[1] In a case where it is deemed that a fixed term of employment contract is merely a form of a contract, whether a contract without a fixed term of time can be deemed to have been entered into (affirmative), and in such a case, the validity of the employer’s refusal of a renewal contract without a justifiable ground (=negative)

[2] In a case where Company A entered into a labor contract with Company B by setting the term of the contract to be automatically retired upon expiration of three years, and notified that it is impossible to renew the contract to Party B after expiration of the contract term, the case affirming the judgment below holding that setting the term of the above labor contract cannot be deemed as merely a form, in light of the fact that Party B’s work performance evaluation conducted every year for contract workers in accordance with the “Standards for the Evaluation and Recontract of Contract Workers” established by Company A and refused to conclude a re-contract with the lower 5% employees.

[3] The validity of the employer's refusal to renew an unfair labor contract against the right to expectation in a case where the employer's right to expect the renewal of the labor contract is recognized to have the right to expect the renewal of the contract even after the expiration of the contract

[4] In a case where Gap corporation entered into a labor contract by setting the contract period of Eul as three years for the contract period of Eul and three years for the expiration of the contract period, and notified Eul that it is impossible to renew the contract after the expiration of the contract period, the case affirming the judgment below which held that Eul corporation's refusal to renew the labor contract unfairly on the ground that Gap corporation's refusal of Eul's employment contract was a reasonable ground for the refusal of Eul's employment contract, in light of the fact that Eul's performance evaluation for the three-year performance constitutes the subject of re-contract under the "Standards for Evaluation and Re-contract for Contract Employees" prepared by Gap company as the lowest level of performance evaluation for the three-year performance evaluation; and that Eul's performance evaluation for the three-year performance evaluation constitutes the subject of re-contract (the second five percent)

[1] Article 23 of the Labor Standards Act / [2] Article 23 of the Labor Standards Act / [3] Article 23 of the Labor Standards Act / [4] Article 23

[1] Supreme Court Decision 2005Du5673 Decided February 24, 2006 (Gong2006Sang, 527), Supreme Court Decision 2007Du11566 Decided October 11, 2007 / [3] Supreme Court Decision 2007Du1729 Decided April 14, 201 (Gong201Sang, 925)

[Judgment of the court below]

The Chairman of the National Labor Relations Commission

S. S. Credit Information Co., Ltd. (Law Firm S. Law, Attorneys Park Jae-woo et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2008Nu21609 decided March 18, 2009

The appeal is dismissed. The costs of appeal are assessed against the Plaintiff, including costs of participation in the appeal.

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

In a case where a contract is prepared with a fixed period of time, for example, where the fixed period of a short-term employment contract becomes merely a type of a contract, such as where the contract is repeatedly renewed over a long period of time, and the motive and circumstances leading up to the execution of the contract, the purpose and genuine intent of the parties to the contract, practices on the conclusion method of the same kind of employment contract, workers protection regulations, etc., it shall be deemed that the contract was entered into without a fixed period of time, notwithstanding the terms and conditions of the contract. In such a case, the employer’s refusal of the renewal contract without justifiable grounds shall be deemed null and void as in the case of dismissal. However, unless there are special circumstances to see that the term of the contract is merely a form as above, a labor relationship between the parties to the contract is naturally terminated without separate measures such as dismissal of the employer (see, e.g., Supreme Court Decision 2005Du5673, Feb. 24, 2006).

The court below acknowledged the facts as stated in its reasoning based on its adopted evidence, and found the following facts: (a) the Intervenor joining the Defendant (hereinafter referred to as the “ Intervenor”) determined that the period of the contract in this case was automatically retired upon expiration of the contract period with the Plaintiff on March 1, 2004 by setting the contract period of three years; (b) the Intervenor set the guidelines for the management of contractual workers, the evaluation of contractual workers, and the re-contract standards; and (c) the Intervenor refused to conclude a re-contract for the workers who fall under the lower 5% of the contract workers by performing the evaluation of their work performance every year in accordance with the above guidelines; and (c) the Plaintiff entered into a three-year employment contract and the labor contract was not renewed repeatedly.

In light of the above legal principles and records, we affirm the judgment of the court below as just.

The court below did not err in the misapprehension of legal principles as to labor contract and unfair dismissal for a fixed period of time as otherwise alleged in the ground of appeal.

2. As to the grounds of appeal Nos. 2, 3, and 4

In principle, in cases of a worker who entered into a labor contract with a fixed period of time, the status of the worker as an employee shall be terminated naturally upon the expiration of the contract and, if the contract is not renewed, the worker shall be automatically retired even if there is no declaration of intention of refusal to renew the contract. However, even if the term expires in the labor contract, employment rules, collective agreement, etc. provides that the contract shall be renewed upon the fulfillment of certain requirements, regardless of the expiration of the term, or taking into account all the circumstances surrounding the labor contract, such as the motive and circumstance during which the contract is concluded, the standards for renewal of the contract, etc., the establishment of the requirements or procedures for renewal of the contract, the actual condition of the labor contract, and the contents of the work performed by the worker, etc., and if the contract is acknowledged to have a legitimate expectation right to renew the contract in violation of the contract, the employer's refusal to renew the contract unfairly is the same as that of the previous contract being renewed (see Supreme Court Decision 2007Du1729, Apr. 14, 2011).

The reasoning of the judgment below and the circumstances acknowledged by the record, i.e., ① the intervenor did not refuse to renew the contract merely because the contract period has expired in the collective agreement concluded with the labor union composed of its employees, and agreed to determine whether to renew the contract according to the prescribed procedures by evaluating performance and personnel height, etc. ② The contract workers guidelines established by the intervenor may perform work performance evaluation for the contract workers in order to use them for the renewal examination, etc. of employment contract, and detailed matters such as evaluators and the time and method of evaluation are separately prescribed by the president. ③ The intervenor established the standards for the evaluation and renewal of contract workers: (i) the evaluation of work performance for the workers in the contract; (ii) the evaluation of work performance and the evaluation of work performance reflecting the performance of the contract workers in the contract; (iii) the evaluation of work performance and the evaluation of work performance reflecting the achievement rate of the contract workers in the contract; (iv) the intervenor’s right to renew the contract to all workers other than the workers in the lower 5% of the contract; and (iii) the adjustment order of the contract for the workers in the above three-year period.

However, according to the reasoning of the judgment of the first instance as cited by the court below and the records, the plaintiff was at the lowest among 8.79% of the contract workers in 89 in total, and at the highest level of comprehensive evaluation, the plaintiff constitutes a person excluded from contract renewal stipulated in the "Standards for the Evaluation of Contract Employees and Recontracts" as the lowest in the overall evaluation order, and the intervenor notified the plaintiff of the impossibility of renewal of contract through a resolution of the personnel committee on February 26, 2007.

The evaluation of performance performance against the plaintiff for three years is not likely to intervene in the subjective judgment of the evaluator, and there is no evidence to deem that the evaluation lacks objective rationality and fairness. Thus, the intervenor is deemed to have a reasonable ground to refuse the renewal of an employment contract against the plaintiff. Therefore, it cannot be deemed that the intervenor unfairly refused the renewal of an employment contract.

Although there are some inappropriate parts in the reasoning of the lower judgment, it is justifiable to have rejected the Plaintiff’s assertion that the rejection of renewal of the instant case has no effect like the rejection of unfair dismissal.

The court below did not err in the misapprehension of legal principles as to restrictions on dismissal for a fixed period of time as asserted in the grounds of appeal, or modification of employment rules.

3. Conclusion

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

Justices Yang Chang-soo (Presiding Justice)