[Case Information] This case is a decision in which the employer ultimately prevailed (application dismissed) on the issue of “expectation of renewal (daily workers linked to termination of the principal contract).” Date of Decision: 2026-06-30 · Labor Relations Commission: Ulsan Regional Labor Relations Commission · Case No.: 2026Buhae175 Key Issue Summary: 1. 1. Legal Implications Ⅰ. Case Overview In this case, workers employed by Sangwon Heavy Industries Co., Ltd. as rebar and painting workers had been repeatedly entering into one-month fixed-term employment contracts. During the construction project, the subcontract for the work was terminated, and the workers were then directly hired by the principal contractor. After a short fixed-term contract with the principal contractor ended and was not renewed, the workers filed an application with the Labor Relations Commission, claiming that this constituted unfair dismissal. The Ulsan Regional Labor Relations Commission focused its review on whether unfair dismissal had occurred and, in particular, on whether there existed a legitimate expectation of renewal of the employment contracts (expectation of renewal). Ⅱ. Issues The issue in this case is whether, in a situation where a worker who had been entering into one‑month employment contracts with a subcontractor is hired by the principal contractor on a short fixed-term basis following the termination of the subcontract, there can be recognition of employment succession or an expectation of renewal of the employment contract vis‑à‑vis the principal contractor, and consequently, whether notification of expiration of the contract term constitutes unfair dismissal. Ⅲ. Summary of the Labor Relations Commission’s Reasoning The panel in this case noted that, in the principal–subcontractor structure, the daily employment contracts with the subcontractor contained a clause providing that the employment contract would automatically terminate upon termination of the contract by the client or principal contractor; that the principal contractor in fact terminated the subcontract with the subcontractor on the ground of breach of the subcontract; and that the contracts subsequently concluded with the workers were merely short-term fixed-term employment contracts (2026.4.13–4.30) for the purpose of completing the remaining construction work. The panel further observed that there were no provisions in the employment contracts, work rules, or collective agreements stating that “upon expiration of the term, the contract will be renewed if certain conditions are met”; that there was no history of repeated renewals of contracts between the workers and the principal contractor; that the contracts clearly stated that the employment relationship would automatically terminate upon expiration of the contract term; and that the construction progress rate was 99.5%, meaning the project was effectively at the final stage. In light of the above, the panel held that there was no dismissal in this case, but merely a termination of the employment relationship due to the expiration of the fixed term, and that it was difficult to find that a relationship of trust had been formed that would give the workers an expectation of renewal of their employment contracts or employment succession vis‑à‑vis the principal contractor. On this basis, the workers’ claim of unfair dismissal was dismissed. Ⅳ. Practical Points (From the Employee’s Perspective) Even if an employment contract has been repeatedly renewed on a one‑month basis, if there are no specific criteria or procedures for renewal in the contract, work rules, or collective agreement, and no actual practice of renewal has been established in relation to the principal contractor, the Labor Relations Commission is reluctant to recognize an expectation of renewal. In particular, where a worker temporarily moves from a subcontractor to the principal contractor for a “limited period,” it is difficult to obtain relief for unfair dismissal based solely on a subjective belief that “I will probably be able to continue working.” Therefore, workers should carefully check in advance the automatic termination clauses in the contract, the stage of progress of the construction, and whether there is any agreement on employment succession. Ⅴ. Practical Points (From the Employer’s/Company’s Perspective) From the employer’s perspective, when using fixed-term workers, it is important to clearly stipulate in the contract the contract period, end date, and automatic termination clause, and to manage the criteria and procedures for deciding on renewal in a manner consistent with actual practice. In particular, when hiring workers on a short-term basis to complete remaining work after termination of a subcontract, the employer should clearly explain in writing that this is a temporary hire and not employment succession, and should sufficiently inform the workers of the stage of completion of the project and the possibility that the work will cease to exist, in order to prevent unnecessary disputes over unfair dismissal. 2. Matters Decided a. Case Overview and Procedural History Application dismissed due to absence of expectation of renewal 3. Summary of Decision a. Summary of the Labor Relations Commission’s Reasoning 1. Expectation of Renewal of Employment Contract a. The applicants entered Sangwon Heavy Industries Co., Ltd. as rebar and painting workers between 2025. 9. 22. and 2026. 3. 31., and repeatedly entered into one‑month employment contracts. They assert that, as of 2026. 4. 13., their employment was succeeded by the respondent company, thereby giving rise to an expectation of renewal of their employment contracts, and that the respondent’s failure to renew their contracts and its notification on 2026. 5. 1. that their contracts had expired constitutes unfair dismissal. b. However, in light of the following circumstances, it is difficult to recognize an expectation of renewal of the employment contracts: 1) The daily employment contracts concluded between the applicants and the subcontractor in this case (Sangwon Heavy Industries Co., Ltd.) provided that the employment contracts would automatically terminate upon termination of the contract by the client or principal contractor. 2) On 2026. 4. 10., the respondent notified the subcontractor in this case (Sangwon Heavy Industries Co., Ltd.) of termination of the subcontract on the ground of breach of the subcontract. 3) It is true that the respondent concluded fixed-term employment contracts (2026. 4. 13–4. 30.) with the applicants for the purpose of completing the remaining construction work; however, there appears to be insufficient evidence to regard this as employment succession. 4) There are no provisions in the employment contracts, work rules, or collective agreements to the effect that, notwithstanding expiration of the term, the employment contract will be renewed if certain conditions are met. 5) The employment contracts concluded between the respondent and the applicants provide that the employment relationship will automatically terminate upon expiration of the contract period (2026. 4. 13–4. 30). 6) The applicants have never renewed their employment contracts after joining the respondent company. 7) At the time the applicants’ employment contracts expired, the construction project in this case was almost complete (progress rate: 99.5%). 2. Reasonable Grounds for Refusal to Renew Employment Contracts No further review is necessary. 3. Non-Existence of Dismissal [See More Related Decisions] - “Unfair Dismissal Decision on ‘Relief Interest·Refusal to Rehire (Post-Retirement Fixed-Term Employment)’” - “Unfair Dismissal Decision on ‘Expectation of Employment Succession (Logistics Center Competitive Bidding)’” - “Unfair Dismissal Decision on ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’” – Date of Decision: - Case No.: First-Instance Decision Upheld [Tags] Unfair dismissal, expectation of renewal (daily workers linked to termination of principal contract), 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 the “Unfair Dismissal Decisions” series by Labor Law Firm Law&. ※ The previous article, “Unfair Dismissal Decision on ‘Denial of Employee Status (Absence of Employer’s Direction and Supervision)’,” can be viewed in a new window. ※ The list of decisions related to expectation of renewal (daily workers linked to termination of principal contract) can be viewed together in the “List of Decisions Related to Expectation of Renewal (Daily Workers Linked to Termination of Principal Contract).” ※ Korean version of this case: Korean article