A Korean court ruled that even if a worker is 55 years of age or older and hired as a temporary worker, the right to contract renewal is “continuously recognized unless there are special circumstances.”
The Seoul Administrative Court ruled in favor of an employee on October 31, 2025, in a lawsuit filed by the Employee against the Central Labor Relations Commission of Korea, holding that non-renewal of the contract period constituted an unfair dismissal under the Korean Labor Standards Act.
Facts
1. Employee worked as a conductor under two two-year fixed-term employment contracts with the Employer. Employer retired the Employee in 2020, stating that the Employee reached the mandatory retirement of 60, noted in the Employer’s employment rules. Thus, the Employee was unable to continue his employment with the Employer beyond the age of 60.
2. The Employee filed a complaint with the Korean Labor Relations Commission, claiming unfair dismissal, and filed an appeal to the Seoul Administrative Court.
3. The Seoul Administrative Court ruled that Employee was over 55 years old when he signed his employment contract with the Employer, therefore, despite having worked for more than two years under the Fixed-Term Employment Act of Korea, he was not converted to a regular employee. The Employer’s retirement age regulations only applied to regular employees. Thus, the fixed-term Employee may continue the two-year contract even after he turned 60.
4. The National Labor Relations Commission issued a remand order based on the Court’s ruling, but did not order reinstatement of the Employee. The National Labor Relations Commission, assuming the contract would have been renewed only once, ordered the Employer to pay only two years’ wages.
5. Employee filed a follow-on administrative lawsuit, challenging the Central Labor Relations Commission’s decision.
Court Decision
The court ruled, “If a legitimate expectation of contract renewal is recognized and the employer’s refusal to renew is deemed to have no reasonable grounds, the contract cannot be concluded to have been terminated immediately after a single renewal. . . Although the [Employer’s] regulations stipulate detailed evaluation criteria for determining whether to renew the contract, we cannot find any evidence that [Employee’s] evaluation was poor or that he lacked job performance.”
Thus, the court opined that there was no basis for believing that the contract would have been renewed only once, considering the employee’s work attitude, disciplinary record, or relationships with fellow members.
This decision reinforces a critical principle under Korean labor law: even for fixed-term employees aged 55 or older who are exempt from automatic conversion to regular employment under the Fixed-Term Employment Act of Korea, an employer cannot arbitrarily refuse contract renewal where a legitimate expectation of continued employment exists. Mandatory retirement rules applicable to regular employees do not, by themselves, justify non-renewal of a fixed-term contract, and labor authorities may not assume a single, limited renewal absent concrete evidence. Employers in Korea, therefore, must base non-renewal decisions on clear, objective, and documented grounds.
IPG Legal is a leading law firm in employment and labor law in Korea, particularly in matters involving foreign-invested companies, senior executives, and cross-border employment issues. The firm advises multinational employers and employees on Korean labor law, including unfair dismissal disputes, fixed-term and indefinite-term employment issues, executive separations, workplace investigations, and proceedings before the Labor Relations Commissions and Korean courts. With deep experience navigating complex, precedent-driven labor disputes and a practical understanding of how labor authorities apply the Korean Labor Standards Act and related statutes in practice. IPG Legal is known for delivering clear, strategic, street-smart, and commercially sound advice in high-stakes employment matters.
by Sean Hayes
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