Corporate trends / Performance record
‘Non-Existence of Expectation of Renewal (Initial Short-Term Contract)’ Unfair Dismissal Decision (Unfair Dismissal 628)
- Date2026/08/16 04:10
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This case concerns a decision in which the employer prevailed (application dismissed) on the issue of “non-existence of expectation of renewal (initial short-term contract).”
Adjudicating body: Seoul Regional Labor Relations Commission
Case No. 2026BuHae1526 – ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-07-07 · Result: Dismissed
Key issues summarized: (i) there were no provisions in the rules of employment regarding renewal of employment contracts; (ii) the parties concluded an employment contract for the period from 23 September 2025 to 31 December 2025, and there had not been a single renewal of the contract after the initial employment contract was entered into; (iii) the employment contract stated that “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term.”
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, arguing that the failure to re-contract after the expiration of the employment contract constituted an unfair dismissal. The Seoul Regional Labor Relations Commission reviewed, in a comprehensive manner, the rules of employment, the contents of the employment contract, and workplace practices to determine whether an expectation of renewal should be recognized, and ultimately dismissed the employee’s application. Focusing on this unfair dismissal decision by the Labor Relations Commission, this article organizes the legal principles governing disputes over renewal of fixed-term employment contracts, which Labor Law Firm Law& frequently encounters in practice.
Ⅱ. Issues
The issue in this case is whether, “in the absence of provisions in the rules of employment or any explicit stipulation, a worker can be recognized as having a legitimate ‘expectation of renewal’ of a fixed-term employment contract that was concluded only once for a short term and has expired, such that refusal to renew can be regarded as an unfair dismissal.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that there were no provisions whatsoever in the rules of employment regarding renewal of employment contracts; that the employment contract had been concluded only once for a short period from 23 September 2025 to 31 December 2025, and that there had been no instances of renewal before or after that contract; that although the employment contract contained the wording “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term,” this merely indicated that the employer could extend the contract if necessary and could not be viewed as a clause imposing an obligation to renew; that there were no objective criteria in place at the workplace, such as evaluation standards or procedures, for contract renewal; and that there were no circumstances indicating that renewals had been repeatedly made or that a practice or relationship of trust regarding renewal had been established among employees in similar positions.
In light of the above, the Commission held that the employment relationship in this case corresponded to a fixed-term employment contract that naturally terminated upon expiration of its term, and that the employer’s refusal to re-contract did not constitute a dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
Even for fixed-term employees, if certain requirements are met and an expectation of renewal is recognized, refusal to renew may be evaluated as an unfair dismissal. However, as in this case, where there is only a single initial short-term contract and there are no provisions, evaluation criteria, or practices regarding renewal, recognition of an expectation of renewal becomes very difficult. It should also be borne in mind that expressions in employment contracts such as “may be extended by mutual agreement” or “may be extended if necessary” in principle indicate the employer’s discretion only, and do not constitute clauses guaranteeing automatic renewal or imposing an obligation to renew.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s standpoint, when utilizing fixed-term employment contracts, it is important to clearly specify in the contract the contract period and the point of termination, and to make it explicit that renewal is at the company’s discretion, while also managing actual operations so that unnecessary repeated renewals do not give rise to an expectation of renewal. In addition, where criteria and procedures for contract renewal are set out in the rules of employment or internal guidelines, those contents may themselves become the basis for an expectation of renewal. Accordingly, such systems should be designed and operated so that they are aligned with legitimate evaluations, objective criteria, and business needs.
To prevail in cases of this type, it is essential to have an accurate understanding of the Act on the Protection, Etc. of Fixed-Term and Part-Time Employees and Supreme Court precedents on expectation of renewal, and, as a preliminary step, to systematically organize the facts in the rules of employment, employment contracts, and actual renewal practices that may support or negate the recognition of an expectation of renewal.
2. Matters Adjudicated
A. Case Overview and Procedural History
(i) There were no provisions in the rules of employment regarding renewal of employment contracts; (ii) an employment contract was concluded for the period from 23 September 2025 to 31 December 2025, and there had not been a single renewal of the contract after the initial employment contract was entered into; (iii) although the employment contract stated that “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term,” this could not be viewed as a clause imposing an obligation to renew; (iv) no evaluation criteria related to renewal of employment contracts had been established at the workplace; and (v) there was no basis to find that there was a practice regarding contract renewal or that a relationship of trust concerning renewal had been formed...
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(i) There were no provisions in the rules of employment regarding renewal of employment contracts; (ii) an employment contract was concluded for the period from 23 September 2025 to 31 December 2025, and there had not been a single renewal of the contract after the initial employment contract was entered into; (iii) although the employment contract stated that “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term,” this could not be viewed as a clause imposing an obligation to renew; (iv) no evaluation criteria related to renewal of employment contracts had been established at the workplace; and (v) there was no basis to find that there was a practice regarding contract renewal or that a relationship of trust concerning renewal had been formed... /
[See More Related Decisions]
- ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision – Decision result: First-instance decision upheld
- ‘Failure to Satisfy Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Decision
- ‘Expression of Intent to Resign (Resignation Remarks Made by Telephone)’ Unfair Dismissal Decision
[Tags]
Unfair dismissal, non-existence of expectation of renewal (initial short-term contract), 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 (Workplace Bullying and Illegal Conduct)’ Unfair Dismissal Decision, in a new window.
※ A list of decisions related to non-existence of expectation of renewal (initial short-term contract) can be found under “List of Decisions Related to Non-Existence of Expectation of Renewal (Initial Short-Term Contract).”
※ Korean version of this case: Korean article
Adjudicating body: Seoul Regional Labor Relations Commission
Case No. 2026BuHae1526 – ○ ○ ○ Application for Remedy for Unfair Dismissal
Decision date: 2026-07-07 · Result: Dismissed
Key issues summarized: (i) there were no provisions in the rules of employment regarding renewal of employment contracts; (ii) the parties concluded an employment contract for the period from 23 September 2025 to 31 December 2025, and there had not been a single renewal of the contract after the initial employment contract was entered into; (iii) the employment contract stated that “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term.”
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, arguing that the failure to re-contract after the expiration of the employment contract constituted an unfair dismissal. The Seoul Regional Labor Relations Commission reviewed, in a comprehensive manner, the rules of employment, the contents of the employment contract, and workplace practices to determine whether an expectation of renewal should be recognized, and ultimately dismissed the employee’s application. Focusing on this unfair dismissal decision by the Labor Relations Commission, this article organizes the legal principles governing disputes over renewal of fixed-term employment contracts, which Labor Law Firm Law& frequently encounters in practice.
Ⅱ. Issues
The issue in this case is whether, “in the absence of provisions in the rules of employment or any explicit stipulation, a worker can be recognized as having a legitimate ‘expectation of renewal’ of a fixed-term employment contract that was concluded only once for a short term and has expired, such that refusal to renew can be regarded as an unfair dismissal.”
Ⅲ. Summary of the Labor Relations Commission’s Reasoning
The panel in this case noted that there were no provisions whatsoever in the rules of employment regarding renewal of employment contracts; that the employment contract had been concluded only once for a short period from 23 September 2025 to 31 December 2025, and that there had been no instances of renewal before or after that contract; that although the employment contract contained the wording “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term,” this merely indicated that the employer could extend the contract if necessary and could not be viewed as a clause imposing an obligation to renew; that there were no objective criteria in place at the workplace, such as evaluation standards or procedures, for contract renewal; and that there were no circumstances indicating that renewals had been repeatedly made or that a practice or relationship of trust regarding renewal had been established among employees in similar positions.
In light of the above, the Commission held that the employment relationship in this case corresponded to a fixed-term employment contract that naturally terminated upon expiration of its term, and that the employer’s refusal to re-contract did not constitute a dismissal.
Ⅳ. Practical Points (From the Employee’s Perspective)
Even for fixed-term employees, if certain requirements are met and an expectation of renewal is recognized, refusal to renew may be evaluated as an unfair dismissal. However, as in this case, where there is only a single initial short-term contract and there are no provisions, evaluation criteria, or practices regarding renewal, recognition of an expectation of renewal becomes very difficult. It should also be borne in mind that expressions in employment contracts such as “may be extended by mutual agreement” or “may be extended if necessary” in principle indicate the employer’s discretion only, and do not constitute clauses guaranteeing automatic renewal or imposing an obligation to renew.
Ⅴ. Practical Points (From the Employer’s/Company’s Perspective)
From the employer’s standpoint, when utilizing fixed-term employment contracts, it is important to clearly specify in the contract the contract period and the point of termination, and to make it explicit that renewal is at the company’s discretion, while also managing actual operations so that unnecessary repeated renewals do not give rise to an expectation of renewal. In addition, where criteria and procedures for contract renewal are set out in the rules of employment or internal guidelines, those contents may themselves become the basis for an expectation of renewal. Accordingly, such systems should be designed and operated so that they are aligned with legitimate evaluations, objective criteria, and business needs.
To prevail in cases of this type, it is essential to have an accurate understanding of the Act on the Protection, Etc. of Fixed-Term and Part-Time Employees and Supreme Court precedents on expectation of renewal, and, as a preliminary step, to systematically organize the facts in the rules of employment, employment contracts, and actual renewal practices that may support or negate the recognition of an expectation of renewal.
2. Matters Adjudicated
A. Case Overview and Procedural History
(i) There were no provisions in the rules of employment regarding renewal of employment contracts; (ii) an employment contract was concluded for the period from 23 September 2025 to 31 December 2025, and there had not been a single renewal of the contract after the initial employment contract was entered into; (iii) although the employment contract stated that “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term,” this could not be viewed as a clause imposing an obligation to renew; (iv) no evaluation criteria related to renewal of employment contracts had been established at the workplace; and (v) there was no basis to find that there was a practice regarding contract renewal or that a relationship of trust concerning renewal had been formed...
3. Summary of the Decision
A. Summary of the Labor Relations Commission’s Reasoning
(i) There were no provisions in the rules of employment regarding renewal of employment contracts; (ii) an employment contract was concluded for the period from 23 September 2025 to 31 December 2025, and there had not been a single renewal of the contract after the initial employment contract was entered into; (iii) although the employment contract stated that “after the expiration of the contract period, Party A and Party B may, by mutual agreement, extend the term,” this could not be viewed as a clause imposing an obligation to renew; (iv) no evaluation criteria related to renewal of employment contracts had been established at the workplace; and (v) there was no basis to find that there was a practice regarding contract renewal or that a relationship of trust concerning renewal had been formed... /
[See More Related Decisions]
- ‘Non-Formation of Hiring Commitment (Absence of Offer Letter)’ Unfair Dismissal Decision – Decision result: First-instance decision upheld
- ‘Failure to Satisfy Requirements for Redundancy Dismissal (Workout Company)’ Unfair Dismissal Decision
- ‘Expression of Intent to Resign (Resignation Remarks Made by Telephone)’ Unfair Dismissal Decision
[Tags]
Unfair dismissal, non-existence of expectation of renewal (initial short-term contract), 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 (Workplace Bullying and Illegal Conduct)’ Unfair Dismissal Decision, in a new window.
※ A list of decisions related to non-existence of expectation of renewal (initial short-term contract) can be found under “List of Decisions Related to Non-Existence of Expectation of Renewal (Initial Short-Term Contract).”
※ Korean version of this case: Korean article
