[Case Information] This case is a decision in which the employer prevailed (application dismissed) on the issue of “expectation of renewal (daily workers linked to termination of prime contract).” Decision body: Ulsan Regional Labor Relations Commission 2026Buhae175 ○ ○ ○ Application for Remedy for Unfair Dismissal 2026-06-30 · Case result: Dismissed Summary of key issues: ... 1. Legal Implications Ⅰ. Case Overview In this case, rebar and painting workers employed by Sangwon Heavy Industries Co., Ltd. had repeatedly renewed one‑month daily employment contracts. On April 13, 2026, their employment was succeeded by the respondent (the prime contractor). Thereafter, the respondent refused to renew their employment contracts. The workers filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal, arguing that they had an expectation of renewal of their employment contracts, and that the respondent’s termination of their employment on May 1, 2026, on the ground of contract expiration, constituted unfair dismissal. Ⅱ. Issues The issue in this case is whether, where a daily worker employed by a subcontractor has repeatedly entered into one‑month employment contracts and is then taken over by the prime contractor, and where there is an agreement that the employment contract automatically terminates upon termination of the contract between the prime contractor and the client, a legitimate “expectation of renewal” of the employment contract can nonetheless be recognized, such that notice of expiration of the contract term constitutes unfair dismissal. Ⅲ. Summary of the Labor Relations Commission’s Findings The panel in this case noted that the daily employment contracts entered into between the applicants and the subcontractor expressly provided that “the employment contract automatically terminates upon termination of the contract by the client or the prime contractor”; that neither the employment contracts nor the rules of employment or collective agreements contained any provisions stipulating that the contracts would be renewed upon satisfaction of certain conditions, nor any provisions setting out renewal requirements or procedures; and that, for similar workers, there were cases where the employment relationship had ended upon expiration of the contract term, indicating that renewals had been flexibly carried out at the employer’s discretion. In light of these circumstances, the panel found it difficult to conclude that a legitimate expectation of renewal of the employment contracts had been formed on the part of the applicants. Accordingly, the panel held that the “dismissal” in this case was in fact the termination of the employment contracts upon expiration of the contract term, and did not constitute unfair dismissal. Ⅳ. Practical Points (From the Employee’s Perspective) Even if a fixed‑term or daily worker has had contracts repeatedly renewed, where the employment contract contains an explicit termination ground such as “automatic termination upon termination of the prime contractor’s or client’s contract,” and there are no separate provisions on renewal requirements or procedures, it will be difficult to have an expectation of renewal recognized. In particular, where the employment contract is structured so that its continuation is linked to the continued existence of the underlying business, such as the prime contractor’s construction contract or subcontract, it is necessary to clearly confirm in writing, prior to the contract’s expiration, one’s employment type and contract terms (including grounds for termination). Ⅴ. Practical Points (From the Employer/Company’s Perspective) When employing daily or fixed‑term workers whose employment is linked to contracts with a prime contractor or client, it is important to specify in the employment contract the contract term and the grounds for automatic termination, and to clearly state that renewal is at the employer’s discretion and that there are no separate renewal requirements or procedures. In actual practice, if only some workers are customarily renewed for long periods, or if oral assurances are given that employment will be guaranteed until retirement age, there is a risk that an expectation of renewal will be recognized. Accordingly, HR and labor management should be aligned so that renewal practices and explanations given to workers are consistent with the written documents. This decision of the Ulsan Regional Labor Relations Commission is a good illustration, in the context of unfair dismissal cases involving fixed‑term or daily workers where the recognition of an “expectation of renewal” is a key issue, of how important contract clauses and actual operational practices are. To prevent similar disputes, both employees and employers should, with the assistance of experts such as Labor Law Firm Law&, review in advance their contract structures and explanatory practices. 2. Matters Decided a. Case Overview and Procedural History ... The applicants joined Sangwon Heavy Industries Co., Ltd. as rebar and painting workers and repeatedly entered into one‑month employment contracts. Their employment was succeeded by the respondent company as of April 13, 2026. They argue that, despite having an expectation of renewal of their employment contracts, the respondent failed to renew the contracts and instead notified them on May 1, 2026 that their employment contracts had expired, which constitutes unfair dismissal. b. It is difficult to find that an expectation of renewal of the employment contracts is recognized, for the following reasons: 1) The daily employment contracts entered into between the applicants and the subcontractor in this case (Sangwon Heavy Industries Co., Ltd.) provide that the employment contracts automatically terminate upon termination of the contract by the client or the prime contractor. 2) The respondent, in 2026, ... 3. Summary of the Decision a. Summary of the Labor Relations Commission’s Findings ... The applicants joined Sangwon Heavy Industries Co., Ltd. as rebar and painting workers and repeatedly entered into one‑month employment contracts. Their employment was succeeded by the respondent company as of April 13, 2026. They argue that, despite having an expectation of renewal of their employment contracts, the respondent failed to renew the contracts and instead notified them on May 1, 2026 that their employment contracts had expired, which constitutes unfair dismissal. b. It is difficult to find that an expectation of renewal of the employment contracts is recognized, for the following reasons: 1) The daily employment contracts entered into between the applicants and the subcontractor in this case (Sangwon Heavy Industries Co., Ltd.) provide that the employment contracts automatically terminate upon termination of the contract by the client or the prime contractor. 2) The respondent, in 2026, ... / [See More Related Decisions] - “‘Non‑Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision” – Date of decision: - Case result: First‑instance decision upheld - “‘Dismissal of Application (Non‑Appearance at Hearing)’ Unfair Dismissal Decision” – Date of decision: - Case result: Dismissed - “‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Decision” [Tags] Unfair dismissal, expectation of renewal (daily workers linked to termination of prime 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&. ※ You can view the previous article, “‘Denial of Employee Status (Lack of Employer’s Direction and Supervision)’ Unfair Dismissal Decision,” in a new window. ※ The list of decisions related to expectation of renewal (daily workers linked to termination of prime contract) can be viewed together in the “Expectation of Renewal (Daily Workers Linked to Termination of Prime Contract) Related Decisions” list. ※ Korean version of this case: Korean article