Fixed-Term Worker · 2-Year Limit
Fixed-term Worker
What is a fixed-term worker?
- Two-year limit in principle; exceeding it is deemed an open-ended contract
- A formal gap does not reset the period
- Once a renewal expectation forms, a refusal to renew can be challenged
What the two-year mark really changes is not the contract but the worker’s status itself. A relationship that could be ended with a single expiry notice becomes, past that point, one that cannot be ended without a justified reason and proper procedure. The real force of this provision is that a document the company labels 'end of contract term' is read as a dismissal notice at the Labor Relations Commission. That is why the outcome is decided at expiry management, not at hiring.
Some periods are excluded from the calculation. Typical cases include contracts set for the time needed to complete a project or a specific task, replacing an employee on leave for childbirth, childcare, or illness, workers studying or in vocational training alongside work, and hiring people aged 55 or older. However, an exception does not apply just because it is written into the contract; it is judged by the actual work performed. If someone is hired as a replacement and kept on after the original employee returns, the general rule applies, not the exception, from that point on.
The baseline for management is not the expiry date but the cumulative period of use. Put the first hire date, number of renewals, gaps in between and cumulative months in one table, and the workers about to hit two years show up months ahead. Many people confuse this with the two-year limit on dispatched workers, but dispatch creates a direct-hire obligation for the client company, so the unit of calculation and the party bearing responsibility differ. The point that actually decides conversion is the review three months before expiry, and the evaluation records made then become the only defense later.
The most common misconception is that a few months off resets the clock. Because the focus is on continuity of the work and the reason for the break rather than its length, putting the same person back in the same seat a couple of months later is likely to be aggregated. The same goes for resignation letters: if the company hands over a form and simply collects a signature, it is hard to treat as a voluntary resignation. Add renewal expectation on top, and even a refusal to renew for a worker with under two years can be overturned as unfair dismissal. If a contract was automatically renewed three times and the evaluation process was a formality, the company has to explain why only the fourth is refused. The limit on the employment period and its exceptions may be amended, so check the latest laws and consult a labor specialist.
Hwi KimCEO of HRDIST & talent development systems consultant
Kyungtae KimHR expert · Organizational culture and HR strategy consultantThe Act on the Protection, etc. of Fixed-Term and Part-Time Employees generally limits the employment period of fixed-term workers to two years. If that limit is exceeded, the worker is deemed to have an open-ended contract. The law also sets out separate exceptions.
Company A, a 3PL logistics firm in the Seoul metropolitan area, has 340 employees and KRW 92 billion (≈ US$68,831,400) in annual revenue. It had been hiring warehouse inspection and data-entry staff on six-month fixed-term contracts and renewing them repeatedly. When HR pulled the list, 9 of its 74 fixed-term workers had passed 25 cumulative months. Two of them had already received expiry notices and filed remedy applications with the Labor Relations Commission. (Hypothetical example)
- When the HR head gathered first hire dates and renewal histories into a single spreadsheet, it turned out that 4 people listed as 'new hires' on their contracts were in fact rehires who had returned to the same position after a 45-day gap.
- On the common practice that 'three months off resets the clock,' the advising labor attorney stated flatly that the same seat and the same work counts as continuous service, and HR scrapped its guideline on gaps that same day.
- The head of Management Support decided to convert 6 of the 9 to open-ended contracts. For the 3 hired as parental-leave replacements, the contracts were restructured around the return dates of the employees coming back.
- HR set up an automatic alert 90 days before expiry in the groupware, and changed the approval line so that when a contract is not renewed, the site team leader must personally write three lines of reasons on the evaluation form.
- Of the two remedy applications, one was withdrawn after the worker was converted and the other ended in a settlement. Over the next year, 0 of 74 workers exceeded 24 months, and reviews missed before expiry fell from 11 the previous year to 0.