Corporate trends / Performance record
Non-Existence of a Legitimate Expectation of Renewal (Expiry of Employment Contract Term) in Unfair Dismissal Decisions (Unfair Dismissal 467)
- Date2026/05/21 04:04
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[Case Information]
This case concerns a decision in which the employer prevailed (application dismissed) on the issue of “non-existence of a legitimate expectation of renewal (expiry of employment contract term).”
Decision-making body: Gyeonggi Regional Labor Relations Commission, 2026Buhae29 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.03.20 · Case result: Dismissed
Key issue summary: (1) The employment contract stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate.”
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee applied to the Labor Relations Commission for a remedy, claiming unfair dismissal after the employer declined to renew the contract and terminated the employment relationship, despite the employee’s expectation of continued employment beyond the contract term. The Gyeonggi Regional Labor Relations Commission reviewed the employment contract and the actual operation of the workplace to determine whether the situation constituted unfair dismissal. Based on the Commission’s reasoning and legal analysis, this article summarizes key takeaways that both employees and employers may find useful in similar cases, from the perspective of Labor Law Firm Law&.
Ⅱ. Summary of Issues
The issue in this case is whether, where an employment contract is expressly fixed-term and the contract simply expires without any separate measure of redundancy dismissal or disciplinary dismissal, the employee can be recognized as having a legitimate “expectation of renewal” of the employment contract such that refusal to renew constitutes unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The decision panel noted that the employment contract clearly stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate”; that no rules of employment had been established at the workplace and thus there were no other written provisions from which an expectation of renewal could be inferred; that there were no statements or written assurances from the employer that could reasonably be interpreted as a firm commitment to renew the employment contract, nor any objective evidence to that effect; and that no practice of repeated contract renewals had been confirmed.
In light of these factors, the panel found it difficult to conclude that a relationship of trust had been formed under which the employee could reasonably believe that a new contract would be executed upon satisfaction of certain conditions.
Accordingly, the panel held that no “dismissal” existed in this case, and that the employment relationship between the parties lawfully terminated upon expiry of the contract term. The employee’s claim of unfair dismissal was therefore rejected.
Ⅳ. Practical Points (From the Employee’s Perspective)
Fixed-term employees should be aware that, where the contract specifies a term and contains only a clause providing for “automatic termination upon expiry,” a mere subjective expectation based on observations such as “everyone seems to keep working” will generally not suffice to establish a legitimate expectation of renewal in the absence of separate rules, practices, or assurances. For such an expectation to be recognized, there should be concrete provisions on the conditions and procedures for renewal in rules of employment, collective agreements, or internal guidelines, or an objectively formed trust—arising from repeated renewals or established renewal practices for similarly situated employees—that “renewal will occur absent special circumstances.”
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
When employing fixed-term workers, companies should clearly specify the contract term and the method of termination (automatic termination upon expiry) in the employment contract, and design consistent standards for contract renewal in their rules of employment or HR guidelines. If, at each renewal, the company repeatedly renews contracts in effect automatically without specific evaluation criteria, or if ambiguous statements and practices such as “if you work diligently, we will keep you on” accumulate over time, a legitimate expectation of renewal may be recognized and refusal to renew may be evaluated as unfair dismissal. Employers should therefore clearly document the standards and procedures for renewal and operate in accordance with those standards.
2. Matters Determined
A. Case Overview and Procedural History
(1) The employment contract merely stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate,” and contained no provision to the effect that the employment contract would be renewed upon satisfaction of certain conditions; (2) no rules of employment had been established at the workplace, and no other written provisions from which an expectation of renewal could be inferred were identified; (3) there were no circumstances suggesting that the employer had firmly assured the employee of renewal of the employment contract, nor was there any objective evidence to that effect; and (4) no practice of contract renewal was confirmed, and thus no trust or practice regarding renewal of the employment contract appeared to have been formed between the parties. In light of the foregoing, the employee was not recognized as having a legitimate expectation of renewal of the employment contract. The employment relationship between the parties was therefore deemed to have lawfully terminated upon expiry of the contract term.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(1) The employment contract merely stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate,” and contained no provision to the effect that the employment contract would be renewed upon satisfaction of certain conditions; (2) no rules of employment had been established at the workplace, and no other written provisions from which an expectation of renewal could be inferred were identified; (3) there were no circumstances suggesting that the employer had firmly assured the employee of renewal of the employment contract, nor was there any objective evidence to that effect; and (4) no practice of contract renewal was confirmed, and thus no trust or practice regarding renewal of the employment contract appeared to have been formed between the parties. In light of the foregoing, the employee was not recognized as having a legitimate expectation of renewal of the employment contract. The employment relationship between the parties was therefore deemed to have lawfully terminated upon expiry of the contract term. /
[See More Related Decisions]
- “Expression of Intent to Resign (Resignation Remark During Telephone Call)” – Unfair Dismissal Decision
- “No Formation of Hiring Commitment (Absence of Offer Letter)” – Unfair Dismissal Decision – Decision date: – Case result: First-instance decision upheld
- “Dismissal of Application (Non-Appearance at Hearing)” – Unfair Dismissal Decision – Decision date: – Case result: Dismissed
[Tags]
Unfair dismissal, non-existence of a legitimate expectation of renewal (expiry of employment contract term), 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, “‘Excessive Disciplinary Measure (Verbal Abuse Arising from Conflict with Superior)’ – Unfair Dismissal Decision,” can be viewed in a new window.
※ A list of decisions related to non-existence of a legitimate expectation of renewal (expiry of employment contract term) can be found under “List of Decisions on Non-Existence of a Legitimate Expectation of Renewal (Expiry of Employment Contract Term).”
※ Korean version of this case: Korean article
This case concerns a decision in which the employer prevailed (application dismissed) on the issue of “non-existence of a legitimate expectation of renewal (expiry of employment contract term).”
Decision-making body: Gyeonggi Regional Labor Relations Commission, 2026Buhae29 ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026.03.20 · Case result: Dismissed
Key issue summary: (1) The employment contract stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate.”
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee applied to the Labor Relations Commission for a remedy, claiming unfair dismissal after the employer declined to renew the contract and terminated the employment relationship, despite the employee’s expectation of continued employment beyond the contract term. The Gyeonggi Regional Labor Relations Commission reviewed the employment contract and the actual operation of the workplace to determine whether the situation constituted unfair dismissal. Based on the Commission’s reasoning and legal analysis, this article summarizes key takeaways that both employees and employers may find useful in similar cases, from the perspective of Labor Law Firm Law&.
Ⅱ. Summary of Issues
The issue in this case is whether, where an employment contract is expressly fixed-term and the contract simply expires without any separate measure of redundancy dismissal or disciplinary dismissal, the employee can be recognized as having a legitimate “expectation of renewal” of the employment contract such that refusal to renew constitutes unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Decision
The decision panel noted that the employment contract clearly stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate”; that no rules of employment had been established at the workplace and thus there were no other written provisions from which an expectation of renewal could be inferred; that there were no statements or written assurances from the employer that could reasonably be interpreted as a firm commitment to renew the employment contract, nor any objective evidence to that effect; and that no practice of repeated contract renewals had been confirmed.
In light of these factors, the panel found it difficult to conclude that a relationship of trust had been formed under which the employee could reasonably believe that a new contract would be executed upon satisfaction of certain conditions.
Accordingly, the panel held that no “dismissal” existed in this case, and that the employment relationship between the parties lawfully terminated upon expiry of the contract term. The employee’s claim of unfair dismissal was therefore rejected.
Ⅳ. Practical Points (From the Employee’s Perspective)
Fixed-term employees should be aware that, where the contract specifies a term and contains only a clause providing for “automatic termination upon expiry,” a mere subjective expectation based on observations such as “everyone seems to keep working” will generally not suffice to establish a legitimate expectation of renewal in the absence of separate rules, practices, or assurances. For such an expectation to be recognized, there should be concrete provisions on the conditions and procedures for renewal in rules of employment, collective agreements, or internal guidelines, or an objectively formed trust—arising from repeated renewals or established renewal practices for similarly situated employees—that “renewal will occur absent special circumstances.”
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
When employing fixed-term workers, companies should clearly specify the contract term and the method of termination (automatic termination upon expiry) in the employment contract, and design consistent standards for contract renewal in their rules of employment or HR guidelines. If, at each renewal, the company repeatedly renews contracts in effect automatically without specific evaluation criteria, or if ambiguous statements and practices such as “if you work diligently, we will keep you on” accumulate over time, a legitimate expectation of renewal may be recognized and refusal to renew may be evaluated as unfair dismissal. Employers should therefore clearly document the standards and procedures for renewal and operate in accordance with those standards.
2. Matters Determined
A. Case Overview and Procedural History
(1) The employment contract merely stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate,” and contained no provision to the effect that the employment contract would be renewed upon satisfaction of certain conditions; (2) no rules of employment had been established at the workplace, and no other written provisions from which an expectation of renewal could be inferred were identified; (3) there were no circumstances suggesting that the employer had firmly assured the employee of renewal of the employment contract, nor was there any objective evidence to that effect; and (4) no practice of contract renewal was confirmed, and thus no trust or practice regarding renewal of the employment contract appeared to have been formed between the parties. In light of the foregoing, the employee was not recognized as having a legitimate expectation of renewal of the employment contract. The employment relationship between the parties was therefore deemed to have lawfully terminated upon expiry of the contract term.
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(1) The employment contract merely stated, “This is a fixed-term employment contract, and upon expiry of the contract term, the employment relationship shall automatically and naturally terminate,” and contained no provision to the effect that the employment contract would be renewed upon satisfaction of certain conditions; (2) no rules of employment had been established at the workplace, and no other written provisions from which an expectation of renewal could be inferred were identified; (3) there were no circumstances suggesting that the employer had firmly assured the employee of renewal of the employment contract, nor was there any objective evidence to that effect; and (4) no practice of contract renewal was confirmed, and thus no trust or practice regarding renewal of the employment contract appeared to have been formed between the parties. In light of the foregoing, the employee was not recognized as having a legitimate expectation of renewal of the employment contract. The employment relationship between the parties was therefore deemed to have lawfully terminated upon expiry of the contract term. /
[See More Related Decisions]
- “Expression of Intent to Resign (Resignation Remark During Telephone Call)” – Unfair Dismissal Decision
- “No Formation of Hiring Commitment (Absence of Offer Letter)” – Unfair Dismissal Decision – Decision date: – Case result: First-instance decision upheld
- “Dismissal of Application (Non-Appearance at Hearing)” – Unfair Dismissal Decision – Decision date: – Case result: Dismissed
[Tags]
Unfair dismissal, non-existence of a legitimate expectation of renewal (expiry of employment contract term), 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, “‘Excessive Disciplinary Measure (Verbal Abuse Arising from Conflict with Superior)’ – Unfair Dismissal Decision,” can be viewed in a new window.
※ A list of decisions related to non-existence of a legitimate expectation of renewal (expiry of employment contract term) can be found under “List of Decisions on Non-Existence of a Legitimate Expectation of Renewal (Expiry of Employment Contract Term).”
※ Korean version of this case: Korean article
