South Korean court recognizes “re-employment expectation” for bus drivers

The Supreme Court of South Korea ruled in favor of bus drivers in Naju who were denied re-employment after retirement, establishing that a “re-employment expectation” can exist even without a formal obligation.

Naju Transportation had a practice of re-hiring retiring drivers as temporary staff. From 2021 to 2022, the company re-hired 18 out of 38 drivers who reached retirement age, almost all those who applied for the positions.

Some drivers who were not re-hired filed complaints with labor committees, arguing the company’s decision was unfair. While lower labor committees sided with the drivers, Naju Transportation filed an administrative lawsuit to overturn those rulings. The first court sided with the drivers, citing company practices and expectations of continued employment, but the second court ruled against them, saying the company only had the option to re-hire, not the obligation.

The Supreme Court overturned the second court’s decision, stating that re-employment expectations should be determined by actual re-hiring practices and trust built between employer and employees, not just the wording of employment rules or collective bargaining agreements. The court emphasized that, prior to 2021, there were no instances of Naju Transportation denying re-employment requests. This history created a reasonable expectation among drivers that they could continue working after retirement if they met certain conditions.