[Case Information] This case concerns a decision in which the employer prevailed (application dismissed) on the issue of “refusal to renew (two-year cumulative performance evaluation index).” Decision Committee: Jeonnam Regional Labor Relations Commission 2026부해683 ○ ○ ○ Application for Remedy for Unfair Dismissal 2026-09-04 · Case outcome: Dismissed Summary of key issues: A. Existence of a legitimate expectation of renewal The employer regularly conducted performance evaluations for fixed-term employees in order to decide whether to renew their employment contracts, and the contracts of fixed-term employees had been repeatedly renewed. Accordingly, a relationship of trust had been formed between the parties to the employment contract that the contract would be renewed if certain conditions were met, and the employee therefore had a legitimate expectation of contract renewal. 1. Legal Implications Ⅰ. Case Overview In this case, a fixed-term employee whose employment contract had been repeatedly renewed filed an application for remedy with the Labor Relations Commission, claiming unfair dismissal after the employer refused to renew the contract on the ground of the employee’s performance evaluation results. The Jeonnam Regional Labor Relations Commission focused on the practice of contract renewal and the actual operation of the evaluation system to determine whether a legitimate expectation of renewal existed and whether there was a reasonable ground for the refusal to renew. The Labor Relations Commission dismissed the application for remedy for unfair dismissal. Ⅱ. Summary of Issues The issues in this case are whether a fixed-term employee whose contract has been repeatedly renewed has a legitimate expectation of renewal, and whether the employer had a reasonable ground for refusing renewal based on the cumulative performance evaluation index for the most recent two years. Ⅲ. Summary of the Labor Relations Commission’s Reasoning The decision panel in this case found as follows: the employer had regularly conducted performance evaluations for fixed-term employees and had repeatedly renewed their contracts based on those evaluation results; on the premise of such a practice, a relationship of trust had been formed that the contract would be renewed if certain conditions were satisfied, and thus the employee had a legitimate expectation of renewal; taking the cumulative index for the most recent two years as the evaluation period could be regarded as a reasonable standard in light of the nature of the work and the way the evaluation system was operated; and objective indicators confirmed that, during the evaluation period, the employee’s performance was low or problematic to a degree that justified non-renewal of the contract. Accordingly, the Commission held that the dismissal in this case could not be regarded as unfair and dismissed the application for remedy for unfair dismissal. [Structure of the Labor Relations Commission’s Reasoning – Legal Analysis] In line with Supreme Court precedent, the Labor Relations Commission first examined not only the existence of provisions in the employment contract, work rules, or collective agreement, but also the actual practice of renewal, the existence of an evaluation system, and the continuity of the work, in order to determine whether a legitimate expectation of renewal existed. In this case, based on the practice of regular evaluations and repeated renewals, it recognized a relationship of trust that “the contract will be renewed if certain conditions are met,” and thus treated the expiration of the term not as a simple contract termination, but as falling within the scope where the legal principles on restrictions on dismissal are applied by analogy. Next, given that a legitimate expectation of renewal was recognized, the Commission applied Supreme Court precedent requiring the employer to prove a “reasonable ground” for refusing renewal (the legal principles on reasonable grounds for refusal to renew a contract). It examined the appropriateness of setting the evaluation period as the most recent two years’ cumulative index, the objectivity and consistency of the evaluation criteria, and whether the employee’s job performance and results were poor. It concluded that the evaluation method was not arbitrary or discriminatory in its operation, and that the relatively low performance of the employee was supported by figures and materials, thereby acknowledging that there was a socially acceptable, reasonable ground for the refusal to renew. Ⅳ. Practical Points (From the Employee’s Perspective) From the employee’s standpoint, it is important to note that the mere fact that a contract has been renewed several times does not automatically give rise to a legitimate expectation of renewal. The key factors are how the evaluation system, renewal criteria, and actual practice have been operated. In addition, to challenge a refusal to renew as unfair, the employee must specifically prove, with concrete materials, that their performance evaluation was conducted arbitrarily without objective criteria, or that they were evaluated in a discriminatory manner compared to similarly situated employees. When consulting with experts such as Labor Law Firm Law&, it is very important in an unfair dismissal dispute to gather as much documentation as possible, including prior contracts, performance evaluation forms, colleagues’ evaluation results, and examples of renewal and non-renewal. Ⅴ. Practical Points (From the Employer/Company Perspective) From the employer’s perspective, if you are conducting regular performance evaluations for fixed-term employees and linking those evaluations to decisions on contract renewal, that practice itself can become an important basis for the formation of a legitimate expectation of renewal. Accordingly, it is necessary to clearly document the evaluation criteria and procedures in advance, apply them consistently in actual operation, and maintain records that allow you to objectively explain the link between evaluation results and renewal decisions. Furthermore, if the reason for refusing renewal is based on the employee’s lack of job competence or poor performance, you must systematically retain records such as quantified evaluation results over a recent period (e.g., two years), warnings and guidance given, and whether training opportunities were provided, so that you can prove “reasonable grounds” before the Labor Relations Commission or the courts. As with collective redundancies, it is advisable to develop the habit of distinguishing and organizing the need for personnel management from the reasons for selecting individual employees. 2. Matters Decided A. Case Overview and Procedural History A. Existence of a legitimate expectation of renewal The employer regularly conducted performance evaluations for fixed-term employees in order to decide whether to renew their employment contracts, and, since the contracts of fixed-term employees had been repeatedly renewed, a relationship of trust had been formed between the parties to the employment contract that the contract would be renewed if certain conditions were met. Therefore, the employee had a legitimate expectation of renewal of the employment contract. B. Existence of a reasonable ground for refusal to renew It appears that there was a reasonable ground for the employer to set the cumulative index for the most recent two years as the evaluation period, and that, during the evaluation period, the employee’s performance was such that the employer could decide not to renew the employment contract … 3. Summary of Decision A. Summary of the Labor Relations Commission’s Reasoning A. Existence of a legitimate expectation of renewal The employer regularly conducted performance evaluations for fixed-term employees in order to decide whether to renew their employment contracts, and, since the contracts of fixed-term employees had been repeatedly renewed, a relationship of trust had been formed between the parties to the employment contract that the contract would be renewed if certain conditions were met. Therefore, the employee had a legitimate expectation of renewal of the employment contract. B. Existence of a reasonable ground for refusal to renew It appears that there was a reasonable ground for the employer to set the cumulative index for the most recent two years as the evaluation period, and that, during the evaluation period, the employee’s performance was such that the employer could decide not to renew the employment contract … / [See More Related Decisions] - “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision” – Decision date: - Case number: Initial decision upheld - “‘Dismissal (Non-Appearance at Hearing)’ Unfair Dismissal Decision” – Decision date: - Case number: Dismissed - “‘Expression of Intent to Resign (Resignation Remark During Telephone Call)’ Unfair Dismissal Decision” [Tags] Unfair dismissal, refusal to renew (two-year cumulative performance evaluation index), refusal to renew fixed-term contract, performance evaluation · poor performance, 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 one of the “Unfair Dismissal Decision” series by Labor Law Firm Law&. ※ You can view the previous article, “‘Expression of Intent Not in Accordance with True Intention (Voluntary Resignation After Notice of Removal from Team Leader Position)’ Unfair Dismissal Decision,” in a new window. ※ You can view the list of decisions related to refusal to renew (two-year cumulative performance evaluation index) on the “List of Decisions Related to Refusal to Renew (Two-Year Cumulative Performance Evaluation Index)” page. ※ Korean version of this case: Korean article