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Non-Existence of Legitimate Expectation of Renewal (Expiry of Employment Contract Term) in Unfair Dismissal Decisions (Unfair Dismissal 576)
- Date2026/07/27 04:05
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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 (expiry of employment contract term).”
Decision-making body: Gyeongnam Regional Labor Relations Commission
Case No. 2026부해334 – ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-05-22 · Result: Dismissed
Key issue summary: As there were no provisions imposing an obligation to renew, or setting out the requirements and procedures for renewal, and as no relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer, it was difficult to recognize a legitimate expectation of renewal. Accordingly, the employment relationship between the parties was deemed to have terminated upon expiry of the contract term.
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee filed an application for remedy for unfair dismissal, asserting that she should have been able to continue working even after the expiry of the contract term. The Gyeongnam Regional Labor Relations Commission dismissed the application. The Commission examined the rules and practices regarding renewal of the employment contract and whether a relationship of trust had been formed, and on that basis determined whether a legitimate expectation of renewal existed. Ultimately, it held that the employment relationship between the parties had ended upon expiry of the contract term.
Ⅱ. Summary of Issues
The issue in this case is whether, in the absence of any provisions establishing an obligation or procedure to renew the employment contract, a legitimate expectation of renewal can nonetheless be recognized for the employee based on repeated renewals or other circumstances.
Ⅲ. Key Points of the Labor Relations Commission’s Decision
The panel in this case noted that: there were no provisions establishing an obligation to renew or specifying the requirements and procedures for renewal; in light of the content of the employment contract and the circumstances of its conclusion, as well as the actual standards and procedures for renewal, it was difficult to find any “mandatory rule” or practice to the effect that the contract would automatically be renewed upon satisfaction of certain conditions; and it was difficult to view that a relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer.
Accordingly, it was difficult to recognize a legitimate expectation of renewal of the employment contract, and the Commission therefore determined that the employment relationship in this case naturally terminated upon expiry of the contract term.
Applying the legal principles on legitimate expectation of renewal established by Supreme Court precedents, the Commission focused on: (1) whether there were provisions in the employment contract, rules of employment, collective agreement, etc. that stipulated an obligation or procedure to renew; and (2) if there were no such express provisions, whether a relationship of trust had been formed—through repeated renewals, the continuous and permanent nature of the work, and the actual operation of re-contracting—such that the employee could reasonably expect that “the contract will be renewed upon satisfaction of certain conditions.” In this case, the Commission found that such provisions or relationship of trust were lacking, and therefore held that mere expiry of the contract term could not be regarded as an unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
For a fixed-term employee to obtain a remedy for unfair dismissal, it is not sufficient merely to argue that “I have been continuously working.” The employee must prove that: the criteria and procedures for re-contracting are specifically set out in the employment contract, rules of employment, or HR guidelines; or that, through repeated renewals and re-employment practices, a relationship of trust has been formed to the effect that “the contract will be renewed if certain conditions are met.” Since refusal to renew can affect an employee’s livelihood as seriously as a redundancy dismissal, employees should carefully check, from the time of contract conclusion, the provisions on renewal, evaluation criteria, and re-contracting practices. Where necessary, they should seek assistance from experts such as Labor Law Firm Law& to assess whether they have a legitimate expectation of renewal.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
When utilizing fixed-term employment contracts, companies need to clearly design, as part of their HR and management strategy, whether to adopt provisions explicitly stipulating an obligation to renew or procedures for re-contracting, or instead to maintain broad managerial discretion. In particular, while operating concrete standards for re-contracting scores, evaluation procedures, and re-contracting practices, companies must take care not to allow wording or practices to accumulate that could be misunderstood as implying that contracts are “always renewed.” When refusing renewal, employers should systematically manage relevant materials so that they can demonstrate that the reasons and procedures for refusal are objective, reasonable, and fair.
As in this case, where a legitimate expectation of renewal is not recognized, the employment relationship terminates upon expiry of the contract term and no issue of unfair dismissal arises. Conversely, if a structure is formed in which a legitimate expectation of renewal is recognized, refusal to renew will be subject to the same legal scrutiny as unfair dismissal. Accordingly, it is important to consult with experts such as Labor Law Firm Law& from the stage of designing the operation of fixed-term employment and renewal practices, in order to manage risks in advance.
2. Matters Decided
A. Case Overview and Procedural History
As there were no provisions establishing an obligation to renew, or specifying the requirements and procedures for renewal, and as no relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer, it was difficult to recognize a legitimate expectation of renewal of the employment contract. Accordingly, the employment relationship between the parties was deemed to have terminated upon expiry of the contract term.
3. Gist of the Decision
A. Key Points of the Labor Relations Commission’s Decision
As there were no provisions establishing an obligation to renew, or specifying the requirements and procedures for renewal, and as no relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer, it was difficult to recognize a legitimate expectation of renewal of the employment contract. Accordingly, the employment relationship between the parties was deemed to have terminated upon expiry of the contract term. /
[Further Related Decisions]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ in Unfair Dismissal Decisions” – Decision result: First-instance decision upheld
- “‘Expression of Intention to Resign (Resignation Remark Made by Telephone)’ in Unfair Dismissal Decisions”
- “‘Dismissal (Non-Appearance at Hearing)’ in Unfair Dismissal Decisions” – Decision result: Dismissed
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (expiry of employment contract term), 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, “‘Punitive Nature (Change of Job Assignment After Suspension from Duty and Waiting for Assignment)’ in Unfair Dismissal Decisions,” in a new window.
※ A list of decisions related to non-existence of legitimate expectation of renewal (expiry of employment contract term) can be found in the “List of Decisions on Non-Existence of Legitimate Expectation of Renewal (Expiry of Employment Contract Term).”
※ Korean version of this case: Korean article
Decision-making body: Gyeongnam Regional Labor Relations Commission
Case No. 2026부해334 – ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-05-22 · Result: Dismissed
Key issue summary: As there were no provisions imposing an obligation to renew, or setting out the requirements and procedures for renewal, and as no relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer, it was difficult to recognize a legitimate expectation of renewal. Accordingly, the employment relationship between the parties was deemed to have terminated upon expiry of the contract term.
1. Legal Implications
Ⅰ. Case Overview
In this case, a fixed-term employee filed an application for remedy for unfair dismissal, asserting that she should have been able to continue working even after the expiry of the contract term. The Gyeongnam Regional Labor Relations Commission dismissed the application. The Commission examined the rules and practices regarding renewal of the employment contract and whether a relationship of trust had been formed, and on that basis determined whether a legitimate expectation of renewal existed. Ultimately, it held that the employment relationship between the parties had ended upon expiry of the contract term.
Ⅱ. Summary of Issues
The issue in this case is whether, in the absence of any provisions establishing an obligation or procedure to renew the employment contract, a legitimate expectation of renewal can nonetheless be recognized for the employee based on repeated renewals or other circumstances.
Ⅲ. Key Points of the Labor Relations Commission’s Decision
The panel in this case noted that: there were no provisions establishing an obligation to renew or specifying the requirements and procedures for renewal; in light of the content of the employment contract and the circumstances of its conclusion, as well as the actual standards and procedures for renewal, it was difficult to find any “mandatory rule” or practice to the effect that the contract would automatically be renewed upon satisfaction of certain conditions; and it was difficult to view that a relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer.
Accordingly, it was difficult to recognize a legitimate expectation of renewal of the employment contract, and the Commission therefore determined that the employment relationship in this case naturally terminated upon expiry of the contract term.
Applying the legal principles on legitimate expectation of renewal established by Supreme Court precedents, the Commission focused on: (1) whether there were provisions in the employment contract, rules of employment, collective agreement, etc. that stipulated an obligation or procedure to renew; and (2) if there were no such express provisions, whether a relationship of trust had been formed—through repeated renewals, the continuous and permanent nature of the work, and the actual operation of re-contracting—such that the employee could reasonably expect that “the contract will be renewed upon satisfaction of certain conditions.” In this case, the Commission found that such provisions or relationship of trust were lacking, and therefore held that mere expiry of the contract term could not be regarded as an unfair dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
For a fixed-term employee to obtain a remedy for unfair dismissal, it is not sufficient merely to argue that “I have been continuously working.” The employee must prove that: the criteria and procedures for re-contracting are specifically set out in the employment contract, rules of employment, or HR guidelines; or that, through repeated renewals and re-employment practices, a relationship of trust has been formed to the effect that “the contract will be renewed if certain conditions are met.” Since refusal to renew can affect an employee’s livelihood as seriously as a redundancy dismissal, employees should carefully check, from the time of contract conclusion, the provisions on renewal, evaluation criteria, and re-contracting practices. Where necessary, they should seek assistance from experts such as Labor Law Firm Law& to assess whether they have a legitimate expectation of renewal.
Ⅴ. Practical Points (From the Employer/Company’s Perspective)
When utilizing fixed-term employment contracts, companies need to clearly design, as part of their HR and management strategy, whether to adopt provisions explicitly stipulating an obligation to renew or procedures for re-contracting, or instead to maintain broad managerial discretion. In particular, while operating concrete standards for re-contracting scores, evaluation procedures, and re-contracting practices, companies must take care not to allow wording or practices to accumulate that could be misunderstood as implying that contracts are “always renewed.” When refusing renewal, employers should systematically manage relevant materials so that they can demonstrate that the reasons and procedures for refusal are objective, reasonable, and fair.
As in this case, where a legitimate expectation of renewal is not recognized, the employment relationship terminates upon expiry of the contract term and no issue of unfair dismissal arises. Conversely, if a structure is formed in which a legitimate expectation of renewal is recognized, refusal to renew will be subject to the same legal scrutiny as unfair dismissal. Accordingly, it is important to consult with experts such as Labor Law Firm Law& from the stage of designing the operation of fixed-term employment and renewal practices, in order to manage risks in advance.
2. Matters Decided
A. Case Overview and Procedural History
As there were no provisions establishing an obligation to renew, or specifying the requirements and procedures for renewal, and as no relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer, it was difficult to recognize a legitimate expectation of renewal of the employment contract. Accordingly, the employment relationship between the parties was deemed to have terminated upon expiry of the contract term.
3. Gist of the Decision
A. Key Points of the Labor Relations Commission’s Decision
As there were no provisions establishing an obligation to renew, or specifying the requirements and procedures for renewal, and as no relationship of trust regarding renewal of the employment contract had been formed between the employee and the employer, it was difficult to recognize a legitimate expectation of renewal of the employment contract. Accordingly, the employment relationship between the parties was deemed to have terminated upon expiry of the contract term. /
[Further Related Decisions]
- “‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ in Unfair Dismissal Decisions” – Decision result: First-instance decision upheld
- “‘Expression of Intention to Resign (Resignation Remark Made by Telephone)’ in Unfair Dismissal Decisions”
- “‘Dismissal (Non-Appearance at Hearing)’ in Unfair Dismissal Decisions” – Decision result: Dismissed
[Tags]
Unfair dismissal, non-existence of legitimate expectation of renewal (expiry of employment contract term), 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, “‘Punitive Nature (Change of Job Assignment After Suspension from Duty and Waiting for Assignment)’ in Unfair Dismissal Decisions,” in a new window.
※ A list of decisions related to non-existence of legitimate expectation of renewal (expiry of employment contract term) can be found in the “List of Decisions on Non-Existence of Legitimate Expectation of Renewal (Expiry of Employment Contract Term).”
※ Korean version of this case: Korean article
