[Public Voices] Strategic Regulations Needed for Re-Employment of Retirees

Supreme Court Presents First Criteria for Determining 'Re-employment Practice'
Recognition Possible Even Without Explicit Regulations
Decision Depends on Workplace Customs and Actual Re-employment Status

Choi Jisoo, Attorney at Law, Law Firm Lin.

In today's era of longevity, where living to 100 is becoming common, voices from the labor sector argue that the retirement age of 60 is too early. On the other hand, from the employer's perspective, where extending the retirement age is burdensome, cases of re-employing retirees as contract workers as needed are increasing.

Recently, however, the Supreme Court went beyond the previous principle that "the decision to maintain the employment relationship with a worker who is retired by operation of law generally falls within the employer's authority," and explicitly articulated the legal doctrine regarding the 'expectation right of re-employment after retirement.' This ruling is noteworthy for employers and managers concerned about unnecessary re-employment.

Even before this Supreme Court ruling, there were lower court decisions recognizing the employer's obligation to re-employ based on the formation of a legitimate expectation of re-employment, by applying the legal principles from the 2014 Supreme Court ruling on the renewal expectation right of fixed-term workers.

However, this Supreme Court ruling is significant in that it clearly states that even if there are no provisions regarding re-employment after retirement in employment contracts, work rules, or collective agreements, if a 're-employment practice equivalent to such provisions' is established, a trust relationship regarding re-employment after retirement can be formed, thereby recognizing the expectation right. Furthermore, it provides specific criteria to determine whether such a 're-employment practice equivalent to such provisions' is established.

Specifically, even without explicit provisions, when considering various factors such as ▲ the circumstances and duration of re-employment implementation ▲ the proportion of workers who have reached retirement age and were re-employed in the relevant occupation or job field ▲ reasons for refusal if any workers were denied re-employment, if it is recognized that a re-employment practice equivalent to such provisions is established at the workplace, and a trust relationship is formed between the parties to the employment contract that a worker who reaches retirement age can be re-employed as a fixed-term worker upon meeting certain conditions, the worker may be recognized as having an expectation right to be re-employed after retirement accordingly.

If a workplace is considering re-employment of retirees in the future, it is necessary to clearly diagnose and review the company's regulations related to re-employment and the actual status of re-employment within the workplace in advance, as outlined below, to prevent unnecessary legal disputes.

Basically, employers should broadly stipulate the employer's discretion regarding re-employment as contract workers after retirement in the company's collective agreements and work rules, and present the criteria for re-employment eligibility review abstractly or place a high emphasis on the employer's discretion, so that a trust relationship guaranteeing re-employment is not naturally formed.

Meanwhile, referring to the legal principles concerning the renewal expectation right of fixed-term workers, explicitly stating in employment contracts or work rules that there is no obligation for re-employment after retirement, or not having any provisions regarding the requirements or procedures for re-employment of retirees and deciding re-employment solely based on discretionary judgment, can also be a method to avoid forming an expectation right.

Furthermore, when implementing a re-employment system not stipulated in regulations, employers should inform workers in advance that such a system is intended for temporary business needs, or take measures such as temporarily suspending the re-employment system when unnecessary. It is also necessary to carefully manage the number of re-employed workers arithmetically and statistically to avoid the misconception that a re-employment practice for workers after retirement exists at the workplace.

Attorney Choi Ji-su, HR Team, Law Firm Lin