Ⅱ. Limits on Employment Period for Fixed-term Employees and Exceptions

1. Concept

We can distinguish employment contracts into three categories based upon employment period. They are ① contracts without fixed-term, ② contracts necessary for completion of a project, and ③ short-term employment contracts within two years. Since the protection laws for irregular employees came into effect July 1st, 2007, the employment period is determined to be within two years, excluding the contract without fixed period, and in cases where the labor contract has been renewed for more than two years, the contract becomes one without a fixed term. Accordingly, as the employment contract reaches the end of the two year period, the employer shall decide whether to give the employee a permanent position or terminate employment relations. Even though the employment contract has been renewed repeatedly several times, employment is estimated to be terminated due to expiration of the valid period as the employer did not renew his/her last employment contract. In reality, employers have to receive a judgment through the labor commission or the court to confirm whether the employment that had been renewed repeatedly several times was deemed an employment contract without a fixed period. Generally in court rulings, in cases where a fixed term employee had worked for at least five years and renewed his/her employment contract four times or more, the contract was regarded as expired when it was no longer renewed; but in cases where the fixed term employee had worked for about six years and renewed his/her employment contract at least five times, the contract was regarded as transferred to employment without fixed term when renewal did not happen. The protection laws for irregular employees limit the period of the fixed-term employment to two years to clarify any disputes regarding employment period. However, even though the employment period for fixed-term employees is regulated, some exceptions were introduced due to business characteristics, work characteristics, relations with other laws, and legislative policies.

2. Limit on employment period for fixed-term employees

Article 4 of the Act on the Protection, etc. of Fixed-term and Part-time Employees(hereinafter referred to as the Fixed-Term Employee Act) regulates that an employer may hire a fixed-term employee for a period not exceeding two years(for repeated fixed-term labor contracts, the sum of the periods of such contracts shall not exceed two years.) Accordingly, the employer cannot use fixed-term employees more than two years, and if he/she does, the employee is regarded as a regular employee. That means, if the employment contract was terminated after exceeding two years, the employee’s status changes to regular or non-fixed-term employment. Accordingly, the Fixed-Term Employee Act was designed to avoid disputes over repeated and renewed employment by stipulating the two year limit on the employment period, and to promote temporary employees into regular positions. The reasons to limit the employment period of fixed-term employees include preventing legal disputes from renewed or repeated employment contracts, and induce fixed-term employees to gain regular positions. Many other countries restrict fixed-term employment. Korea does not, but seeks to protect them by limiting the employment period.

3. Exceptions to the fixed-term employment period and purposes

(1) Cases where the period is needed to complete a project or particular task

If a construction project is proved objectively to be a fixed-term business requiring a certain amount of time to complete, an employment contract can be made for the period required to complete the project in excess of two years. This project-based exception is limited to temporary or one-time business. This includes: ① construction projects; ② temporary surveyors during statistical survey periods; ③ temporary commissioned projects; and ④ secretaries of a part-time director with a three-year contract period.

(2) Cases where a fixed-term employment contract is made with the aged

The Elderly Employment Promotion Act was established to promote the employment of older people, with elderly referring to those aged 55 and over. Employment of such persons has no employment period limits for fixed-term employment contracts.

(3) Cases where a job requires professional knowledge and skills

These cases refer to any of the following: ① The employed person holds a doctoral degree and is engaged in the relevant field; ② The employed person holds a national technical qualification of technician level and is engaged in the relevant field; and ③ The employed person holds a professional qualification(in one of 25 approved fields) and is engaged in the relevant field. Those with doctoral degrees, national technical qualifications of technician level, or professional qualifications issued by the government for 25 fields are generally recognized as specialist with professional knowledge and skills in a particular field. This exception was adopted in reflection of the characteristics of jobs involving these professional specialists. Technician refers to a person who holds a national technical qualification at technician level pursuant to the National Technical Qualifications Act. Professional certificate holder refers to a specialist who is qualified in at least one of the 25 fields recognized by the government in relevant law.

(4) In cases where a separate law defines the employment period of fixed-term workers differently

1) The Regulations for Contractual Position of Public Servants regulate that the employment period for such public servants shall be a necessary period within five years.

2) The Enforcement Decree on Staffing Educational Personnel and The Private School Act regulates that the employment period of fixed-term teachers shall be up to one year, and if necessary, can be extended up to 3 years.

3) The Act on Foreign Workers’ Employment regulates that foreign workers can be employed for up to three years after entering Korea.

(5) In cases where there is a justifiable reason

1) If a fixed-term employee is needed to fill a vacancy arising from a worker’s temporary suspension from duty or dispatch until the worker returns to work: In cases where an employee has taken a leave of absence after giving birth, contracting an illness, doing military service, etc., and took a long-term dispatch, a fixed-term employee can be used to fill it.

2) The period needed for a worker to complete schoolwork or vocational training is defined: When an employee has taken the chance to develop his/her job skills, his/her employment period shall be exceptional for its limit.

(6) Consideration of legislative policies (this exception is gradually extended)

1) In cases where the earned income falls within the highest 25% : Where the earned income of fixed-term employees engaged in occupations like managers, professionals, and other similar jobs according to the Korean Standard Classification of Occupations falls within the highest 25%, there is no limit to employment period(earned income is based on the average annual earned income of the past two years);

2) Where jobs are provided to develop the public’s vocational competency, promote employment and offer necessary social services in accordance with other laws such as the Basic Employment Policy Act and the Employment Insurance Act;
3) Where jobs are provided to promote the employment of discharged soldiers and grant them livelihood stability pursuant to Article 3 of the Support for Discharged Soldiers Act;

4) Where a person who has professional military knowledge or skills recognized by the Minister of Defense is engaged in the relevant field or where a person teaches national security and military science in a university pursuant to subparagraph 1 of Article 2 of the Higher Education Act;

5) Where a person with exceptional experience is engaged in a field related to national security, national defense, diplomacy or unification;

6) Where a person is engaged in work specified in any of the following items in a school under Article 2 of the Higher Education Act(including graduate schools under Article 30 of the same Act): ① Work of a teaching assistant under Article 14 of the Higher Education Act; or ② Work of an adjunct teacher, professor emeritus, part-time instructor, visiting teacher, etc., under Article 7 of the Enforcement Decree to the Higher Education Act;
7) Where a part-time worker’s weekly working hours, under Article 18 of the Labor Standards Act, is evidently short;

8) Sports athletes under subparagraph 4 of Article 2 of the National Sports Promotion Act and where a person is engaged in teaching sports pursuant to subparagraph 6 of the same Article;

9) Where a person is directly engaged in research work or directly involved in research work as an assistant, such as by carrying out experiments, surveys, etc., in any of the following research institutions:
① National or public research institutions; ② Government-invested research institutions established under the Act on the Establishment, Operation and Fosterage of Government-Invested Research Institutions and the Act on the Establishment, Operation and Fosterage of Government-Invested Science and Technology Research Institutions; ③ Specific research institutions under the Support of Specific Research Institution Act; ④ Research institutions established under the Act on the Establishment and Operation of Local Government-Invested Research Institutes; ⑤ Public institution-affiliated research institutions under the Act on the Management of Public Institutions; ⑥ Company- or university-affiliated research institutions; and ⑦ Research institutions which are a corporation established under the Civil Act or any other Act.