[1] In a case where the right to expect renewal of an employment contract is recognized for a fixed period of time to an employee who signed the employment contract, the validity of the employer’s refusal to renew the employment contract (negative) and whether the employment contract after the expiration of the period of time is the same as the renewal of the employment contract (affirmative)

[2] The standard for determining whether a legitimate right to expect renewal of an employment contract is recognized where a fixed-term employment contract is concluded after the retirement age has already expired

[1] Article 23 of the Labor Standards Act, Article 4 (1) of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers / [2] Article 4 (1) 4 of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers, Article 2 subparagraph 1 of the Act on Prohibition of Age Discrimination in the Aged, and Article 21 of the Act

[1] Supreme Court Decision 2007Du1729 Decided April 14, 201 (Gong2011Sang, 925) Supreme Court Decision 201Du12528 Decided February 13, 201 (Gong2014Sang, 590) Supreme Court Decision 2014Du45765 Decided November 10, 2016 (Gong2016Ha, 1930)

Plaintiff 1 and four others (Law Firm Alternative, Attorneys Shin Jae-tae et al., Counsel for the plaintiff-appellant)

The Chairman of the National Labor Relations Commission

Seobol (Law Firm LLC, Attorneys Kim Nung-hwan et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2016Nu40568 decided September 1, 2016

All appeals are dismissed. The costs of appeal are assessed against the Intervenor, while the remainder is assessed against the Defendant.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed by the intervenor).

In the case of an employee who entered into a labor contract with a fixed period of time, the status relationship as an employee is naturally terminated upon the expiration of the fixed period of time, and even if the employee fails to renew the labor contract, he/she shall be automatically retired from his/her office. However, even if the term expires in the labor contract, employment rules, collective agreement, etc., the said employee shall be renewed upon the fulfillment of a certain term of time. In full view of various circumstances surrounding the labor contract, such as the details of the labor contract and the motive and circumstances leading up to the renewal of the labor contract, the standards for renewal of the contract, the establishment of the procedure and the actual conditions thereof, and the contents of the work performed by the employee, if there is a trust relationship between the parties to the labor contract that the contract is renewed if the certain term of time is met, the employer’s refusal of the renewal of the labor contract in violation of the above term of time constitutes an exception to the Act on the Protection of Fixed-Term Workers and the Act on the Protection of Fixed-Term Workers (see, e.g., Supreme Court Decision 201Du214817.).

Meanwhile, the proviso of Article 4(1)4 of the Fixed-term Employment Act provides that an elderly person may be employed as a fixed-term worker for more than two years in cases where an employment contract is concluded with an elderly person under Article 2 subparag. 1 of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion (hereinafter “the Elderly Employment Act”). This also takes into account the fact that the employment itself of the elderly may be avoided and the employment of the aged may be reduced for the aged in cases where an elderly person is employed as a fixed-term worker for more than two years, as in the case of the ordinary worker. In addition, Article 21 of the Elderly Employment Act imposes an obligation to endeavor to re-employed an employee who has reached the retirement age limit to an occupation suitable for his/her ability to perform his/her duties, and that the former employment period may be excluded when calculating the continuous employment period for calculating the retirement allowance, etc. under an agreement between the parties, and that the decision of wages may be different from the previous employment decision.

Considering the aforementioned legal principles as well as the legislative intent of the above provisions of the Fixed-term Act and the Elderly Employment Act as well as the meaning of the retirement age set within the workplace, and the general intent of the parties to a labor contract to enter into a fixed-term employment contract after the retirement age already passed, in cases where a fixed-term employment contract was entered into upon the expiration of the retirement age, whether a legitimate right to expect renewal of an employment contract is recognized shall be determined by comprehensively taking account of the ability to perform duties required by the nature of the relevant employee, qualification for performing duties, degree of decrease in work efficiency or risk according to the age, circumstances where the relevant employee, who has passed the retirement age,

According to the reasoning of the lower judgment, the lower court determined that: (a) the Plaintiff’s employees were not in need of renewal of the labor contract for 10 years following the conclusion of the labor contract with the Plaintiffs on October 1, 201; (b) the Intervenor continued to use the Plaintiffs as its employees without entering into a new labor contract until February 28, 2014; and (c) the Intervenor’s retirement age was December 31 of the year in which the Intervenor’s employees were 55 years old; and (d) the Intervenor’s employees were not in need of renewal of the labor contract for 10 years following the conclusion of the contract. The lower court determined that the Plaintiff’s request for renewal of the labor contract had reached the respective retirement age from December 31, 2011 to December 31, 2013, based on the premise that the Intervenor’s employees were not in need of renewal of the employment contract for 20 years following the expiration of the contract period.

In light of the above legal principles and records, the above judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there are no errors in the rules of evidence or in the misapprehension of legal principles as to the legitimate grounds of rejection of renewal of a contract or renewal of a contract.

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Chang-suk (Presiding Justice)