Corporate trends / Performance record
Denial of Employee Status (Annual Salary Contract · Concurrent Employment) in Unfair Dismissal Decision (Unfair Dismissal 426)
- Date2026/05/04 20:09
- Read 136
[Case Information]
This case is a decision in which the employer prevailed (application dismissed) on the issue of “denial of employee status (annual salary contract · concurrent employment).”
Decision body: Gyeonggi Regional Labor Relations Commission
2026Buhae286 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.04.01 · Result: Dismissed
Key issue summary: (a)
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, a worker who had been working under an annual‑salary employment contract applied to the Labor Relations Commission for a remedy for unfair dismissal after the contract was not renewed upon expiry of the contract term. The Gyeonggi Regional Labor Relations Commission focused its review on, first, whether the applicant qualified as a “worker” under the Labor Standards Act, and second, whether, as a fixed‑term worker, the applicant had a legitimate expectation of renewal of the employment contract (renewal expectation right).
The Commission recognized the applicant’s employee status but denied the existence of any renewal expectation right, thereby ruling in favor of the employer. How the Commission’s criteria were applied in reaching this conclusion became the key issue in the case. At Labor Law Firm Law&, this is a type of dispute that is frequently reviewed in practice, particularly in terms of how the determinations on employee status and renewal expectation rights diverge in similar situations.
Ⅱ. Summary of Issues
The issue in this case is:
“Whether a worker who entered into an annual‑salary employment contract and concurrently worked at another business establishment can be recognized as (i) a ‘worker’ under the Labor Standards Act and (ii) having a renewal expectation right with respect to the employment contract.”
More specifically:
First, given that the employer had repeatedly renewed the contract despite being aware of the worker’s concurrent employment, whether the applicant should be regarded as a subordinate worker of the employer; and
Second, considering the contract term specified in the employment contract, the wording on “automatic renewal of annual salary,” and the past practice of re‑contracting, whether a legitimate expectation had been formed that the applicant would be able to continue working even after the expiry of the contract term.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The panel in this case found that: the employer had executed an annual‑salary employment contract with the worker and exercised direction and supervision over the worker through a manager with respect to overall matters such as place of work, job duties, and holidays; the place of work was specified as the company’s registered address and the authority to change job duties and prescribed working hours was vested in the employer; the employer regularly paid wages consisting of base salary and meal allowance while deducting employment insurance premiums; and, although the employer was aware of the worker’s concurrent employment at another establishment, it nevertheless entered into renewed contracts, making it difficult to deny employee status solely on the ground of lack of exclusivity.
Accordingly, the Commission held that the applicant qualified as a worker under the Labor Standards Act.
On the other hand, with respect to the renewal expectation right, the Commission noted that: the contract term was clearly specified as 2025.7.1 to 2025.12.31, and the work rules contained no provisions regarding renewal; the clause on automatic renewal of annual salary concerned adjustment of the wage level and could not easily be interpreted as a clause guaranteeing automatic extension of the contract term itself; and the multiple re‑executions of the employment contract were due to increases in annual salary and changes in working conditions, and thus could not be regarded as establishing a “practice of renewal.”
On this basis, the Commission held that the worker did not have a renewal expectation right. Consequently, there was no need to further examine whether there were reasonable grounds for refusing renewal, and the claim of unfair dismissal was rejected.
Ⅳ. Practical Points (From the Worker’s Perspective)
From the worker’s perspective, even if the relationship is structured in the form of an annual‑salary contract, subcontracting, or outsourcing, if in substance the worker performs work at a designated place and time under the employer’s direction and supervision, receives wages on a regular basis, and is covered by the four major social insurances through the employer, there is a high likelihood that the Labor Relations Commission will recognize employee status.
However, where the contract term is expressly stated in the employment contract, and where there are no specific provisions on renewal criteria and procedures in the work rules, collective agreements, or internal guidelines, and where past re‑contracting was limited to formal re‑execution associated with changes in wages or conditions, it is difficult to have a renewal expectation right recognized solely on the basis that “contracts have continuously been renewed.” Fixed‑term workers are advised to carefully check, on an ongoing basis, the wording of their contracts, renewal clauses in the work rules, and the renewal practices applicable to workers in comparable positions.
Ⅴ. Practical Points (From the Employer/Company Perspective)
From the employer’s perspective, even if an annual‑salary or “freelancer” format is used, if in reality the work is performed under strong subordination to the employer, the individual may be deemed a worker under the Labor Standards Act. Where the employer designates the place and hours of work, exercises specific direction and supervision, pays wages regularly in the form of base salary, and handles the four major social insurances, a strategy of “denying employee status” is highly risky. Accordingly, the work rules and employment contracts should be aligned with the actual employment relationship.
In addition, when using fixed‑term workers, it is important to clearly specify the contract term, clarify that renewal is at the company’s discretion, and, where renewal criteria and procedures exist, set them out in writing to enhance predictability. If a structure that may give rise to a renewal expectation right (such as long‑term repeated renewals or a practice of “renewal absent special circumstances”) is already in operation, refusal to renew in the future may be evaluated as unfair dismissal. In such cases, it is advisable to reconsider the structure over the medium to long term, including workforce planning and alternatives such as redundancy dismissals.
2. Matters Decided
(a) Case Overview and Procedural History
(a) Whether the worker qualifies as a worker under the Labor Standards Act
(1) The employer executed an “annual‑salary employment contract” with the worker and appears to have exercised direction and supervision through a manager over overall matters such as place of work, job duties, and holidays;
(2) The worker’s job duties and prescribed working hours were changed in the employment contract, with the authority to change such job duties vested in the employer and the place of work specified as the company’s address in this case;
(3) The worker regularly received wages consisting of base salary and meal allowance, and the employer deducted and paid employment insurance premiums from the wages each month;
(4) Although the employer was aware of the worker’s concurrent employment at another establishment, it nevertheless entered into renewed contracts with the worker, which indicates that the employer itself tolerated the worker’s concurrent employment, and thus it appears difficult to deny employee status solely on the ground of lack of exclusivity.
In light of all of the above, the worker qualifies as a worker under the Labor Standards Act.
(b) Whether a renewal expectation right with respect to the employment contract exists
(1) The contract term is specified in the employment contract as 2025.7.1 to 2025.12.31, and no provisions regarding renewal are found in the work rules;
(2) Although the employment contract contains a clause on automatic renewal of annual salary, it is difficult to interpret this clause as one that automatically extends the contract term itself or guarantees renewal;
(3) The multiple re‑executions of the employment contract were due to increases in annual salary and changes in working conditions, and cannot be viewed as establishing a practice of contract renewal.
In light of the foregoing, the worker does not have a renewal expectation right with respect to the employment contract, and therefore there is no need to further examine whether reasonable grounds existed for refusal to renew.
3. Summary of the Decision
(a) Summary of the Labor Relations Commission’s Findings
(a) Whether the worker qualifies as a worker under the Labor Standards Act
(1) The employer executed an “annual‑salary employment contract” with the worker and appears to have exercised direction and supervision through a manager over overall matters such as place of work, job duties, and holidays;
(2) The worker’s job duties and prescribed working hours were changed in the employment contract, with the authority to change such job duties vested in the employer and the place of work specified as the company’s address in this case;
(3) The worker regularly received wages consisting of base salary and meal allowance, and the employer deducted and paid employment insurance premiums from the wages each month;
(4) Although the employer was aware of the worker’s concurrent employment at another establishment, it nevertheless entered into renewed contracts with the worker, which indicates that the employer itself tolerated the worker’s concurrent employment, and thus it appears difficult to deny employee status solely on the ground of lack of exclusivity.
In light of all of the above, the worker qualifies as a worker under the Labor Standards Act.
(b) Whether a renewal expectation right with respect to the employment contract exists
(1) The contract term is specified in the employment contract as 2025.7.1 to 2025.12.31, and no provisions regarding renewal are found in the work rules;
(2) Although the employment contract contains a clause on automatic renewal of annual salary, it is difficult to interpret this clause as one that automatically extends the contract term itself or guarantees renewal;
(3) The multiple re‑executions of the employment contract were due to increases in annual salary and changes in working conditions, and cannot be viewed as establishing a practice of contract renewal.
In light of the foregoing, the worker does not have a renewal expectation right with respect to the employment contract, and therefore there is no need to further examine whether reasonable grounds existed for refusal to renew. /
[Further Related Decisions]
- “Extinction of Interest in Relief (5‑Month Fixed‑Term Contract)” in Unfair Dismissal Decision
- “Non‑Formation of Hiring Commitment (Absence of Offer Letter)” in Unfair Dismissal Decision – Decision date: – Case number: Initial decision upheld
- “Non‑Satisfaction of Requirements for Redundancy Dismissal (Workout Company)” in Unfair Dismissal Decision
[Tags]
Unfair dismissal, denial of employee status (annual salary contract · concurrent employment), 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, “Extinction of Interest in Relief (5‑Month Fixed‑Term Contract) in Unfair Dismissal Decision,” can be viewed in a new window.
※ The list of decisions related to denial of employee status (annual salary contract · concurrent employment) can be viewed together in the “List of Decisions Related to Denial of Employee Status (Annual Salary Contract · Concurrent Employment).”
※ Korean version of this case: Korean article
This case is a decision in which the employer prevailed (application dismissed) on the issue of “denial of employee status (annual salary contract · concurrent employment).”
Decision body: Gyeonggi Regional Labor Relations Commission
2026Buhae286 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.04.01 · Result: Dismissed
Key issue summary: (a)
1. Legal Implications
Ⅰ. Case Overview
In this unfair dismissal case, a worker who had been working under an annual‑salary employment contract applied to the Labor Relations Commission for a remedy for unfair dismissal after the contract was not renewed upon expiry of the contract term. The Gyeonggi Regional Labor Relations Commission focused its review on, first, whether the applicant qualified as a “worker” under the Labor Standards Act, and second, whether, as a fixed‑term worker, the applicant had a legitimate expectation of renewal of the employment contract (renewal expectation right).
The Commission recognized the applicant’s employee status but denied the existence of any renewal expectation right, thereby ruling in favor of the employer. How the Commission’s criteria were applied in reaching this conclusion became the key issue in the case. At Labor Law Firm Law&, this is a type of dispute that is frequently reviewed in practice, particularly in terms of how the determinations on employee status and renewal expectation rights diverge in similar situations.
Ⅱ. Summary of Issues
The issue in this case is:
“Whether a worker who entered into an annual‑salary employment contract and concurrently worked at another business establishment can be recognized as (i) a ‘worker’ under the Labor Standards Act and (ii) having a renewal expectation right with respect to the employment contract.”
More specifically:
First, given that the employer had repeatedly renewed the contract despite being aware of the worker’s concurrent employment, whether the applicant should be regarded as a subordinate worker of the employer; and
Second, considering the contract term specified in the employment contract, the wording on “automatic renewal of annual salary,” and the past practice of re‑contracting, whether a legitimate expectation had been formed that the applicant would be able to continue working even after the expiry of the contract term.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The panel in this case found that: the employer had executed an annual‑salary employment contract with the worker and exercised direction and supervision over the worker through a manager with respect to overall matters such as place of work, job duties, and holidays; the place of work was specified as the company’s registered address and the authority to change job duties and prescribed working hours was vested in the employer; the employer regularly paid wages consisting of base salary and meal allowance while deducting employment insurance premiums; and, although the employer was aware of the worker’s concurrent employment at another establishment, it nevertheless entered into renewed contracts, making it difficult to deny employee status solely on the ground of lack of exclusivity.
Accordingly, the Commission held that the applicant qualified as a worker under the Labor Standards Act.
On the other hand, with respect to the renewal expectation right, the Commission noted that: the contract term was clearly specified as 2025.7.1 to 2025.12.31, and the work rules contained no provisions regarding renewal; the clause on automatic renewal of annual salary concerned adjustment of the wage level and could not easily be interpreted as a clause guaranteeing automatic extension of the contract term itself; and the multiple re‑executions of the employment contract were due to increases in annual salary and changes in working conditions, and thus could not be regarded as establishing a “practice of renewal.”
On this basis, the Commission held that the worker did not have a renewal expectation right. Consequently, there was no need to further examine whether there were reasonable grounds for refusing renewal, and the claim of unfair dismissal was rejected.
Ⅳ. Practical Points (From the Worker’s Perspective)
From the worker’s perspective, even if the relationship is structured in the form of an annual‑salary contract, subcontracting, or outsourcing, if in substance the worker performs work at a designated place and time under the employer’s direction and supervision, receives wages on a regular basis, and is covered by the four major social insurances through the employer, there is a high likelihood that the Labor Relations Commission will recognize employee status.
However, where the contract term is expressly stated in the employment contract, and where there are no specific provisions on renewal criteria and procedures in the work rules, collective agreements, or internal guidelines, and where past re‑contracting was limited to formal re‑execution associated with changes in wages or conditions, it is difficult to have a renewal expectation right recognized solely on the basis that “contracts have continuously been renewed.” Fixed‑term workers are advised to carefully check, on an ongoing basis, the wording of their contracts, renewal clauses in the work rules, and the renewal practices applicable to workers in comparable positions.
Ⅴ. Practical Points (From the Employer/Company Perspective)
From the employer’s perspective, even if an annual‑salary or “freelancer” format is used, if in reality the work is performed under strong subordination to the employer, the individual may be deemed a worker under the Labor Standards Act. Where the employer designates the place and hours of work, exercises specific direction and supervision, pays wages regularly in the form of base salary, and handles the four major social insurances, a strategy of “denying employee status” is highly risky. Accordingly, the work rules and employment contracts should be aligned with the actual employment relationship.
In addition, when using fixed‑term workers, it is important to clearly specify the contract term, clarify that renewal is at the company’s discretion, and, where renewal criteria and procedures exist, set them out in writing to enhance predictability. If a structure that may give rise to a renewal expectation right (such as long‑term repeated renewals or a practice of “renewal absent special circumstances”) is already in operation, refusal to renew in the future may be evaluated as unfair dismissal. In such cases, it is advisable to reconsider the structure over the medium to long term, including workforce planning and alternatives such as redundancy dismissals.
2. Matters Decided
(a) Case Overview and Procedural History
(a) Whether the worker qualifies as a worker under the Labor Standards Act
(1) The employer executed an “annual‑salary employment contract” with the worker and appears to have exercised direction and supervision through a manager over overall matters such as place of work, job duties, and holidays;
(2) The worker’s job duties and prescribed working hours were changed in the employment contract, with the authority to change such job duties vested in the employer and the place of work specified as the company’s address in this case;
(3) The worker regularly received wages consisting of base salary and meal allowance, and the employer deducted and paid employment insurance premiums from the wages each month;
(4) Although the employer was aware of the worker’s concurrent employment at another establishment, it nevertheless entered into renewed contracts with the worker, which indicates that the employer itself tolerated the worker’s concurrent employment, and thus it appears difficult to deny employee status solely on the ground of lack of exclusivity.
In light of all of the above, the worker qualifies as a worker under the Labor Standards Act.
(b) Whether a renewal expectation right with respect to the employment contract exists
(1) The contract term is specified in the employment contract as 2025.7.1 to 2025.12.31, and no provisions regarding renewal are found in the work rules;
(2) Although the employment contract contains a clause on automatic renewal of annual salary, it is difficult to interpret this clause as one that automatically extends the contract term itself or guarantees renewal;
(3) The multiple re‑executions of the employment contract were due to increases in annual salary and changes in working conditions, and cannot be viewed as establishing a practice of contract renewal.
In light of the foregoing, the worker does not have a renewal expectation right with respect to the employment contract, and therefore there is no need to further examine whether reasonable grounds existed for refusal to renew.
3. Summary of the Decision
(a) Summary of the Labor Relations Commission’s Findings
(a) Whether the worker qualifies as a worker under the Labor Standards Act
(1) The employer executed an “annual‑salary employment contract” with the worker and appears to have exercised direction and supervision through a manager over overall matters such as place of work, job duties, and holidays;
(2) The worker’s job duties and prescribed working hours were changed in the employment contract, with the authority to change such job duties vested in the employer and the place of work specified as the company’s address in this case;
(3) The worker regularly received wages consisting of base salary and meal allowance, and the employer deducted and paid employment insurance premiums from the wages each month;
(4) Although the employer was aware of the worker’s concurrent employment at another establishment, it nevertheless entered into renewed contracts with the worker, which indicates that the employer itself tolerated the worker’s concurrent employment, and thus it appears difficult to deny employee status solely on the ground of lack of exclusivity.
In light of all of the above, the worker qualifies as a worker under the Labor Standards Act.
(b) Whether a renewal expectation right with respect to the employment contract exists
(1) The contract term is specified in the employment contract as 2025.7.1 to 2025.12.31, and no provisions regarding renewal are found in the work rules;
(2) Although the employment contract contains a clause on automatic renewal of annual salary, it is difficult to interpret this clause as one that automatically extends the contract term itself or guarantees renewal;
(3) The multiple re‑executions of the employment contract were due to increases in annual salary and changes in working conditions, and cannot be viewed as establishing a practice of contract renewal.
In light of the foregoing, the worker does not have a renewal expectation right with respect to the employment contract, and therefore there is no need to further examine whether reasonable grounds existed for refusal to renew. /
[Further Related Decisions]
- “Extinction of Interest in Relief (5‑Month Fixed‑Term Contract)” in Unfair Dismissal Decision
- “Non‑Formation of Hiring Commitment (Absence of Offer Letter)” in Unfair Dismissal Decision – Decision date: – Case number: Initial decision upheld
- “Non‑Satisfaction of Requirements for Redundancy Dismissal (Workout Company)” in Unfair Dismissal Decision
[Tags]
Unfair dismissal, denial of employee status (annual salary contract · concurrent employment), 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, “Extinction of Interest in Relief (5‑Month Fixed‑Term Contract) in Unfair Dismissal Decision,” can be viewed in a new window.
※ The list of decisions related to denial of employee status (annual salary contract · concurrent employment) can be viewed together in the “List of Decisions Related to Denial of Employee Status (Annual Salary Contract · Concurrent Employment).”
※ Korean version of this case: Korean article
