Rehiring After the Retirement Age in Korea

1. Can a South Korean employer freely decide whether to rehire someone who reaches the retirement age?

As a starting point, yes. Extending the employment relationship of a worker who has reached the mandatory retirement age is the employer’s prerogative, and the employee has no right to demand it.

The Supreme Court of Korea settled this principle long ago.

Whether an employer will maintain the employment relationship of a worker who has reached the retirement age specified in the employment rules — by extending that age or otherwise — is, absent special circumstances, a matter within the employer’s authority, and the worker concerned cannot be said to have a right to demand an extension of the retirement age … nor can the refusal be held unjustified merely because it is harsh on that worker or inequitable compared with other workers.
— Supreme Court of Korea, February 29, 2008, 2007Da85997

The same judgment also fixed the legal character of the separation. Reaching the retirement age is an automatic ground of termination, so the relationship ends of its own accord, and the employer’s processing of the retirement is merely a “notification of a fact” — not a new formative act that strips the employee of their status, as a dismissal would be.

Statute does not compel rehiring either. The Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion requires employers to set the retirement age at 60 or above, and treats any lower figure as if it were 60 (Article 19). On rehiring, it says only this:

Where a person who has reached the retirement age wishes to be employed again at that workplace, the employer shall endeavor to rehire that person in an occupation suited to their ability to perform the work.
— Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion, Article 21(1)

“Shall endeavor” is a duty of effort. Breaching it does not by itself create an obligation to rehire. So does a retiree who is refused have no remedy at all? The Supreme Court filled that gap with the doctrine of legitimate expectation.

2. Where does the “legitimate expectation of rehiring” come from?

From the fact that practice can substitute for a rule. If a company has rehired its retirees without exception over a long period, the employee has a solid basis for believing the same will happen to them. The Supreme Court elevated that belief into a protected position.

The doctrine was first set out squarely in June 2023.

Where the employment contract, employment rules or collective agreement provides that an employee reaching the retirement age shall be rehired as a fixed-term employee upon satisfying certain requirements, or even where there is no such provision, if — considering the circumstances in which rehiring came to be implemented and the period of implementation, the proportion of those rehired among the employees reaching the retirement age in the relevant occupation or job field, and the reasons where rehiring was refused — it is found that a practice of rehiring equivalent to such a provision has become established at the workplace, so that a relationship of trust has formed, then absent special circumstances the employee holds an expectation of being rehired after the retirement age.
— Supreme Court of Korea, June 1, 2023, 2018Da275925

The employer in that case was a security and guarding contractor spun off from POSCO to serve its steelworks. Its employment rules, employment contracts and collective agreement contained no provision on rehiring whatsoever. The Supreme Court still found an expectation, because since the rehiring scheme was introduced in September 2012, “where a retiree wished to be rehired, that person was rehired as a fixed-term employee without exception.”

Later the same month, the Court carried the doctrine into remedy proceedings before the labor relations commissions and added the consequence.

Where an employee who is to retire at the retirement age is recognized as holding an expectation of being rehired as a fixed-term employee, the employer’s refusal to rehire without reasonable grounds is void as to the employee, just as an unfair dismissal would be.
— Supreme Court of Korea, June 29, 2023, 2018Du62492

In November of that year the reach of the doctrine widened. In a case involving a care worker who had been a fixed-term employee from the outset and then reached the retirement age, the Court held that the doctrine “applies likewise, absent special circumstances, where a fixed-term employee comes to leave on the ground of the retirement age” (Supreme Court of Korea, November 2, 2023, 2023Du41727).

The structure, then, is this.

3. Why did identical “may rehire” clauses produce opposite outcomes?

Set the recent judgments side by side and something striking emerges. The wording of the employment rules is essentially the same, yet the outcomes are opposite — and the company whose expectation was recognized had the thinner rule of the two.

The rule in 2018Du62492 went so far as to enumerate screening criteria, and the expectation was still denied. The rule in 2025Du32673 was a single line with no criteria and no procedure, and the expectation was recognized. No amount of reading the rules explains that difference.

The lower court in 2025Du32673 did reason from the rule. It held that Article 83(2) of the employment rules merely conferred a discretion to rehire rather than imposing an obligation, and that no criteria or procedure for screening had been established.

The Supreme Court read the same clause differently, treating it as having laid down a basis for rehiring retirees on a fixed-term footing. A discretionary provision is still a provision; practice supplies the rest.

What decided the case, in other words, was not the rule but what the company had actually done. And that raises the question of how “what the company had actually done” is to be measured.

4. What is the denominator when a court measures the rehiring rate?

This is the working core of the judgment. The lower court and the Supreme Court looked at the same company over the same period and arrived at different numbers, because they used different denominators.

The lower court’s figure was this.

Of the 38 bus drivers who reached the retirement age in 2021 and 2022, only 18 — approximately 47% — were employed on a fixed-term basis.
— the lower court’s finding (Daejeon High Court, January 9, 2025, 2024Nu11738), as recited in 2025Du32673

Fewer than half. On that figure alone, the company was far from having rehired “without exception.” When the Supreme Court counted the same period, the picture changed completely.

Among the bus drivers who retired in 2021 and 2022 and applied to be rehired on a fixed-term basis, all were rehired without exception apart from the intervenors and one other person, and it appears that the company had never before refused a retiree’s application for rehiring.
— Supreme Court of Korea, August 12, 2026, 2025Du32673

Once the denominator shifted from everyone who reached the retirement age (38) to those who applied for rehiring, a rate of 47% became effectively 100%.

This approach was not invented for the occasion. The leading case, 2018Da275925, already spoke of retirees being rehired “where they wished to be” without exception, and it drew a line between a refusal to rehire and a refusal to renew — rejecting the employer’s claimed instances of refusal because they were in fact non-renewals after rehiring had already occurred.

Read the two cases that denied the expectation and the same lens is at work in reverse. In 2018Du62492 the Court noted that at least eight of 23 employees reaching the retirement age had not concluded fixed-term contracts, while adding that “whether they were not rehired despite wishing to be, and if so what the grounds for refusal were, is not clear from the record.” In 2023Du41727 the identical formula appears as to the employees who were not rehired.

In short, a figure whose underlying intentions are unverified supports neither side. Placed side by side, the three cases look like this.

How sensitive this point is in practice can be seen in the lower courts as well. The Gwangju District Court accepted that a city bus company had “rehired 47% of the employees who reached the retirement age in 2021 and 2022” on a fixed-term basis, yet denied the expectation on the ground that the company did not rehire on the retirement date itself but recruited from among applicants through a separate hiring process, including public notices (Gwangju District Court, May 29, 2025, 2024Gahap54893). The very same 47% was thus assessed in opposite directions by different courts.

Why, then, did the Supreme Court decline to take the “separate hiring process” at face value? That is the subject of the next section.

5. Does a two-month gap before rehiring defeat the expectation?

It did not. The Supreme Court held that where the procedure was a formality, the gap in time that the procedure itself produced cannot defeat the expectation either.

The lower court’s findings were concrete. The drivers who were rehired had applied to a “short-term crew member recruitment notice” and submitted résumés, and were engaged not immediately upon retirement but between 23 and 112 days after the retirement date. The employees in this case, by contrast, went through no such process and filed for unfair dismissal remedies immediately.

The Supreme Court examined what that process actually amounted to.

It appears that the company’s fixed-term hiring drew applications from its own retired bus drivers and from other bus drivers without any distinction of procedure, and that the company hired all of its own retired drivers while hiring only some of the others after screening. Adding that some of the company’s retired drivers did not even submit a new résumé, it is difficult to say that the company required any particular qualification when rehiring retirees on a fixed-term basis; it went through a formal procedure and no more.
— Supreme Court of Korea, August 12, 2026, 2025Du32673

If retirees all passed while outside applicants alone were screened under the same notice, then for the retirees it was not screening at all. That some were hired without submitting a résumé confirms the point.

Once the procedure is characterized as a formality, the assessment of the time gap follows naturally.

It is true that the bus drivers who applied for rehiring were rehired on a fixed-term basis only about 70 days on average after the date they reached the retirement age. However, given that the company did not rehire retirees seamlessly upon retirement but re-engaged them through what was formally a separate application procedure, it is difficult to deny the expectation of fixed-term rehiring by reason of that interval of time.
— Supreme Court of Korea, August 12, 2026, 2025Du32673

One further circumstance proved decisive: what the company itself had said in another case. When a different retired driver from the same company applied for a remedy before the Jeonnam Regional Labor Relations Commission, the company stated:

There is no manual and no application form for fixed-term hiring. If someone wished to work on a fixed-term basis, we told them the documents they needed — résumé, family relation certificate and so on — when they came in or inquired. / As to that person, we acknowledge the expectation of fixed-term rehiring after reaching the retirement age.
— the company’s statements before the Jeonnam Regional Labor Relations Commission, as recited in 2025Du32673

On August 30, 2022 the commission held that the refusal to rehire that person was an unfair dismissal, and the company complied by engaging them on a fixed-term basis on November 1, 2022. Its own conduct in another employee’s case came back to it.

6. If the expectation is recognized, is the refusal automatically unlawful?

No. There is a second gate. The doctrine itself voids only a refusal “without reasonable grounds,” so where reasonable grounds exist the outcome changes.

A lower court case involving a city bus company shows this most clearly. The Seoul Administrative Court recognized the expectation on the following grounds:

• the collective agreement provided that “the fixed-term scheme for those retiring at the retirement age shall be implemented across all companies, while each company shall decide autonomously on the individual fixed-term contract of each retiree,” thereby contemplating the possibility of rehiring;
• the company had rehired 22 of the 27 employees who wished to be rehired on a fixed-term basis after January 1, 2016;
• the company had in fact screened the employee for rehiring as they approached the retirement age; and
• the company had stated during the remedy proceedings that “the opportunity of fixed-term rehiring is afforded to every employee who retires at the retirement age.”

To this point the structure closely tracks 2025Du32673. Yet the outcome was a loss for the employee, because the court found reasonable grounds for the refusal. The basis was a record of seven accidents — including a 2002 collision causing injuries (one person requiring three weeks’ treatment and three requiring two weeks) and a 2006 illegal U-turn causing injury requiring eight weeks’ treatment, for which the company paid KRW 6 million in settlement and issued a written warning (Seoul Administrative Court, October 13, 2022, 2021Guhap81448).

That judgment is final. The appellate court adopted the first instance reasoning on both the expectation and the reasonableness of the refusal and dismissed the appeal (Seoul High Court, August 17, 2023, 2022Nu66738), and the appeal to the Supreme Court was dismissed (Supreme Court of Korea, December 7, 2023, 2023Du52130). It therefore stands as a case in which a finding that recognized the expectation yet upheld the refusal was sustained all the way to the Supreme Court.

The test for reasonable grounds is taken directly from the renewal cases.

Whether there are reasonable grounds is to be determined by reference to whether the grounds and the procedure of the refusal are objective, reasonable and fair in light of ordinary social notions, considering the employer’s business purpose and character, the conditions at the workplace, the circumstances in which the contract was concluded, how the renewal scheme has actually operated, the employee’s position and duties and their fitness to perform them, and whether there are grounds attributable to the employee. The burden of proving those circumstances rests on the employer.
— Supreme Court of Korea, October 31, 2019, 2019Du45647

The last sentence is the important one. It is for the employer to prove that the refusal was justified. That allocation drives the conclusion in the next section.

7. Why did the employer’s silence matter so much?

Because the employer threw away its own opportunity to build a ground for refusal. Where the burden of proof lies with the company and no record was created, any ground advanced later reads as having been constructed after the fact.

The facts are simple. On February 4, 2022 the union wrote to the company requesting an extension of the retirement age, stating that if the extension were refused the employees wished to work on a contract basis, and asking that any refusal to re-contract be notified in writing with reasons. The company gave no answer at all and terminated the employment relationships on the respective retirement dates.

The Supreme Court’s assessment:

In response, the company gave no notice that a recruitment procedure was contemplated or that a résumé had to be submitted, and terminated the employment relationships without any reply, on the ground that the retirement age had been reached. In light of this, it does not appear that the intervenors’ failure to apply through the recruitment procedure was the company’s ground for refusing to rehire, and even if it were, the refusal could not be found reasonable.
— Supreme Court of Korea, August 12, 2026, 2025Du32673

Note the two layers of rejection. First, non-participation in the procedure was not in fact the ground of refusal. Second, even if it had been, a company that never gave notice of the procedure cannot rely on the failure to take part in it.

The Court went on to note the absence of screening and the disparity in treatment: there was no indication that the company had assessed whether the rehiring criteria were met or whether rehiring was warranted, and no special circumstance appeared that would require refusing these employees alone while accepting every other retiree’s application without exception.

One point invites misunderstanding. Silence is not in itself unlawful. The Supreme Court has held that where an employer gives notice of a refusal to renew after a fixed-term contract has ended, Article 27 of the Labor Standards Act — which requires written notice of the grounds for dismissal — does not apply.

Because a fixed-term employment contract terminates of itself upon expiry of the term, the need to make clear the existence, timing and grounds of a refusal to renew is not as great as in the case of dismissal … where an employer gives notice of a refusal to renew after a fixed-term employment contract has ended, Article 27 of the Labor Standards Act does not apply.
— Supreme Court of Korea, October 28, 2021, 2021Du45114

So no freestanding violation of a written-notice duty arises. At the stage of assessing reasonable grounds, however, the position is quite different. With the burden of proof on the employer, the party that kept no record is the party that suffers. Conduct that no statute requires becomes the fact that decides the case.

8. Does the expectation survive the expiry of a collective agreement?

It does, because the expectation is rooted not in the agreement but in the relationship of trust.

The lower court sided with the company here as well. It reasoned that the substance of the union’s letter was a request to extend the retirement age; that this appeared to rest on the 2017 collective agreement, which provided that “a person who has reached the retirement age may have their employment contract extended on a fixed-term basis by labor-management agreement”; and that since that agreement had lapsed on May 19, 2021, the company was under no obligation to accede to a request founded on a lapsed instrument.

The Supreme Court rejected this on two levels.

It is difficult to say that the union requested fixed-term rehiring on the basis of the 2017 collective agreement alone, and the letter did not identify that agreement as its basis. Since the intervenors’ expectation of being rehired on a fixed-term basis after reaching the retirement age rests on the relationship of trust with the company, the mere fact that the 2017 collective agreement had lapsed cannot justify the company’s giving no response whatsoever to the request for fixed-term rehiring.
— Supreme Court of Korea, August 12, 2026, 2025Du32673

As a matter of fact-finding, the letter did not cite the agreement at all; as a matter of doctrine, the expectation is grounded in trust rather than in the agreement. The instrument may lapse, but the practice built up under it does not vanish with it.

There is a counter-example. In the Gwangju case discussed above, the deletion from the 2020 and 2022 collective agreements of a clause in the 2017 agreement — under which the company was to give priority in fixed-term hiring to its own retirees and to maintain that group at about 25 people — was one of the grounds for denying the expectation (Gwangju District Court, May 29, 2025, 2024Gahap54893).

The two results only look contradictory. The difference is whether the practice continued after the clause disappeared. If it did, the lapse is immaterial; if the clause went and the operation shifted to open recruitment, the basis of the trust is gone with it. The test is the actual operation afterward, not the survival of the clause.

9. What decides these cases in practice?

There are two gates, and each looks at something different.

Three facts recur at both gates.

First, how many of those who applied for rehiring were rehired. A rate of 47% against every retiree became effectively total once applicants were the denominator (2025Du32673). Conversely, where it cannot be verified that those who were not rehired had wished to be, the figure will not serve to negate the practice either (2018Du62492; 2023Du41727). Whether there is a procedure for ascertaining and recording retirees’ wishes about rehiring is what separates these cases.

Second, whether the screening was real or formal. Issuing a notice and collecting résumés is not enough. The Supreme Court treated the procedure as a formality because every retiree was hired while only outside applicants were screened, and because some were hired without submitting a résumé. To maintain that screening was real, an employer needs criteria that were actually applied to retirees, and a record of how they were applied.

Third, what was said in reply to the request. The company in this case never answered the union’s written request, and that silence ended up casting doubt on the genuineness of its asserted grounds. That no written-notice duty applies (2021Du45114) and that the absence of a reply carries no cost are entirely different propositions.

It is worth adding that what happens after a retiree has been engaged on a fixed-term basis is governed by a separate doctrine. That is why the two employees in 2018Du62492 fared differently. The one not yet rehired asserted a legitimate expectation of rehiring; the one who had worked on a fixed-term contract and received notice of expiry asserted a legitimate expectation of renewal, and only the latter succeeded. At the renewal stage, the court additionally weighs the degree of decline in the ability to perform the work and in efficiency due to age, the degree of increased risk, the actual pattern of employment of persons past the retirement age at the workplace, and instances in which contracts were renewed.

10. What this means for foreign-invested employers in Incheon and the IFEZ

For companies operating in the Incheon Free Economic Zone (IFEZ) — the Songdo International Business District, Cheongna International City and Yeongjong International City — this line of authority carries a practical warning that is easy to miss.

Foreign-invested employers often assume that because their employment rules grant a discretion (“may rehire”) and impose no obligation, no exposure can arise. 2025Du32673 shows that assumption to be unsafe. The rule in that case was a single discretionary line with no criteria and no procedure, and the expectation was still recognized — on the strength of what the company had done, not what its rules said.

Three points follow for employers here.

Practice accumulates whether or not anyone intends it. Where retirees who ask to stay on are accommodated year after year as a matter of course, a relationship of trust forms even though no document says so. A company that wishes to preserve genuine discretion must be able to show that the discretion was actually exercised — that criteria existed and were applied to retirees, and that the application was recorded.

A position taken in one employee’s case binds the company in the next. The decisive material in 2025Du32673 included the company’s own statements before a regional labor relations commission in a different employee’s case, and its compliance with that commission’s order. Positions taken in individual proceedings should be reviewed for their effect across the workforce.

Answer requests in writing, even where no statute requires it. Article 27 of the Labor Standards Act does not apply to a refusal to renew (2021Du45114), but the burden of proving reasonable grounds rests on the employer (2019Du45647). Where a union or an employee asks for rehiring and for reasons if refused, a written reply setting out the procedure and the grounds is the cheapest evidence an employer will ever create.

Note also that the remedy route runs through the labor relations commissions before it reaches the courts — regional commission, then the National Labor Relations Commission, then an action to revoke the review decision. Several of the cases discussed above were shaped at the commission stage, well before any court saw them.

11. Frequently asked questions

This article sets out general principles drawn from published judgments of the Supreme Court of Korea and the lower courts, together with the statutes in force. Supreme Court of Korea, August 12, 2026, 2025Du32673 reversed the judgment below and remanded the case to the Daejeon High Court, so the final outcome may change on remand. Seoul Administrative Court, October 13, 2022, 2021Guhap81448 became final following dismissal of the appeal and of the appeal to the Supreme Court, whereas the finality of Gwangju District Court, May 29, 2025, 2024Gahap54893 cannot be confirmed from publicly available sources. The outcome of any individual case will depend on the precise wording of the employment rules and collective agreement, how rehiring has actually been operated at the workplace and what record exists of it, and the course of any request for rehiring and the reply to it.

About the Author

Soyoung Park | Representative Attorney

Family Law, Inheritance, Construction & Real Estate Disputes

Judicial Research and Training Institute, 33rd Class

Korea University, Department of Law

Atlas Legal | Songdo, Incheon, South Korea

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