[1] In a case where a right to expect the renewal of an employment contract is recognized for a fixed period of time, whether an employee has a legal interest to dispute the validity of the refusal after the termination of the employment contract (affirmative)

[2] In a case where a fixed-term employment contract is concluded after the enforcement of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers, whether the right to renew the employment contract is denied where the labor relationship is terminated within two years or the total period of employment exceeds two years (negative)

[1] In principle, the status of an employee who entered into an employment contract for a fixed period shall be terminated upon the expiration of the fixed period and, if the employment contract is not renewed, the relevant employment contract shall be renewed upon the absence of the declaration of his/her intention of refusal to renew the contract. However, even if the term expires in the employment contract, employment rules, collective agreement, etc. provides that the said contract shall be renewed upon the fulfillment of certain requirements even though the term expires, or in full view of various circumstances surrounding the relevant employment relationship, including the requirements for renewal such as the contents of the employment contract, the motive and circumstances leading up to the execution of the employment contract, the standards for renewal of the contract, etc., the establishment and the actual conditions of the contract, and the contents of the work performed by the employee, etc., if the contract satisfies certain requirements between the parties to the employment contract, and thus the employer has a trust relationship that the contract shall be renewed if the contract is renewed, and thus, the employer's refusal to renew the employment contract unfairly in violation

[2] In principle, Article 4(a) of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers (hereinafter “fixed-term Act”) provides that an employer may employ a fixed-term worker within a two-year period of time. Even if the total employment period of a fixed-term worker exceeds two years, a fixed-term worker shall be deemed an employee without a fixed-term employment period, considering that the legislative purpose of the Act is basically to guarantee the status of an employee by preventing abuse of a fixed-term employment contract, the formation of legitimate expectation right for renewal of a fixed-term worker under the above provision is not restricted. Therefore, even if a fixed-term employment contract was concluded after the enforcement of the fixed-term employment contract, the fixed-term employment relationship is not necessarily terminated within two years or the total employment period exceeds two years cannot be acknowledged. If a reasonable renewal right can be acknowledged, the interest in a lawsuit seeking renewal is not denied merely on the ground that the employment relationship was terminated as a matter of course at the expiration of two years from the date of the first employment contract.

[1] Article 23 of the Labor Standards Act, Article 12 of the Administrative Litigation Act / [2] Article 4 of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers

[1] Supreme Court Decision 2007Du1729 Decided April 14, 201 (Gong2011Sang, 925) Supreme Court Decision 2002Du8640 Decided July 8, 2005 (Gong2005Ha, 1341) / [2] Supreme Court Decision 2014Du45765 Decided November 10, 201 (Gong2016Ha, 1930)

Plaintiff 1 and one other (Law Firm Alternative, Attorneys Regular Ho-ho et al., Counsel for the plaintiff-appellant)

The Chairman of the National Labor Relations Commission

Unlimited Partnership Environment (Law Firm Seocheon, Attorneys Shin Young-soo et al., Counsel for the defendant-appellant)

Daejeon High Court Decision 2015Nu11279 decided November 26, 2015

The judgment of the court below is reversed, and the case is remanded to Daejeon High Court.

1. Summary of the judgment below

The lower court deemed that a fixed-term employment contract was concluded between the Plaintiffs and the Intervenor joining the Defendant (hereinafter “ Intervenor”), and determined that the instant lawsuit was unlawful as it had already expired at the time of closing argument in the first instance trial for the following reasons.

A. In light of the relevant provisions, legislative intent, etc. of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers (hereinafter “ Fixed-Term Act”), a fixed-term employment contract newly concluded after the enforcement of the Fixed-Term Workers Act is anticipated to be terminated within two years, and thus, the right to expect that the total period of use may be concluded exceeding two years may not be recognized.

B. Even if it is assumed that the Plaintiffs’ right to renew the contract is recognized, each of the Plaintiffs’ employment contracts began from September 3, 2012 to December 31, 2012, and both Plaintiff 2 and December 31, 2012 expired, and thus, from September 1, 2013 to August 31, 2013, for Plaintiff 1, the actual contract period excluding the probation period for each Plaintiff’s above contract period, is about nine months, and for Plaintiff 2, the employment contract for each of five months has been repeatedly renewed within the scope of two years, which is two years from each of the above contracts that the Plaintiffs entered into with the Intervenor.

2. Judgment on the grounds of appeal

A. In principle, a worker who has entered into an employment contract for a fixed period of time shall be automatically dismissed even if the employee’s status as the employee is terminated upon the expiration of the fixed period and if the employment contract is not renewed, there is no declaration of refusal. However, even if the term expires in the employment contract, employment rules, collective agreement, etc. provides that the employment contract shall be renewed upon the fulfillment of certain requirements, regardless of the expiration of the term, or in full view of various circumstances surrounding the employment contract, including the requirements for renewal, such as the contents of the employment contract, the motive and circumstances leading up to the execution of the employment contract, the standards for renewal of the contract, the establishment of procedures and the actual conditions thereof, and the contents of the work performed by the employee, etc., in a case where the employer has a trust relationship that the employment contract shall be renewed if certain requirements are met between the parties to the employment contract, thereby allowing the renewal of the employment contract, and thus, the employer’s refusal of the employment contract unfairly in violation of such provision does not have any effect, as it is unfair (see, e.g., Supreme Court Decision 2008Du68).

Meanwhile, Article 4 of the Fixed-term Workers Act provides that an employer may employ a fixed-term worker within two years. Even if the total period of employment of a fixed-term worker exceeds two years, a fixed-term worker is deemed an employee without a fixed-term worker, the legislative purport of the provision is basically to guarantee the status of an employee by preventing abuse of a fixed-term employment contract, not to restrict the formation of legitimate expectation right for renewal of a fixed-term worker under the provision above (see Supreme Court Decision 2014Du45765, Nov. 10, 2016). Therefore, even if a fixed-term employment contract was concluded after the enforcement of the fixed-term employment contract, the fixed-term employment relationship cannot be deemed to have been terminated within two years or the total period of employment shall not be recognized. If a reasonable renewal right can be acknowledged to a fixed-term worker, the interest in a lawsuit seeking renewal is not denied on the ground that the labor relationship was terminated at the time of the first contract.

B. According to these legal principles, the lower court should have judged whether the right to renew is recognized to the Plaintiffs, and should have deliberated and judged whether the Intervenor’s refusal to renew the contract constitutes unfair dismissal, on the premise that the right to the renewal is recognized. However, without doing so, the lower court determined that there was no interest in the instant lawsuit on the ground that the period of the labor contract between the Plaintiffs and the Intervenor had already been terminated at the time of the closing of argument in the first instance trial, on the erroneous premise that the labor contract concluded after the enforcement of the Fixed-Term Act was not examined as to whether the right to renew the contract is recognized to the employee and that the contract is naturally terminated at the time

In so determining, the lower court erred by misapprehending the legal doctrine on the right to renew a fixed-term employment contract concluded after the enforcement of the fixed-term employment contract, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error is with merit.

3. Conclusion

Therefore, without further proceeding to decide on the remainder of the grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices

Justices Jo Hee-de (Presiding Justice)