Corporate trends / Performance record
Unfair Dismissal Precedent Concerning “Expectation of Renewal (Avoidance of Conversion to Open-Ended Contract)” (Unfair Dismissal 592)
- Date2026/08/03 04:18
- Read 10
[Case Information]
This case is a precedent in which the employee prevailed in full on the issue of “expectation of renewal (avoidance of conversion to an open-ended contract).”
Adjudicating body: Jeonbuk Regional Labor Relations Commission 2026Buhae170 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-20 · Outcome: Employee’s claim fully upheld
Summary of key issues:
A. Existence of an expectation of renewal
Given that, under the employer’s rules on contract employees, employees had been able to rely on renewal of their employment contracts so long as their performance appraisal results were not in the lowest grade; that renewals had been made with accompanying wage increases; and that, in light of the permanent and continuous nature of the duties and the practice of long service by predecessors, the employee was recognized as having a legitimate expectation of renewal of the employment contract.
1. Legal Implications
Ⅰ. Case Overview
This case concerns a fixed-term employee whose contract was not renewed on the ground of contract expiration, and who filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal. The Jeonbuk Regional Labor Relations Commission focused its review on the existence of an expectation of renewal and the justification for the refusal to renew, based on the employer’s rules on contract employees, the employer’s practice regarding renewals, and the permanent nature of the duties. Labor Law Firm Law& treats the legal doctrine of expectation of renewal as a core issue in disputes involving unfair dismissal and redundancy dismissals.
Ⅱ. Summary of Issues
The issue in this case is whether, where a contract employee has acquired an expectation of renewal based on performance appraisals and the employer’s renewal practices, the employer’s refusal to renew the contract—on the grounds of avoiding conversion to an open-ended contract or citing managerial reasons—constitutes an unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The adjudicating panel found that the employee had a legitimate expectation of renewal of the employment contract, in light of the following: under the employer’s rules on contract employees, contracts had ordinarily been renewed where the performance appraisal result was not in the lowest grade; renewals had repeatedly been made with accompanying wage increases; and the duties in question were permanent and continuous, with a practice of long service by predecessors.
Taking into comprehensive consideration that no performance appraisal had actually been conducted for the employee; that the managerial reasons asserted by the employer could not, by themselves, justify the refusal to renew; that there was a lack of objective and reasonable evidence to acknowledge the employee’s alleged lack of job competence; and that the substantive reason for the refusal to renew appeared to be avoidance of conversion to an open-ended contract,
the Commission held that the refusal to renew in this case constituted an unfair dismissal, as it lacked socially acceptable and sufficiently reasonable grounds.
Ⅳ. Practical Points (From the Employee’s Perspective)
Even if you are a fixed-term or contract employee, an expectation of renewal may be recognized where there are provisions in the employment contract, internal rules, and performance appraisal standards; repeated renewals and wage increases; and a practice of long service by employees performing the same type of work. If the employer refuses to renew your contract on the grounds of contract expiration, managerial reasons, or lack of competence, it is important to secure evidence regarding whether a performance appraisal was actually conducted, the existence and application of appraisal criteria, and whether there was an intention to avoid conversion to an open-ended contract.
Ⅴ. Practical Points (From the Employer’s Perspective)
When employing contract workers, you should clearly define the criteria for performance appraisal and the conditions and procedures for renewal, and keep records showing that appraisals were actually conducted in accordance with those criteria. If you intend to refuse renewal on the grounds of managerial reasons or organizational restructuring, mere assertions of cost reduction are insufficient; you must be prepared to prove with objective data the necessity of workforce reduction, any review of alternatives such as reassignment or conversion, and the fairness of the criteria and procedures for selecting affected employees.
In particular, large-scale refusals to renew or blanket terminations of specific job categories, where there may be suspicion of an intent to avoid conversion to open-ended contracts, carry a very high risk of being found to constitute unfair dismissal. It is therefore advisable to re-examine your HR and labor relations strategy in advance.
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Existence of an expectation of renewal
Given that, under the employer’s rules on contract employees, employees had been able to rely on renewal of their employment contracts so long as their performance appraisal results were not in the lowest grade; that renewals had been made with accompanying wage increases; and that, in light of the permanent and continuous nature of the duties and the practice of long service by predecessors, the employee was recognized as having a legitimate expectation of renewal of the employment contract.
B. Whether there were reasonable grounds for the refusal to renew
Taking into account that no performance appraisal had been conducted for the employee; that the employer’s asserted managerial reasons could not serve as grounds justifying the refusal to renew; that there was a lack of reasonable grounds to acknowledge the employee’s alleged lack of job competence; and that the substantive reason for the refusal to renew was avoidance of conversion to an open-ended contract...
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Existence of an expectation of renewal
Given that, under the employer’s rules on contract employees, employees had been able to rely on renewal of their employment contracts so long as their performance appraisal results were not in the lowest grade; that renewals had been made with accompanying wage increases; and that, in light of the permanent and continuous nature of the duties and the practice of long service by predecessors, the employee was recognized as having a legitimate expectation of renewal of the employment contract.
B. Whether there were reasonable grounds for the refusal to renew
Taking into account that no performance appraisal had been conducted for the employee; that the employer’s asserted managerial reasons could not serve as grounds justifying the refusal to renew; that there was a lack of reasonable grounds to acknowledge the employee’s alleged lack of job competence; and that the substantive reason for the refusal to renew was avoidance of conversion to an open-ended contract... /
[See More Related Precedents]
- “Unfair Dismissal Precedent Concerning ‘Extinction of Interest in Remedy (Expiration of Fixed-Term Contract)’”
- “Unfair Dismissal Precedent Concerning ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Precedent Concerning ‘Expression of Intent to Resign (Resignation Remark Made by Telephone)’”
[Tags]
Unfair dismissal, expectation of renewal (avoidance of conversion to open-ended contract), refusal to renew contract employees, restructuring, 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 Precedents” series.
※ You can view the previous article, “Unfair Dismissal Precedent Concerning ‘Defects in Disciplinary Procedures (Refusal to Cooperate with Audit · Obstruction of Work)’,” in a new window.
※ A list of precedents related to expectation of renewal (avoidance of conversion to open-ended contract) can be found under “List of Precedents Related to Expectation of Renewal (Avoidance of Conversion to Open-Ended Contract).”
※ Korean version of this case: Korean article
This case is a precedent in which the employee prevailed in full on the issue of “expectation of renewal (avoidance of conversion to an open-ended contract).”
Adjudicating body: Jeonbuk Regional Labor Relations Commission 2026Buhae170 ○ ○ ○ Application for Remedy for Unfair Dismissal
2026-05-20 · Outcome: Employee’s claim fully upheld
Summary of key issues:
A. Existence of an expectation of renewal
Given that, under the employer’s rules on contract employees, employees had been able to rely on renewal of their employment contracts so long as their performance appraisal results were not in the lowest grade; that renewals had been made with accompanying wage increases; and that, in light of the permanent and continuous nature of the duties and the practice of long service by predecessors, the employee was recognized as having a legitimate expectation of renewal of the employment contract.
1. Legal Implications
Ⅰ. Case Overview
This case concerns a fixed-term employee whose contract was not renewed on the ground of contract expiration, and who filed an application with the Labor Relations Commission seeking a remedy for unfair dismissal. The Jeonbuk Regional Labor Relations Commission focused its review on the existence of an expectation of renewal and the justification for the refusal to renew, based on the employer’s rules on contract employees, the employer’s practice regarding renewals, and the permanent nature of the duties. Labor Law Firm Law& treats the legal doctrine of expectation of renewal as a core issue in disputes involving unfair dismissal and redundancy dismissals.
Ⅱ. Summary of Issues
The issue in this case is whether, where a contract employee has acquired an expectation of renewal based on performance appraisals and the employer’s renewal practices, the employer’s refusal to renew the contract—on the grounds of avoiding conversion to an open-ended contract or citing managerial reasons—constitutes an unfair dismissal.
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The adjudicating panel found that the employee had a legitimate expectation of renewal of the employment contract, in light of the following: under the employer’s rules on contract employees, contracts had ordinarily been renewed where the performance appraisal result was not in the lowest grade; renewals had repeatedly been made with accompanying wage increases; and the duties in question were permanent and continuous, with a practice of long service by predecessors.
Taking into comprehensive consideration that no performance appraisal had actually been conducted for the employee; that the managerial reasons asserted by the employer could not, by themselves, justify the refusal to renew; that there was a lack of objective and reasonable evidence to acknowledge the employee’s alleged lack of job competence; and that the substantive reason for the refusal to renew appeared to be avoidance of conversion to an open-ended contract,
the Commission held that the refusal to renew in this case constituted an unfair dismissal, as it lacked socially acceptable and sufficiently reasonable grounds.
Ⅳ. Practical Points (From the Employee’s Perspective)
Even if you are a fixed-term or contract employee, an expectation of renewal may be recognized where there are provisions in the employment contract, internal rules, and performance appraisal standards; repeated renewals and wage increases; and a practice of long service by employees performing the same type of work. If the employer refuses to renew your contract on the grounds of contract expiration, managerial reasons, or lack of competence, it is important to secure evidence regarding whether a performance appraisal was actually conducted, the existence and application of appraisal criteria, and whether there was an intention to avoid conversion to an open-ended contract.
Ⅴ. Practical Points (From the Employer’s Perspective)
When employing contract workers, you should clearly define the criteria for performance appraisal and the conditions and procedures for renewal, and keep records showing that appraisals were actually conducted in accordance with those criteria. If you intend to refuse renewal on the grounds of managerial reasons or organizational restructuring, mere assertions of cost reduction are insufficient; you must be prepared to prove with objective data the necessity of workforce reduction, any review of alternatives such as reassignment or conversion, and the fairness of the criteria and procedures for selecting affected employees.
In particular, large-scale refusals to renew or blanket terminations of specific job categories, where there may be suspicion of an intent to avoid conversion to open-ended contracts, carry a very high risk of being found to constitute unfair dismissal. It is therefore advisable to re-examine your HR and labor relations strategy in advance.
2. Matters Adjudicated
A. Case Overview and Procedural History
A. Existence of an expectation of renewal
Given that, under the employer’s rules on contract employees, employees had been able to rely on renewal of their employment contracts so long as their performance appraisal results were not in the lowest grade; that renewals had been made with accompanying wage increases; and that, in light of the permanent and continuous nature of the duties and the practice of long service by predecessors, the employee was recognized as having a legitimate expectation of renewal of the employment contract.
B. Whether there were reasonable grounds for the refusal to renew
Taking into account that no performance appraisal had been conducted for the employee; that the employer’s asserted managerial reasons could not serve as grounds justifying the refusal to renew; that there was a lack of reasonable grounds to acknowledge the employee’s alleged lack of job competence; and that the substantive reason for the refusal to renew was avoidance of conversion to an open-ended contract...
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
A. Existence of an expectation of renewal
Given that, under the employer’s rules on contract employees, employees had been able to rely on renewal of their employment contracts so long as their performance appraisal results were not in the lowest grade; that renewals had been made with accompanying wage increases; and that, in light of the permanent and continuous nature of the duties and the practice of long service by predecessors, the employee was recognized as having a legitimate expectation of renewal of the employment contract.
B. Whether there were reasonable grounds for the refusal to renew
Taking into account that no performance appraisal had been conducted for the employee; that the employer’s asserted managerial reasons could not serve as grounds justifying the refusal to renew; that there was a lack of reasonable grounds to acknowledge the employee’s alleged lack of job competence; and that the substantive reason for the refusal to renew was avoidance of conversion to an open-ended contract... /
[See More Related Precedents]
- “Unfair Dismissal Precedent Concerning ‘Extinction of Interest in Remedy (Expiration of Fixed-Term Contract)’”
- “Unfair Dismissal Precedent Concerning ‘Failure to Meet Requirements for Redundancy Dismissal (Workout Company)’”
- “Unfair Dismissal Precedent Concerning ‘Expression of Intent to Resign (Resignation Remark Made by Telephone)’”
[Tags]
Unfair dismissal, expectation of renewal (avoidance of conversion to open-ended contract), refusal to renew contract employees, restructuring, 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 Precedents” series.
※ You can view the previous article, “Unfair Dismissal Precedent Concerning ‘Defects in Disciplinary Procedures (Refusal to Cooperate with Audit · Obstruction of Work)’,” in a new window.
※ A list of precedents related to expectation of renewal (avoidance of conversion to open-ended contract) can be found under “List of Precedents Related to Expectation of Renewal (Avoidance of Conversion to Open-Ended Contract).”
※ Korean version of this case: Korean article
