic termination upon expiry of that term, and there is in fact no practice of renewal, you should be aware that, as a rule, the Labor Relations Commission and the courts will regard the relationship as a fixed-term employment contract and will not treat expiry of the contract term as a dismissal. To argue that the fixed-term nature of the contract is merely formal, you must secure sufficient objective evidence, such as the number of times the contract has been renewed, renewal practices for comparable employees, and explanations given at the time of hiring.
In addition, if you submit a resignation letter citing contract expiry and receive severance pay, it becomes very difficult to later claim that it was in fact a “dismissal,” so long as there is no dispute as to the genuineness of your intention to resign. Therefore, before submitting a resignation letter, you should consult sufficiently with a labor law expert (for example, Labor Law Firm Law&).
Ⅴ. Practical Points (From the Employer’s Perspective)
From the employer’s standpoint, when hiring fixed-term employees, it is advisable to clearly state in the employment contract the contract period, the end date, and the basic policy on renewal, and to clearly provide in the rules of employment for automatic termination of fixed-term employment contracts. This will help reduce the likelihood of disputes. You should also be aware that if you repeatedly renew fixed-term employment contracts or, in practice, continue to employ workers like regular employees while merely maintaining a formal fixed term, the Labor Relations Commission may find that the employment contract is in fact one with no fixed term or that the employee has a legitimate expectation of renewal.
Where, upon contract expiry, the employee voluntarily chooses to resign, you should document in writing the reason for contract expiry, confirmation of the employee’s intention, and the circumstances surrounding the submission of the resignation letter, and conduct the process transparently so as to avoid any misunderstanding that improper pressure was exerted during the explanation process.
This decision of the Seoul Regional Labor Relations Commission is a good illustration of how the Labor Relations Commission determines the existence of a dismissal in fixed-term employment relationships when the wording of the employment contract and rules of employment, the existence or absence of renewal practices, and objective circumstances such as submission of a resignation letter and receipt of severance pay are taken together. Employees and employers facing similar situations should, from the early stages of the case, systematically organize the facts in cooperation with experts such as Labor Law Firm Law&.
2. Matters Decided
A. Case Overview and Procedural History
Taking into comprehensive consideration: (i) the fact that the employment contract states that the contract period is one year; (ii) the fact that, although the employee argued that the fixed-term employment contract was merely formal and that in substance it was an employment contract with no fixed term, the employee failed to prove this; (iii) the fact that the foundation’s rules of employment state that where an employment contract has a fixed term, the contract automatically terminates upon expiry of the term; (iv) the fact that there was no established practice at the foundation of renewing fixed-term employment contracts; and (v) the fact that the employee submitted a resignation letter citing contract expiry and received severance pay, the Commission found that there was no dismissal.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
Taking into comprehensive consideration: (i) the fact that the employment contract states that the contract period is one year; (ii) the fact that, although the employee argued that the fixed-term employment contract was merely formal and that in substance it was an employment contract with no fixed term, the employee failed to prove this; (iii) the fact that the foundation’s rules of employment state that where an employment contract has a fixed term, the contract automatically terminates upon expiry of the term; (iv) the fact that there was no established practice at the foundation of renewing fixed-term employment contracts; and (v) the fact that the employee submitted a resignation letter citing contract expiry and received severance pay, the Commission found that there was no dismissal. /
[See More Related Decisions]
- “Unfair Dismissal Decision Concerning ‘Expression of Intention to Resign (Resignation Remark in Telephone Call)’”
- “Unfair Dismissal Decision Concerning ‘Dismissal of Application (Failure to Appear at Hearing)’” – Date of decision: – Case number: Dismissed
- “Unfair Dismissal Decision Concerning ‘No Formation of Hiring Commitment (Absence of Offer Letter)’” – Date of decision: – Case number: Initial decision upheld
[Tags]
Unfair dismissal, expiry of fixed-term contract (resignation letter · receipt of severance pay), 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.
※ You can view the previous article, “Unfair Dismissal Decision Concerning ‘Scope of Legal Application (Franchisee)’,” in a new window.
※ You can also view the list of decisions related to expiry of fixed-term contract (resignation letter · receipt of severance pay) in the “List of Decisions Related to Expiry of Fixed-Term Contract (Resignation Letter · Receipt of Severance Pay).”
※ Korean version of this case: Korean article
