Calculation of the Length of Continuous Employment 
Definition of the length of continuous employment
- The term ‘length ofcontinuous employment’ refers to the duration in which an employee works forone employer without break from the signing date of an employment contract to the expiration date of the same. For a fixed-term employment contract, the employment relationship is in principle terminated on the expiration date (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits,p.38; Administrative Interpretation: Anti-Employment Discrimination Dept. -2457, 12/6/2013, Ministry of Employment and Labor).
- Based on the above definition, the employees, whose length of continuous employment is one year or longer or whoseaverage work hours per week over four (4) weeks are 15 or more, are subject toretirement benefits (Proviso of Article 4(1) of the Act on the Guarantee of Workers’ Retirement Benefits).
Q1. If my employment contract began on January 2 this year and will end on January 1 of next year (which is a holiday), can I still receive retirement benefits?
A1. Under a fixed-term employment contract, if the contract expires on a holiday or a non-business day in this case, January 1 when employees are exempt from their duties, the relationship of employment is considered to continue to be effective on this day. This means that your employment comes to an end only on the following business day; in other words, on January 2. Hence, in this case, your employer is required to pay retirement benefits to you (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, p47).
Q2. Is the period of a leave included in the length of continuous employment?
A2. The ‘length of continuous employment’ means the period during which an employee supplies labor and services to an employer while continuously maintaining the relationship of employment and subordination with this same employer. Therefore, any period of temporary leaves taken under the approval of the employer are included in the length of continuous employment. However, the period of a personal leave for personal reasons such as pursuing a study abroad may or may not be included in the length of continuous employment, depending on the collective agreement or the internal rules of employment in place (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, p57 ).
Q3. Is the period of apprenticeship (internship) included in the length of continuous employment?
A3-1. If during the period of apprenticeship (internship), labor and services were supplied in a relationship of employment and subordination vis-à-vis the employer, this period is also included in the length of continuous employment for the purpose of calculating retirement benefits (Gwangju District Court ruling 4/18/ 2004, case # 2002-ga-dan-1180).
A3-2. When there is a change in the arrangement for supplying labor and services, such as in the case where an apprentice or intern continues to work for the same business by later becoming hired as a full-time employee, the length of continuous employment for the purpose of calculating retirement benefits must include both the period of internship and the period worked as a regular employee (Supreme Court ruling, 7/11/ 1995, case #93-da-26168 ).
Renewal orRepetition of the same employment contract
- In the casewhere the existing employment contract is renewed or repeated on the same date asits expiration date, the renewed or repeated contractual periods shall be addedup to the total length of continuous employment (Supreme Court Decision 93Da26168 Decided July 11, 1995).
- Even though there is a gapin the renewed or repeated contractual periods, the continuity of the employmentrelationship is maintained during the gap period, insofar as the grounds based on which the employee does not work or is not paid wages during the gap period are recognized as reasonable, e.g.,the gap period is not longer relative to the total contractual periods and it resultsfrom seasonal factors or the nature of the employee’s duties like school vacationsor it is given as a stand-by period or for the employee’s refreshment (Supreme Court Decision 2004Da29736 Decided Dec. 7, 2006).
Precedents Related to the Length of Continuous Employment
Calculation of the length of continuous employment for day workers
- The term “day worker’refers to a worker who makes an employment contract on a daily basis so that theemployment relationship is terminated upon the expiration of the dailyemployment contract (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, p. 40).
- For a constructionworker, who virtually falls in the category of a day worker but is hired at a constructionsite without date, the employment relationship is recognized to be continuous to the end of a construction project if the relationship is maintained for a considerable period of time, and continuous supply of labor is expected unless there are specialcircumstances (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, p. 40).
- If the fixed work hours for aweek alternate between more than or equal to 15 hours and less than or equal to15 hours, the period during which the employee worked 15 hours or less isexcluded when calculating the total length of continuous employment based on thedate of retirement (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, p. 41).
- A daily constructionworker is recognized as being in the continuous employment even if he/shemoves around different construction sites, and can be in principle paidretirement benefits when leaving the last construction site if the length ofcontinuous employment is 1 year or longer (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, p. 41).
Calculation of the length of continuous employment in the case of a transfer of business ownership
- “Transfer of business” is defined by transferring personneland physical facilities as the way they are, which were organized as entitiesfor a certain business purpose. In this case, the employment relationship ofthe relevant employees is in principle comprehensively transferred to the purchasercompany and therefore the continuity of the relationship is maintained (Supreme Court Decision 2004Da34790 Decided Feb. 25, 2005)
※ If the facts that theseller company (“Company A”) and the purchaser company (“Company B”) has made animplicit or explicit agreement to transfer and take over the businesstherebetween, and that Company B has agreed to take over the debts, liabilities,payables, etc. of Company A are proved true, and thus, the transfer andtakeover of the business between Companies A and B is established as true, theperiod during which the employees worked for Company A can be added up to thelength of continuous employment with Company B when calculating retirementbenefits (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, p. 51)..
- When an employee of a company selling one of its business divisions to another company had to be severed and then rehired due to the policy of the latter company, as part of a formality, even if the same employee received severance or retirement benefits, this does not end the relationship of employment, as it cannot be construed to mean that he or she had the intention to terminate the relationship of employment. In this case, when the employee retires from or leave the company which acquired the business, he or she must be paid retirement benefits for the length of continuous employment which includes the period during which he or she was an employee of the company who previously owned the business, by subtracting any retirement benefits that were already paid (Supreme Court ruling 2/25/2005, case #2004-da-34790).
Calculating the length of continuous employment for foreign employees who left the country and later returned
- The ‘length of continuous employment’ means the period during which a worker supplies labor or services to the same employer in a relationship of subordination as an employee. Temporary leaves taken under the employer’s approval are included in the length of continuous employment (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, pp48-49).
· If a foreign employee temporarily leaves the country under the approval of the employer and after filing the ‘Reentry for Reemployment Report’ to establish that he or she will be continuously employed by the latter while abroad, and later returns and continues to work for the same employer, the relationship of employment is considered uninterrupted, and the time spent outside the country is included in the length of continuous employment.
· However, in the case of a ‘voluntary departure’ where there is no actual supply of labor, if the employer and the employee agreed that the relationship of employment ends at the time of a voluntary departure and resumes upon the latter’s return to the country, this agreement will be reflected in the determination of the length of continuous employment.
Calculating the length of continuous employment after a change of employment status
- Various different factors must be considered in order to determine the number of years of continuous employment for a person who initially worked as a day worker for a business and later continues to work for the same business as a regular full-time employee or as a technical employee (Ministry of Employment and Labor, Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefits, pp49-50).
· If a worker, in order to get hired as a full-time employee, went through a regular hiring process, for example, by taking a recruitment exam, after he or she voluntarily indicated his or her decision to resign from the position as a day worker and the letter of resignation was officially accepted by the employer, the previous relationship of employment may be considered to have been effectively terminated.
· On the other hand, if the employee was hired through a special recruitment program as a full-time employee or a technical employee while he or she was still employed as a day worker and resigned from the position as a day worker only after the hiring decision became official, this is regarded as a mere change of employment status. Therefore, the relationship of employment is not considered to have been suspended in the transition.
※ For more detailed rules on the calculation of the length of continuous employment for different employment situations, please refer to Questions and Answers on the Act on the Guarantee of Workers’ Retirement Benefitsor contact the Ministry of Employment and Labor (http://www.moel.go.kr, ☏ 1350).