Corporate trends / Performance record
Non-Existence of Legitimate Expectation of Renewal (Expiration of Service Contract) in Unfair Dismissal Case (Unfair Dismissal 396)
- Date2026/04/23 04:08
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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 (expiration of service contract).”
Decision body: Incheon Regional Labor Relations Commission
2025 Unfair Dismissal 9245 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.02.12 · Result: Dismissed
Summary of key issues:
A. Whether the termination of the employment relationship between the employee and Employer 1 constitutes a dismissal.
The employee’s employment contract expressly stated that the employment contract could be terminated upon expiration of the service contract, and both the employee’s employment contract and Employer 1’s service contract ended on 31 October 2025.
1. Legal Implications
Ⅰ. Case Overview
This case concerns an employee who, after the expiration of a fixed-term employment contract coinciding with the end of a service (outsourcing) contract, filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal.
The employee asserted not only that the former service contractor (Employer 1) remained the employer, but also that the new contractor that had been awarded the service contract (Employer 2) had employer status and was subject to an obligation of employment succession. The Incheon Regional Labor Relations Commission examined these claims and determined whether the situation constituted an unfair dismissal.
The employment contract contained a clause stating that the employment contract could be terminated upon expiration of the service contract, and in fact both the employment contract and the service contract ended on the same date. The employee subsequently filed an application for remedy for unfair dismissal with the Labor Relations Commission, but the Commission dismissed the application.
Ⅱ. Issues
The issues in this case are:
“In a situation where a fixed-term employment contract expires simultaneously with the termination of a service contract, can the employee be deemed to have a legitimate expectation of renewal of the employment contract, and can the new contractor be regarded as having employer status on the premise of an expectation of employment succession?”
In particular, the key questions in this unfair dismissal remedy application were: whether there was a “dismissal” at all; whether the expiration of a fixed-term contract, as distinct from a redundancy (collective dismissal), can be evaluated as an unfair dismissal; and, further, in a principal–contractor structure or upon change of contractor, whether there existed any practice of employment succession of the kind frequently addressed by Labor Law Firm Law&.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The decision panel in this case noted that the employment contract expressly provided that the employment contract could be terminated upon expiration of the service contract; that both the employment contract period and the service contract period ended on 31 October 2025; that there was no fact of repeated renewals of the employment contract after the employee’s initial hiring, nor any evidence of a practice of renewal; and that the employee personally submitted a resignation letter citing “expiration of contract period” as the reason.
In light of these circumstances, the panel found it difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed. Accordingly, it held that the employment relationship between the employee and Employer 1 had naturally terminated upon expiration of the contract period, and did not constitute a dismissal.
With respect to Employer 2, the panel found that there was no clause in the service contract imposing an obligation of employment succession and that hiring authority was instead granted to Employer 2; that there was no recognized practice whereby the employment of existing workers was automatically succeeded upon a change of contractor; and that, although Employer 2 provided interview opportunities to the existing workers, it simultaneously conducted external recruitment and selectively hired new personnel.
On this basis, the panel held that it was difficult to recognize an expectation of employment succession on the part of the employee, and therefore Employer 2 could not be regarded as having “employer status” as a proper respondent to an application for remedy for unfair dismissal. The panel thus concluded that the “dismissal” at issue either did not exist or did not constitute an unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
Employees working under fixed-term or service (outsourcing) arrangements should carefully review the contract period stated in their employment contracts, the clauses regarding expiration of the service contract, and any language relating to renewal. Where there is no special practice of renewal and no rules or written documents promising renewal, and where the employee has personally submitted a resignation letter premised on “expiration of contract period,” it becomes very difficult to assert a legitimate expectation of renewal.
In addition, even if the contractor changes, in the absence of a contractual clause imposing an obligation of employment succession or proof of a long-standing practice of employment succession, it is difficult to assert that the new contractor has a mandatory obligation to hire. To reduce the risk of future disputes, it is important at the time of contract formation to confirm in advance whether there are any agreements on employment succession, and to secure evidence of what practices have actually accumulated at the workplace.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, it is important to clearly define in fixed-term employment contracts the relationship between the expiration of the service contract and the termination of the employment contract, and to manage operations so that unnecessary practices of renewal do not develop. When renewing contracts, employers should keep records of the reasons and criteria for renewal so that they can provide an objective explanation if the employee later asserts a legitimate expectation of renewal.
Upon a change of contractor, the service contract should clearly specify whether there is any clause imposing an obligation of employment succession and set out the recruitment procedures (such as whether existing workers receive priority interviews and whether external recruitment is conducted in parallel). In the actual recruitment process, these procedures should be followed consistently. Such procedural transparency is essential to facilitating the employer’s defense before the Labor Relations Commission on issues of employer status and whether an unfair dismissal has occurred.
2. Matters Decided
A. Case Overview and Procedural History
A. Whether the termination of the employment relationship between the employee and Employer 1 constitutes a dismissal
The employee’s employment contract expressly stated that the employment contract could be terminated upon expiration of the service contract, and both the employee’s employment contract period and Employer 1’s service contract ended on 31 October 2025. The employee had not renewed the employment contract after initial hiring; there was no evidence of a practice of renewing employment contracts; and the employee personally submitted a resignation letter citing “expiration of contract period” as the reason. In light of these circumstances, it is difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed. Therefore, it is reasonable to view the employment relationship between the employee and Employer 1 as having terminated upon expiration of the contract period, rather than as a dismissal.
B. Whether Employer 2 has employer status
There is no clause in the service contract imposing an obligation of employment succession, and hiring authority is instead granted to Employer 2. No practice can be recognized whereby employment has been succeeded upon a change of contractor. In addition, although Employer 2 provided interview opportunities to the existing workers, it simultaneously conducted external recruitment to hire new personnel and carried out selective hiring. In light of these circumstances, it is difficult to recognize an expectation of employment succession on the part of the employee, and Employer 2 therefore cannot be regarded as having employer status as a respondent to an application for remedy for unfair dismissal.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Whether the termination of the employment relationship between the employee and Employer 1 constitutes a dismissal
The employee’s employment contract expressly stated that the employment contract could be terminated upon expiration of the service contract, and both the employee’s employment contract period and Employer 1’s service contract ended on 31 October 2025. The employee had not renewed the employment contract after initial hiring; there was no evidence of a practice of renewing employment contracts; and the employee personally submitted a resignation letter citing “expiration of contract period” as the reason. In light of these circumstances, it is difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed. Therefore, it is reasonable to view the employment relationship between the employee and Employer 1 as having terminated upon expiration of the contract period, rather than as a dismissal.
B. Whether Employer 2 has employer status
There is no clause in the service contract imposing an obligation of employment succession, and hiring authority is instead granted to Employer 2. No practice can be recognized whereby employment has been succeeded upon a change of contractor. In addition, although Employer 2 provided interview opportunities to the existing workers, it simultaneously conducted external recruitment to hire new personnel and carried out selective hiring. In light of these circumstances, it is difficult to recognize an expectation of employment succession on the part of the employee, and Employer 2 therefore cannot be regarded as having employer status as a respondent to an application for remedy for unfair dismissal.
/
[Related Decisions]
- “Existence of Dismissal (Daily Wage · Flexible Attendance)” – Unfair Dismissal Decision
- “Non-Formation of Hiring Commitment (Absence of Offer Letter)” – Unfair Dismissal Decision – Decision date: – Case number: Initial decision upheld
- “Failure to Meet Requirements for Redundancy Dismissal (Workout Company)” – Unfair Dismissal Decision
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (expiration of service 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 part of Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “Existence of Dismissal (Daily Wage · Flexible Attendance) – Unfair Dismissal Decision,” can be viewed in a new window.
※ The list of decisions related to non-existence of legitimate expectation of renewal (expiration of service contract) can be viewed together in the “Non-Existence of Legitimate Expectation of Renewal (Expiration of Service Contract) – Related Decisions” list.
※ 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 (expiration of service contract).”
Decision body: Incheon Regional Labor Relations Commission
2025 Unfair Dismissal 9245 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.02.12 · Result: Dismissed
Summary of key issues:
A. Whether the termination of the employment relationship between the employee and Employer 1 constitutes a dismissal.
The employee’s employment contract expressly stated that the employment contract could be terminated upon expiration of the service contract, and both the employee’s employment contract and Employer 1’s service contract ended on 31 October 2025.
1. Legal Implications
Ⅰ. Case Overview
This case concerns an employee who, after the expiration of a fixed-term employment contract coinciding with the end of a service (outsourcing) contract, filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal.
The employee asserted not only that the former service contractor (Employer 1) remained the employer, but also that the new contractor that had been awarded the service contract (Employer 2) had employer status and was subject to an obligation of employment succession. The Incheon Regional Labor Relations Commission examined these claims and determined whether the situation constituted an unfair dismissal.
The employment contract contained a clause stating that the employment contract could be terminated upon expiration of the service contract, and in fact both the employment contract and the service contract ended on the same date. The employee subsequently filed an application for remedy for unfair dismissal with the Labor Relations Commission, but the Commission dismissed the application.
Ⅱ. Issues
The issues in this case are:
“In a situation where a fixed-term employment contract expires simultaneously with the termination of a service contract, can the employee be deemed to have a legitimate expectation of renewal of the employment contract, and can the new contractor be regarded as having employer status on the premise of an expectation of employment succession?”
In particular, the key questions in this unfair dismissal remedy application were: whether there was a “dismissal” at all; whether the expiration of a fixed-term contract, as distinct from a redundancy (collective dismissal), can be evaluated as an unfair dismissal; and, further, in a principal–contractor structure or upon change of contractor, whether there existed any practice of employment succession of the kind frequently addressed by Labor Law Firm Law&.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The decision panel in this case noted that the employment contract expressly provided that the employment contract could be terminated upon expiration of the service contract; that both the employment contract period and the service contract period ended on 31 October 2025; that there was no fact of repeated renewals of the employment contract after the employee’s initial hiring, nor any evidence of a practice of renewal; and that the employee personally submitted a resignation letter citing “expiration of contract period” as the reason.
In light of these circumstances, the panel found it difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed. Accordingly, it held that the employment relationship between the employee and Employer 1 had naturally terminated upon expiration of the contract period, and did not constitute a dismissal.
With respect to Employer 2, the panel found that there was no clause in the service contract imposing an obligation of employment succession and that hiring authority was instead granted to Employer 2; that there was no recognized practice whereby the employment of existing workers was automatically succeeded upon a change of contractor; and that, although Employer 2 provided interview opportunities to the existing workers, it simultaneously conducted external recruitment and selectively hired new personnel.
On this basis, the panel held that it was difficult to recognize an expectation of employment succession on the part of the employee, and therefore Employer 2 could not be regarded as having “employer status” as a proper respondent to an application for remedy for unfair dismissal. The panel thus concluded that the “dismissal” at issue either did not exist or did not constitute an unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
Employees working under fixed-term or service (outsourcing) arrangements should carefully review the contract period stated in their employment contracts, the clauses regarding expiration of the service contract, and any language relating to renewal. Where there is no special practice of renewal and no rules or written documents promising renewal, and where the employee has personally submitted a resignation letter premised on “expiration of contract period,” it becomes very difficult to assert a legitimate expectation of renewal.
In addition, even if the contractor changes, in the absence of a contractual clause imposing an obligation of employment succession or proof of a long-standing practice of employment succession, it is difficult to assert that the new contractor has a mandatory obligation to hire. To reduce the risk of future disputes, it is important at the time of contract formation to confirm in advance whether there are any agreements on employment succession, and to secure evidence of what practices have actually accumulated at the workplace.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, it is important to clearly define in fixed-term employment contracts the relationship between the expiration of the service contract and the termination of the employment contract, and to manage operations so that unnecessary practices of renewal do not develop. When renewing contracts, employers should keep records of the reasons and criteria for renewal so that they can provide an objective explanation if the employee later asserts a legitimate expectation of renewal.
Upon a change of contractor, the service contract should clearly specify whether there is any clause imposing an obligation of employment succession and set out the recruitment procedures (such as whether existing workers receive priority interviews and whether external recruitment is conducted in parallel). In the actual recruitment process, these procedures should be followed consistently. Such procedural transparency is essential to facilitating the employer’s defense before the Labor Relations Commission on issues of employer status and whether an unfair dismissal has occurred.
2. Matters Decided
A. Case Overview and Procedural History
A. Whether the termination of the employment relationship between the employee and Employer 1 constitutes a dismissal
The employee’s employment contract expressly stated that the employment contract could be terminated upon expiration of the service contract, and both the employee’s employment contract period and Employer 1’s service contract ended on 31 October 2025. The employee had not renewed the employment contract after initial hiring; there was no evidence of a practice of renewing employment contracts; and the employee personally submitted a resignation letter citing “expiration of contract period” as the reason. In light of these circumstances, it is difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed. Therefore, it is reasonable to view the employment relationship between the employee and Employer 1 as having terminated upon expiration of the contract period, rather than as a dismissal.
B. Whether Employer 2 has employer status
There is no clause in the service contract imposing an obligation of employment succession, and hiring authority is instead granted to Employer 2. No practice can be recognized whereby employment has been succeeded upon a change of contractor. In addition, although Employer 2 provided interview opportunities to the existing workers, it simultaneously conducted external recruitment to hire new personnel and carried out selective hiring. In light of these circumstances, it is difficult to recognize an expectation of employment succession on the part of the employee, and Employer 2 therefore cannot be regarded as having employer status as a respondent to an application for remedy for unfair dismissal.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Whether the termination of the employment relationship between the employee and Employer 1 constitutes a dismissal
The employee’s employment contract expressly stated that the employment contract could be terminated upon expiration of the service contract, and both the employee’s employment contract period and Employer 1’s service contract ended on 31 October 2025. The employee had not renewed the employment contract after initial hiring; there was no evidence of a practice of renewing employment contracts; and the employee personally submitted a resignation letter citing “expiration of contract period” as the reason. In light of these circumstances, it is difficult to conclude that a legitimate expectation of renewal of the employment contract had been formed. Therefore, it is reasonable to view the employment relationship between the employee and Employer 1 as having terminated upon expiration of the contract period, rather than as a dismissal.
B. Whether Employer 2 has employer status
There is no clause in the service contract imposing an obligation of employment succession, and hiring authority is instead granted to Employer 2. No practice can be recognized whereby employment has been succeeded upon a change of contractor. In addition, although Employer 2 provided interview opportunities to the existing workers, it simultaneously conducted external recruitment to hire new personnel and carried out selective hiring. In light of these circumstances, it is difficult to recognize an expectation of employment succession on the part of the employee, and Employer 2 therefore cannot be regarded as having employer status as a respondent to an application for remedy for unfair dismissal.
/
[Related Decisions]
- “Existence of Dismissal (Daily Wage · Flexible Attendance)” – Unfair Dismissal Decision
- “Non-Formation of Hiring Commitment (Absence of Offer Letter)” – Unfair Dismissal Decision – Decision date: – Case number: Initial decision upheld
- “Failure to Meet Requirements for Redundancy Dismissal (Workout Company)” – Unfair Dismissal Decision
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (expiration of service 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 part of Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ The previous article, “Existence of Dismissal (Daily Wage · Flexible Attendance) – Unfair Dismissal Decision,” can be viewed in a new window.
※ The list of decisions related to non-existence of legitimate expectation of renewal (expiration of service contract) can be viewed together in the “Non-Existence of Legitimate Expectation of Renewal (Expiration of Service Contract) – Related Decisions” list.
※ Korean version of this case: Korean article
