■ Preparation of Employment Contract
Since the employment contract is a legal document that specifies the working environment for the employee, it is important to carefully review and sign it. This section will examine how to prepare an employment contract and what disadvantages may arise from not preparing one.
An employment contract refers to an agreement in which the employee provides labor to the employer and the employer agrees to pay wages for that labor. Although an employment contract can be verbal, it is generally recommended to be in writing because it is difficult to prove in the event of a dispute between the employer and employee. When entering into an employment contract, the employer must specify key working conditions such as wages, regular working hours, holidays, and paid vacation in writing to the employee (Article 17 of the Labor Standards Act).
Since working conditions are usually standardized in employment rules, only personal information such as job duties and workplace need to be specified in the employment contract, and other working conditions can be recorded as being subject to the employment rules. The effective date of the employment contract is generally the date of the contract, but for the determination of retirement benefits and paid vacation, the date when the actual labor is provided is considered. Article 17 of the Labor Standards Act imposes an obligation on employers to protect relatively weaker employees by requiring them to prepare and provide the employment contract in writing to the employee. Therefore, failure to prepare an employment contract or provide it to the employee may result in a fine of up to 5 million won.

■ Employment Contract Period
❍ Principle
The employment contract cannot exceed two years, except for contracts without a specific term and those required for the completion of certain projects. When the period expires after hiring on a fixed-term basis, the employment relationship is automatically terminated. If the period exceeds two years, the employee is considered to have entered into an open-ended employment contract. However, if there are exceptions to the period of use, such as the completion of a project or the necessary period for a specific task, even if the use period exceeds two years, it is not considered an indefinite employment contract.

❍ Exception: Fixed-term Employment Contracts and Renewal Expectations Supreme Court ruling 2011. 4. 14. 2007du1729 Decision [Unfair Dismissal, Unfair Labor Practices]

For employees hired on a fixed-term basis, their status as employees is automatically terminated when the period expires, and if the employment contract is not renewed, they will be deemed to have retired without any expression of refusal to renew. However, if the employment contract, employment rules, or collective agreement stipulate that the contract will be renewed even if the period expires, the contract may be an exception. Even if there is no such provision, if there is a legitimate expectation that the employment contract will be renewed when certain conditions are met, such as the content of the employment contract, the reason and process of the employment contract, the criteria for renewal, and the setting of renewal requirements or procedures, and the nature of the work performed by the employee, the employer's refusal to renew the employment contract without justification is as ineffective as unfair dismissal.

■ Prohibition of Unfair Prearrangement Supreme Court ruling 2008. 10. 23 2006da37274 Decision [Contractual Payment]

❍ Principle
If a worker agrees to work for a certain period of time and enters into an agreement with the employer to pay a specified amount of money if the worker
resigns before the agreed-upon period, without inquiring about the extent of damages incurred by the employer due to the worker's early resignation, this would be clearly in violation of Article 20 of the Labor Standards Act and therefore would not be recognized as legally binding. Additionally, if the purpose of the agreement is to have the worker return the wages that should rightfully be paid to the worker for resigning before the agreed-upon work period, it would also be contrary to the legislative purpose of the above provision and would not be recognized as legally binding.

❍ Exception
If the agreement is intended for the worker to repay all or part of the actual cost incurred by the employer for the worker's education, training, or internship, with the obligation to repay waived if the worker continues to work for a certain period of time, the necessity of such an agreement is recognized. In this case, it is evaluated not only as a cost that the employer would have borne for the work-related necessity and benefit, but also as a cost that the worker would have voluntarily and jointly borne for the benefit, and the agreement on the work period and the amount to be repaid are determined within a reasonable and legitimate range. If such an agreement does not unreasonably force the worker to continue to work against the worker's will, it would not be considered as a violation of Article 20 of the Labor Standards Act.