Corporate trends / Performance record
Non-Existence of Legitimate Expectation of Renewal (Express Contract Clause) in Unfair Dismissal Decisions (Unfair Dismissal 514)
- Date2026/07/02 04:16
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This case concerns an unfair dismissal decision in which the employer prevailed (application dismissed) on the issue of “non-existence of a legitimate expectation of renewal (express contract clause).”
Decision body: Seoul Regional Labor Relations Commission
Case No. 2025부해3350 – ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-06-09 · Result: Application dismissed
Key issues in summary: (i) the employer’s rules of employment and employment contract did not contain any provisions supporting the existence of a legitimate expectation of renewal of the employment contract; (ii) on the contrary, the employment contract contained a clause denying such expectation, namely, “This contract shall not be extended or renewed without the express agreement of the parties.”
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee filed an application with the Labor Relations Commission for a remedy for unfair dismissal after no renewal was made upon expiry of the contract term. The Seoul Regional Labor Relations Commission focused its determination on whether a legitimate expectation of renewal could be recognized, taking into comprehensive account the contents of the employment contract and rules of employment, as well as the actual course of renewals.
Ultimately, the key issue was whether the employer’s refusal to renew the contract constituted an unfair dismissal. This is a type of decision that Labor Law Firm Law& frequently refers to when advising on similar cases.
Ⅱ. Issues in Dispute
The issue in this case is:
“Where the employment contract contains a clause stating that it will not be extended or renewed without ‘express agreement,’ can two prior renewals of the contract and a practice of long service among colleagues alone give rise to a legitimate expectation of renewal on the part of the employee?”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that there were no provisions in the employer’s rules of employment or employment contract supporting the existence of a legitimate expectation of renewal or setting out criteria for re-contracting; that, on the contrary, the employment contract expressly denied any such expectation through a clause stating that the contract “shall not be extended or renewed without the express agreement of the parties”; that there was no evidence that the employer had promised future renewals; and that, although the employment contract had been renewed twice, the total period of employment was only one year and it was difficult to recognize a legal obligation to renew solely on the basis that some colleagues had long service.
Accordingly, the Commission held that the termination in this case should be regarded as the end of the employment relationship due to expiry of the fixed term, that no legitimate expectation of renewal could be recognized for the employee, and that the case therefore did not constitute unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, you should first check whether the contract contains provisions on “automatic renewal” or “renewal upon satisfaction of certain conditions,” or whether the rules of employment or HR guidelines set out specific criteria and procedures for re-contracting. It is difficult to have a legitimate expectation of renewal recognized merely because the contract has been renewed a few times or because colleagues have been employed for a long period.
In particular, where there is a clause stating that the contract “will not be renewed without express agreement,” as in this case, you should be aware that any claim of a legitimate expectation of renewal may be significantly disadvantaged.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, it is important to clearly state the contract term and end date in the fixed-term employment contract and to decide explicitly whether to deny any legitimate expectation of renewal through a clause such as “this contract will not be renewed without express agreement.”
However, if you operate separate criteria for re-contracting, specifying detailed scoring standards, evaluation items, and procedures may actually lead to recognition of a legitimate expectation of renewal. Therefore, if flexible workforce management is necessary given the nature of the business, you should consistently reflect in both documentation and actual practice that re-contracting is a matter of “discretion,” not an “obligation.”
To prevail in this type of case, it is important in practice to familiarize yourself in advance with the Act on the Protection of Fixed-Term and Part-Time Employees and Supreme Court precedents on legitimate expectation of renewal, and to ensure beforehand that the wording and actual operation of rules of employment, employment contracts, and HR guidelines conform to those legal principles.
2. Matters Determined
A. Case Overview and Procedural History
(1) The employer’s rules of employment and employment contract did not contain any provisions supporting the existence of a legitimate expectation of renewal of the employment contract; (2) on the contrary, the employment contract expressly included a clause denying such expectation, namely, “This contract shall not be extended or renewed without the express agreement of the parties”; (3) no evidence was presented that would support a finding that the employer had promised renewal of the contract; (4) although the employee’s employment contract had been renewed twice, the total period was only one year, and it is difficult to impose a series of legal obligations to renew solely on the basis that a colleague had long service…
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(1) The employer’s rules of employment and employment contract did not contain any provisions supporting the existence of a legitimate expectation of renewal of the employment contract; (2) on the contrary, the employment contract expressly included a clause denying such expectation, namely, “This contract shall not be extended or renewed without the express agreement of the parties”; (3) no evidence was presented that would support a finding that the employer had promised renewal of the contract; (4) although the employee’s employment contract had been renewed twice, the total period was only one year, and it is difficult to impose a series of legal obligations to renew solely on the basis that a colleague had long service… /
[See More Related Decisions]
- “Expression of Intent to Resign (Resignation Remark in Phone Call)” in Unfair Dismissal Decisions
- “No Formation of Hiring Commitment (Absence of Offer Letter)” in Unfair Dismissal Decisions – Decision date: – Case result: First-instance decision upheld
- “Voluntary Resignation (No Withdrawal of Resignation Letter)” in Unfair Dismissal Decisions
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (express contract clause), 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 Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ You can view the previous article, “‘Disciplinary Sanction Level (Insulting a Complainant While on Sick Leave)’ in Unfair Dismissal Decisions,” in a new window.
※ You can also view the list of decisions related to non-existence of legitimate expectation of renewal (express contract clause) under “List of Decisions on Non-Existence of Legitimate Expectation of Renewal (Express Contract Clause).”
※ Korean version of this case: Korean article
Decision body: Seoul Regional Labor Relations Commission
Case No. 2025부해3350 – ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-06-09 · Result: Application dismissed
Key issues in summary: (i) the employer’s rules of employment and employment contract did not contain any provisions supporting the existence of a legitimate expectation of renewal of the employment contract; (ii) on the contrary, the employment contract contained a clause denying such expectation, namely, “This contract shall not be extended or renewed without the express agreement of the parties.”
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee filed an application with the Labor Relations Commission for a remedy for unfair dismissal after no renewal was made upon expiry of the contract term. The Seoul Regional Labor Relations Commission focused its determination on whether a legitimate expectation of renewal could be recognized, taking into comprehensive account the contents of the employment contract and rules of employment, as well as the actual course of renewals.
Ultimately, the key issue was whether the employer’s refusal to renew the contract constituted an unfair dismissal. This is a type of decision that Labor Law Firm Law& frequently refers to when advising on similar cases.
Ⅱ. Issues in Dispute
The issue in this case is:
“Where the employment contract contains a clause stating that it will not be extended or renewed without ‘express agreement,’ can two prior renewals of the contract and a practice of long service among colleagues alone give rise to a legitimate expectation of renewal on the part of the employee?”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case found that there were no provisions in the employer’s rules of employment or employment contract supporting the existence of a legitimate expectation of renewal or setting out criteria for re-contracting; that, on the contrary, the employment contract expressly denied any such expectation through a clause stating that the contract “shall not be extended or renewed without the express agreement of the parties”; that there was no evidence that the employer had promised future renewals; and that, although the employment contract had been renewed twice, the total period of employment was only one year and it was difficult to recognize a legal obligation to renew solely on the basis that some colleagues had long service.
Accordingly, the Commission held that the termination in this case should be regarded as the end of the employment relationship due to expiry of the fixed term, that no legitimate expectation of renewal could be recognized for the employee, and that the case therefore did not constitute unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
From the employee’s perspective, you should first check whether the contract contains provisions on “automatic renewal” or “renewal upon satisfaction of certain conditions,” or whether the rules of employment or HR guidelines set out specific criteria and procedures for re-contracting. It is difficult to have a legitimate expectation of renewal recognized merely because the contract has been renewed a few times or because colleagues have been employed for a long period.
In particular, where there is a clause stating that the contract “will not be renewed without express agreement,” as in this case, you should be aware that any claim of a legitimate expectation of renewal may be significantly disadvantaged.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
From the employer’s perspective, it is important to clearly state the contract term and end date in the fixed-term employment contract and to decide explicitly whether to deny any legitimate expectation of renewal through a clause such as “this contract will not be renewed without express agreement.”
However, if you operate separate criteria for re-contracting, specifying detailed scoring standards, evaluation items, and procedures may actually lead to recognition of a legitimate expectation of renewal. Therefore, if flexible workforce management is necessary given the nature of the business, you should consistently reflect in both documentation and actual practice that re-contracting is a matter of “discretion,” not an “obligation.”
To prevail in this type of case, it is important in practice to familiarize yourself in advance with the Act on the Protection of Fixed-Term and Part-Time Employees and Supreme Court precedents on legitimate expectation of renewal, and to ensure beforehand that the wording and actual operation of rules of employment, employment contracts, and HR guidelines conform to those legal principles.
2. Matters Determined
A. Case Overview and Procedural History
(1) The employer’s rules of employment and employment contract did not contain any provisions supporting the existence of a legitimate expectation of renewal of the employment contract; (2) on the contrary, the employment contract expressly included a clause denying such expectation, namely, “This contract shall not be extended or renewed without the express agreement of the parties”; (3) no evidence was presented that would support a finding that the employer had promised renewal of the contract; (4) although the employee’s employment contract had been renewed twice, the total period was only one year, and it is difficult to impose a series of legal obligations to renew solely on the basis that a colleague had long service…
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(1) The employer’s rules of employment and employment contract did not contain any provisions supporting the existence of a legitimate expectation of renewal of the employment contract; (2) on the contrary, the employment contract expressly included a clause denying such expectation, namely, “This contract shall not be extended or renewed without the express agreement of the parties”; (3) no evidence was presented that would support a finding that the employer had promised renewal of the contract; (4) although the employee’s employment contract had been renewed twice, the total period was only one year, and it is difficult to impose a series of legal obligations to renew solely on the basis that a colleague had long service… /
[See More Related Decisions]
- “Expression of Intent to Resign (Resignation Remark in Phone Call)” in Unfair Dismissal Decisions
- “No Formation of Hiring Commitment (Absence of Offer Letter)” in Unfair Dismissal Decisions – Decision date: – Case result: First-instance decision upheld
- “Voluntary Resignation (No Withdrawal of Resignation Letter)” in Unfair Dismissal Decisions
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (express contract clause), 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 Labor Law Firm Law&’s “Unfair Dismissal Decisions” series.
※ You can view the previous article, “‘Disciplinary Sanction Level (Insulting a Complainant While on Sick Leave)’ in Unfair Dismissal Decisions,” in a new window.
※ You can also view the list of decisions related to non-existence of legitimate expectation of renewal (express contract clause) under “List of Decisions on Non-Existence of Legitimate Expectation of Renewal (Express Contract Clause).”
※ Korean version of this case: Korean article
