[Case Information] This case is a decision in which the employer prevailed (application dismissed) on the issue of “employer standing (denial of legitimate expectation of employment succession).” Decision body: Ulsan Regional Labor Relations Commission 2026Buhae202 ○ ○ ○ Application for Remedy for Unfair Dismissal 2026-07-30 · Case result: Dismissed Summary of key issue: Whether the respondent had employer standing (legitimate expectation of employment succession): ① The bid announcement and service contract contained no provision requiring the new contractor to succeed to the employment of existing workers; ② The respondent in this case is an independent legal entity separate from the previous contractor and did not enter into any separate agreement on business transfer or employment succession; ③ Although the respondent hired many of the previous contractor’s employees, it did not succeed to any of their wage step, length of service, annual leave, severance pay, or other terms and conditions of employment; ④ There was no comprehensive business transfer in which the previous contractor’s human and material organization was transferred as a whole while maintaining its identity; ⑤ There was no confirmed industry practice in the relevant sector that would require automatic employment succession between the outgoing and incoming contractors; etc. 1. Legal Implications Ⅰ. Case Overview In this case, an application for remedy for unfair dismissal was filed with the Ulsan Regional Labor Relations Commission, and the key issue was whether the new contractor had employer standing before the Labor Relations Commission. After the previous contractor’s service/outsourcing contract ended and another company newly won the service contract, a former employee claimed that he should have been continuously employed and challenged the situation as an unfair dismissal. The arguments of the employer, represented by Labor Law Firm Law&, were accepted. Ⅱ. Summary of Issues The issue in this case was whether, in a situation where a bid or service contract is changed, a claim of unfair dismissal can be made against the new contractor only if there is a duty to succeed to employment or at least a “legitimate expectation” of employment succession, thereby establishing employer standing before the Labor Relations Commission. Ⅲ. Summary of the Labor Relations Commission’s Reasoning The panel in this case noted that: the bid announcement and the service contract contained no provision requiring the new contractor to succeed to the employment of existing workers; the respondent is an independent legal entity separate from the previous contractor and did not enter into any separate agreement on business transfer or employment succession; even though the respondent hired many of the previous contractor’s employees, it did not succeed to any of their wage step, length of service, annual leave, severance pay, or other terms and conditions of employment; there was no comprehensive business transfer in which the previous contractor’s human and material organization was transferred as a whole while maintaining its identity; and there was no confirmed practice in the relevant industry of automatic employment succession between outgoing and incoming contractors. In light of the above, the Commission found that the respondent had no legal obligation to succeed to the employment contracts of, or rehire, the former employees, and accordingly that it was difficult to recognize employer standing in the Labor Relations Commission proceedings. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, even where a service/outsourcing contractor changes, if there is no employment succession clause in the bid announcement, outsourcing contract, or business transfer agreement; if wage step, continuous service, severance pay, etc. are not in fact succeeded to; and if there is no established industry practice of employment succession, it will be difficult to challenge the situation as an unfair dismissal based solely on the fact that “the same work has continued to be performed at the same place.” Therefore, when a contract change is anticipated, it is important to secure in advance an agreement on employment succession, a written re-employment commitment, or materials supporting the existence of a relevant practice. Ⅴ. Practical Points (From the Employer/Company’s Perspective) From the employer’s perspective, separate and apart from redundancy dismissals or contract terminations, the question of whether a duty of employment succession arises upon a change of contractor or service provider is the starting point of an unfair dismissal dispute. It is helpful for dispute prevention to clearly specify in the bid announcement and service contract whether employment succession will occur, and, even when hiring existing workers, to newly set wage steps, annual leave, severance pay, etc., so that the structure is not misunderstood as a comprehensive succession based on business transfer or established practice. In this type of case, before the issue of whether an unfair dismissal has occurred is examined, the threshold question in practice is the determination of “employer standing” before the Labor Relations Commission, namely whether a duty of employment succession or a legitimate expectation thereof can be recognized. 2. Matters Decided a. Case Overview and Procedural History Whether employer standing existed (legitimate expectation of employment succession): ① the bid announcement and service contract contained no provision requiring the new contractor to succeed to the employment of existing workers; ② the respondent in this case is an independent legal entity separate from the previous contractor and did not enter into any separate agreement on business transfer or employment succession; ③ although the respondent hired many of the previous contractor’s employees, it did not succeed to any of their wage step, length of service, annual leave, severance pay, or other terms and conditions of employment; ④ there was no comprehensive business transfer in which the previous contractor’s human and material organization was transferred as a whole while maintaining its identity; ⑤ no industry practice of employment succession was confirmed; ⑥ the employment between the parties was… 3. Summary of Decision a. Summary of the Labor Relations Commission’s Reasoning Whether employer standing existed (legitimate expectation of employment succession): ① the bid announcement and service contract contained no provision requiring the new contractor to succeed to the employment of existing workers; ② the respondent in this case is an independent legal entity separate from the previous contractor and did not enter into any separate agreement on business transfer or employment succession; ③ although the respondent hired many of the previous contractor’s employees, it did not succeed to any of their wage step, length of service, annual leave, severance pay, or other terms and conditions of employment; ④ there was no comprehensive business transfer in which the previous contractor’s human and material organization was transferred as a whole while maintaining its identity; ⑤ no industry practice of employment succession was confirmed; ⑥ the employment between the parties was… / [See More Related Decisions] - ‘Unfair Dismissal Decision Concerning “Expiry of Fixed-Term Contract (Express Short-Term Contract)”’ - ‘Unfair Dismissal Decision Concerning “Non-Formation of Hiring Commitment (Absence of Offer Letter)”’ – Date of decision: – Case result: First-instance decision upheld - ‘Unfair Dismissal Decision Concerning “Expression of Intent to Resign (Resignation Remark Made by Telephone)”’ [Tags] Unfair dismissal, employer standing (denial of legitimate expectation of employment succession), 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, “Unfair Dismissal Decision Concerning ‘Expiry of Fixed-Term Contract (Express Short-Term Contract)’,” can be viewed in a new window. ※ The list of decisions related to employer standing (denial of legitimate expectation of employment succession) can be viewed together in the “List of Decisions Related to Employer Standing (Denial of Legitimate Expectation of Employment Succession).” ※ Korean version of this case: Korean article