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

In the case of an employee who entered into a labor contract with a fixed period of time, his/her status as an employee shall be terminated as a matter of course, and even if the employee fails to renew his/her labor contract, the employee shall naturally retire without the expression of his/her intent to refuse renewal. However, even if the term expires in the labor contract, employment rules, collective agreement, etc. provides that a labor contract shall be renewed if the employee satisfies certain requirements despite the expiration of the term, or taking into account various circumstances surrounding the labor relationship, such as the contents of the labor contract, motive and background leading up to the formation of the term of the labor contract, standards for renewal of the contract, etc., the establishment of the term and conditions of the employment contract, the actual condition of the employment contract, and the contents of the work performed by the employee, etc., the trust relationship between the parties to the labor contract shall be deemed renewed if the employer satisfies certain requirements, and thus, the employer’s legitimate right to expect renewal of the labor contract shall be determined based on the objective and reasonable ground for refusal of the employment contract and the circumstances surrounding the employment contract.

Article 23 of the Labor Standards Act, Article 4 of the Act on the Protection, etc. of Fixed-Term and Part-Time Workers, Article 2 Subparag. 1 and Article 21 of the Act on Prohibition of Age Discrimination in the Aged and Elderly Employment Promotion, Article 2 Subparag. 1 and Article 32 of the Seafarers Act

Supreme Court Decision 2007Du1729 Decided April 14, 201 (Gong2011Sang, 925) Supreme Court Decision 2016Du50563 Decided February 3, 2017, Supreme Court Decision 2015Du4493 Decided October 12, 2017 (Gong2017Ha, 211)

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

The Chairman of the National Labor Relations Commission

Korea Forest Shipping Co., Ltd. (Law Firm Yang Hun-Hun, Attorneys Lee Ho-ju et al., Counsel for the plaintiff-

Seoul High Court Decision 2018Nu75285 decided May 30, 2019

All appeals are dismissed. The costs of appeal are assessed against the Defendant and the Intervenor joining the Defendant.

The grounds of appeal are examined.

1. In the case of an employee who entered into an employment contract with a fixed period of time, his/her status as an employee is naturally terminated and, in principle, the employee’s refusal to renew the employment contract is naturally dismissed even if the employee does not express his/her intent to renew the employment contract. However, despite the expiration of the term of the employment contract, employment rules, collective agreement, etc., if the employee satisfies certain requirements, or if the employee’s right to renew the employment contract is deemed to be renewed without such provision, the employee’s right to renew the employment contract should be determined based on objective and reasonable circumstances, including the motive and background leading up to the formation of the employment contract and the standards for renewal of the contract, and the details of the work performed by the employee, etc. In light of the aforementioned circumstances, if the employee’s right to renew the employment contract is deemed to be renewed upon fulfilling certain requirements between the parties to the employment contract and the employer’s right to renew the employment contract, the employer’s right to renew the employment contract should be determined based on the employer’s reasonable and reasonable nature of the employment contract at issue (see Supreme Court Decision 2060Du162, supra.

2. Based on the following circumstances, the lower court determined that the right of legitimate expectation would be recognized to renew the labor contract on the grounds that there was a fiduciary relationship between the Plaintiffs as seafarers and the Intervenor joining the Defendant (hereinafter “ Intervenor”) that the contract would be renewed upon meeting certain requirements. Furthermore, the lower court determined that there was no reasonable ground for the Intervenor’s refusal to renew the contract to the Plaintiffs on the sole basis of the materials that the Plaintiffs’ work performance was insufficient before concluding the contract with the Intervenor.

(1) A contract of employment prepared by the plaintiffs and intervenors is premised on the fact that the contract of employment can be renewed.

(2) Although the business operator of the instant remote island service route has been changed several times, the Plaintiffs worked as the captain of the vessel of the instant remote island service route since 2005 or 2008, and have been working for a long period of time in the way of renewal of the contract on a yearly basis. The Intervenor was previously selected as the business operator of the instant remote island service route and operated the passenger vessel operation business. At that time, Plaintiff 2 had renewed the employment contract with Plaintiff 2 several times. The Plaintiffs did not receive retirement allowances each time when the passenger transport business operator of the instant remote island service route is changed, and the Intervenor was also aware of this.

(3) Plaintiff 2 had already passed the retirement age set by the Intervenor at the time of concluding a labor contract with the Intervenor. Plaintiff 1 had reached the retirement age set by the Intervenor at the time of the termination of the labor contract, but does not seem to have any circumstance such as the ability of the captain of the ship to perform duties required by the head of the ship, or the decline or risk of work efficiency according to the age is increased. The Intervenor also acknowledges that the Intervenor may continue to work.

3. Examining the reasoning of the lower judgment in accordance with the foregoing legal doctrine, the lower court did not err by misapprehending the legal doctrine regarding the right to renew a fixed-term worker and the reasonable grounds for refusing to renew a fixed-term employment contract, or by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules

4. The appeal by the Defendant and the Intervenor is without merit, and all of them are dismissed. 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 Lee Dong-won (Presiding Justice)