Supreme Court: "If a 'Contract Extension System' Exists After Retirement Age, Expectation Right for Reemployment Recognized"

Court: "Back wages must be paid up to the reemployment period"

The Supreme Court has ruled that even workers who have been recognized as unfairly dismissed must be reemployed as contract workers for a certain period after retirement age, and wages for that period must be paid.

This Supreme Court ruling declares that there can be an expectation right to be reemployed as a fixed-term worker after retirement age, and it is the first judgment to set forth the requirements for recognizing such an expectation right.

The Supreme Court's Third Division (Presiding Justice No Jeong-hee) announced on the 18th that it upheld the lower court's partial ruling in favor of plaintiff A in a lawsuit confirming the invalidity of dismissal against the company where A worked.

A, who worked at a steel mill, was dismissed in 2013 but was recognized by the court as unfairly dismissed. Subsequently, A filed a lawsuit demanding payment of unpaid wages.

The issue in the trial was whether the system of reemploying retired employees as contract workers for a certain period should also apply to A in calculating the unpaid wages. The company set the retirement age at 57 but operated a system allowing reemployment as fixed-term workers after retirement to work until age 60.

The first trial court mostly accepted A's claim for wages before retirement age but did not recognize the expectation right for wages after retirement age, stating it was difficult to see that reemployment after retirement was naturally expected.

However, the second trial court ruled that wages should be paid not only for the period before retirement but also for the period after retirement. The second trial court stated, "It is recognized that A had a legitimate expectation right for reemployment after retirement, it is difficult to see any reason for exclusion from reemployment, and even if A was repeatedly evaluated for reemployment on a one-year or six-month basis as a fixed-term worker, it does not appear that the contract would not have been renewed."

The Supreme Court also ruled that the second trial court's judgment was correct. The Supreme Court held that when there is a provision requiring reemployment of workers who have reached retirement age as fixed-term workers if certain conditions are met, or even if there is no such provision, the circumstances of the reemployment, the period of implementation, the proportion of workers reemployed among those who reached retirement age in the relevant job or field, and reasons for refusal of reemployment must be comprehensively considered.

The court stated, "If a trust relationship is formed between the parties to the labor contract that a worker who reaches retirement age can be reemployed as a fixed-term worker upon meeting certain conditions, the worker has an expectation right to be reemployed after retirement unless there are special circumstances."

This content was produced with the assistance of AI translation services.