The court has ruled that even for elderly workers aged 55 and above, the right to expect contract renewal continues to be recognized when they are hired as fixed-term employees, unless there are special circumstances.
The Administrative Division 1 of the Seoul Administrative Court (Presiding Judge Yang Sangyun) ruled in favor of the plaintiff on October 31 in the case (2024Guhap72438) where conductor A filed a lawsuit against the chairperson of the Central Labor Relations Commission seeking to cancel the commission's decision on a remedy for unfair dismissal. The court found it unjust for the Central Labor Relations Commission to order the employer to compensate conductor A, a fixed-term worker who had won an unfair dismissal case and could continue working, with only two years' wages, corresponding to a single contract term.
[Facts]
Conductor A signed two consecutive two-year fixed-term employment contracts with Foundation B and worked as a conductor. In 2020, Foundation B processed A's retirement, citing the foundation's management regulations, which set the retirement age at 60. A claimed unfair dismissal and applied for relief to the Labor Relations Commission, later filing an administrative lawsuit.
At that time, the court determined that since A was already an elderly worker aged 55 or older when the employment contract was signed, he was not converted to a permanent position even after working for more than two years, in accordance with the Act on the Protection of Fixed-Term and Part-Time Employees (Article 4, Paragraph 1, Subparagraph 4). The retirement age regulation of Foundation B applied only to permanent employees, so A, as a fixed-term worker, could continue to renew two-year contracts even after turning 60.
The Central Labor Relations Commission, following the court ruling, issued a new decision but did not order reinstatement. The commission assumed that the contract would have been renewed only once more and ordered Foundation B to pay only two years’ wages. In response, A filed another administrative lawsuit, claiming that the commission's new decision was unjust.
[Court’s Judgment]
The court stated, "If there is a legitimate expectation of contract renewal and there are no reasonable grounds for the employer to refuse renewal, it cannot be concluded that the contract would have ended immediately after a single renewal."
Foundation B argued that repeatedly renewing the employment contract would grant A an unfair privilege of lifetime employment, but this was not accepted. In order to refuse contract renewal, there must be objective, reasonable, and fair grounds based on social norms, and the burden of proof lies with the employer (Supreme Court decision 2018Du62492). Foundation B failed to present any special reasons.
The court noted, "Although the foundation’s regulations provide detailed evaluation criteria for contract renewal decisions, there is no evidence that A had poor evaluations or lacked job performance." There was no basis to believe that the contract would have been renewed only once, considering A’s work attitude, disciplinary history, or relationships with colleagues.
Furthermore, due to the nature of the conductor position, it cannot be concluded that job performance declines simply due to age, and the fact that a conductor older than A was hired after A’s dismissal supports this view.
Reporter Park Seongdong, The Law Times
※This article is based on content supplied by Law Times.
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