Section 2: Individual Labor Relations
Chapter 8: Expiration of Employment Contract
4. Reasonable Reasons for Refusing Contract Renewal and Conversion to Non-fixed Term Employment Contract
4.2 Recognition of Reasonable Reasons for Refusing Contract Renewal Based on the Evaluation that guatantees Objectivity and Fairness
| Supreme Court Decision on July 28, 2011, Case 2009du5374 | |||||
| * Plaintiff, Appellant: Choi ○○
* Defendant, Appellee: Chairman of the Central Labor Commission * Intervenor, Defendant: Yesji Credit Information Co., Ltd. 2. Court Judgment a. When a fixed-term labor contract is established, and if short-term contracts are repeatedly renewed over a long period, making the specified term effectively nominal, various factors must be considered. These factors include the content of the contract, the motivations and circumstances for entering into the labor contract, the intended purpose of the term, the true intent of the parties, customary practices in similar labor contract formations, and labor protection regulations. If it is recognized that the term specified is merely nominal, the contract should be regarded as having no fixed term in reality, despite the wording of the contract. In such Case s, the employer's refusal to renew the contract without just cause is invalid. However, if there are no special circumstances indicating that the contract's fixed term is merely nominal, the labor relationship between the parties naturally ends upon the expiration of the term, without the need for actions such as dismissal by the employer. In this Case , the participant entered into a labor contract with the plaintiff around March 1, 2004, for a duration of three years, with the stipulation that employment would automatically terminate upon the expiration of the term. The participant established guidelines for managing contract employees, including criteria for evaluation and re-contracting. According to these standards, annual performance evaluations were conducted for contract employees, and re-contracting was denied to the lowest-performing 5%. Since the plaintiff signed only a single three-year labor contract, which was not repeatedly renewed, it can be concluded that the fixed term specified in this Case was not merely nominal. b. For employees who have entered into a fixed-term labor contract, the employment relationship naturally terminates when that period expires. If the employment contract is not renewed, the employee is, in principle, automatically considered to have resigned, even without an express refusal of renewal. However, if the labor contract, employment rules, or collective agreements contain provisions indicating that the labor contract may be renewed upon meeting certain conditions despite the expiration of the term, or even in the absence of such provisions, if various circumstances surrounding the labor relationship such as the content of the labor contract, the motivations and circumstances under which the contract was made, the criteria for contract renewal, the establishment and operation of requirements and procedures for such renewal, and the content of the work performed by the employeesare collectively considered, and it is established that a trust relationship exists between the parties that the labor contract will be renewed if certain conditions are met, granting the employee a rightful expectation of renewal, then the employer's unjust refusal to renew the contract is invalid. This is equivalent to an unfair dismissal, and in such Case s, the labor relationship after the term expires is regarded as if the contract had been renewed. c. In the plaintiff's Case, the three-year performance evaluation involved no possibility for subjective judgment by the evaluator, and there is no evidence to suggest that the qualitative evaluation lacked objective rationality or fairness. Therefore, it is recognized that the participant had a rational reason to refuse the renewal of the labor contract with the plaintiff. Consequently, it cannot be concluded that the participant unreasonably refused to renew the labor contract. Although there are some inappropriate aspects in the reasoning of the original verdict, the conclusion that rejects the plaintiff's claim that the refusal of renewal is invalid, similar to an unfair dismissal, is justified. |
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