[Case Information] This case is a decision in which the employer prevailed (application dismissed) on the issue of “employer standing (denial of expectation right to employment succession).” Decision date: 2026-07-30 · Decision body: Ulsan Regional Labor Relations Commission · Case No.: 2026Buhae202 Key issue summary: Whether employer standing exists (expectation right to employment succession): ① the bid announcement and service contract contained no provision on succession of existing employees, ② the employer in this case is an independent legal entity separate from the previous business entity and did not enter into any separate agreement on business transfer or employment succession, ③ although the employer hired many employees from the previous business, it did not succeed to their salary step, length of service, annual leave, severance pay, etc., ④ the human and material organization of the previous business... --- 1. Legal Implications Ⅰ. Case Overview This unfair dismissal case concerns whether a company that newly secured a service contract before the Ulsan Regional Labor Relations Commission was under an obligation to succeed to employment, and further, whether it had employer standing to be named as the respondent in an unfair dismissal relief application. The employee, relying on his/her continuous service at the previous workplace, applied to the Labor Relations Commission for relief, asserting that employment should be succeeded to the new contractor. The Commission examined, in a comprehensive manner, the bidding and contracting structure, the actual hiring process, and industry practice, focusing on whether the employer had an obligation to succeed to employment and whether the employee could be recognized as having an “expectation right” to employment succession. Ⅱ. Issues The issue in this case is whether, “in the course of a change in bidder/contractor, an employee may claim relief for unfair dismissal against the new employer based solely on an expectation right to employment succession, even in the absence of any separate agreement or established practice, that is, whether employer standing can be recognized.” 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 succession of existing employees; that the new employer is an independent legal entity separate from the previous business entity and had not entered into any separate agreement on business transfer or employment succession; that even though the new employer hired many of the previous employees, it did not succeed to their salary step, length of service, annual leave, severance pay, etc.; that it was difficult to view the situation as a business transfer in which the human and material organization of the previous business had been comprehensively transferred while maintaining its identity; that no practice of employment succession could be confirmed in the same industry; and that it was difficult to find that a relationship of trust had formed between the parties under which employment would naturally be succeeded. Accordingly, the Commission held that the employer was under no obligation to succeed to employment, and that it was difficult to recognize any expectation right to employment succession on the part of the employee. Ultimately, in this unfair dismissal relief application against the new contractor, the dismissal measure was found to be a case in which the essential requirement of “employer standing” itself was denied, and the Labor Relations Commission decided that the employer in this case could not be the respondent to the relief application. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s perspective, it should be noted that a change in business operator or a change in contractor/outsourcing entity does not automatically result in succession of employment, nor does it automatically determine the counterparty in an unfair dismissal dispute. Before preparing for legal action such as an unfair dismissal relief application or a wage claim, it is necessary to first confirm whether there is a clause on employment succession in the bid announcement or outsourcing contract, whether there is a consistent practice of employment succession in the same industry, and whether there are specific circumstances in which succession was promised to you. In addition, the mere fact that you were rehired each time a different service provider was changed in the past does not always lead to recognition of an expectation right to employment succession. You should carefully review, together with experts such as Labor Law Firm Law&, whether the level of practice or agreement required in actual court precedents and Labor Relations Commission decisions is present. Ⅴ. Practical Points (From the Employer (Company) Perspective) From the employer’s perspective, it is very important for dispute prevention to clearly set out, at the stage of drafting bid announcements and service/outsourcing contracts, whether employment succession will occur and, if so, its scope. In particular, even when hiring some of the previous employees, you should clearly document whether salary step, length of service, severance pay, and continuity of working conditions will be succeeded, in order to reduce unnecessary disputes over employment succession and unfair dismissal. At the same time, the legal assessment may differ depending on whether, in the same industry, a de facto practice of employment succession has been formed, and whether the contract with the ordering party includes recommendations or obligations regarding employment succession. Therefore, from the contract negotiation stage, you should consult with experts such as Labor Law Firm Law& to pre-emptively review risks relating to employer standing and employment succession. 2. Matters Decided a. Case Overview and Procedural History This is a case in which it was determined that employer standing could not be recognized, on the grounds that it was difficult to find an obligation on the part of the employer to succeed to employment, and therefore difficult to recognize an expectation right to employment succession on the part of the employee. 3. Summary of the Decision a. Summary of the Labor Relations Commission’s Reasoning Whether employer standing exists (expectation right to employment succession) ① The bid announcement and the service contract contained no provision requiring succession of existing employees; ② the employer in this case is an independent legal entity separate from the previous business entity and there is no fact of having entered into a separate agreement on business transfer or employment succession; ③ although the employer hired many employees from the previous business, it did not succeed to their salary step, length of service, annual leave, severance pay, etc.; ④ there is no fact of a comprehensive business transfer in which the human and material organization of the previous business was transferred as a whole while maintaining its identity; ⑤ no practice of employment succession in the same industry can be confirmed; and ⑥ it is difficult to find that a relationship of trust had formed between the parties under which employment would naturally be succeeded. In light of all of the above, the employer has no obligation to succeed to employment, and the employee cannot be recognized as having an expectation right to employment succession. Therefore, the employer in this case does not have employer standing. [See More Related Decisions] - “Unfair Dismissal Decision on ‘Expectation Right to Employment Succession (Competitive Bidding for Logistics Center)’” - “Unfair Dismissal Decision on ‘Interest in Relief · Refusal to Rehire (Post-Retirement Fixed-Term Employment)’” - “Unfair Dismissal Decision on ‘Business Necessity (Reassignment of Cleaning Staff)’” [Tags] Unfair dismissal, employer standing (denial of expectation right to 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. ※ You can view the previous article, “Unfair Dismissal Decision on ‘Expiry of Contract Term (Express Short-Term Contract)’,” in a new window. ※ The list of decisions related to employer standing (denial of expectation right to employment succession) can be viewed together in the “List of Decisions on Employer Standing (Denial of Expectation Right to Employment Succession).” ※ Korean version of this case: Korean article