Supreme Court Rules Workers Have Reasonable Expectation of Reemployment After Retirement

The Supreme Court has ruled that if a company has a practice of reemploying retired workers, employees reaching retirement age may have a reasonable expectation of reemployment.

On September 13, the Supreme Court's second division, led by Justice Eom Sang-pil, overturned a lower court ruling in a case where Najoo Transportation filed a lawsuit against the Central Labor Relations Commission regarding an unfair dismissal ruling. The decision is seen as a significant step against companies that uniformly deny reemployment based on retirement age.

The case began when Najoo Transportation refused to rehire bus drivers who had reached retirement age. The company's employment rules set the retirement age at 61 but allowed for the possibility of hiring retired workers as contract employees if necessary. In practice, most drivers who applied for reemployment after retiring in 2021 and 2022 were rehired unless there were special circumstances.

The drivers whose reemployment was denied filed for relief with the labor commission, which ruled in their favor. Najoo Transportation contested this decision in court, but the rulings in the first and second instances were inconsistent. The first instance recognized the workers' expectation of reemployment based on actual practices, while the second instance sided with the company, citing a reemployment rate of about 47% and procedural requirements for job postings.

However, the Supreme Court reversed the second instance's ruling, siding with the workers. It concluded that a trust relationship had been established between labor and management regarding the possibility of reemployment as temporary workers after retirement. The court noted that, except for a few applicants, all others were rehired, indicating that there was no reasonable basis for denying reemployment. It ordered the lower court to reconsider the case.