Must-read if you are wondering how to review an employment contract and respond effectively
Why an employment contract is not a mere “formality,” but a risk-management document
Employment contracts are often treated as formal documents used simply to complete the hiring process. In reality, however, a significant number of labor disputes originate from the wording of the contract itself.
In many cases, contracts are formally executed but contain provisions that fail to meet the standards set by the Labor Standards Act and other relevant laws, or they repeatedly use clauses where the actual working conditions differ from those stated in the contract.
In practice, once a dispute arises, the rights and obligations of the parties—and the scope of liability—are determined based on the working conditions specified in the employment contract.
For this reason, reviewing an employment contract should not be viewed as damage control after a problem occurs, but as a preventive measure designed to block disputes from arising in the first place.
This process is not a simple document check; it is the starting point for managing legal risks that may persist for years.
Key clauses that most frequently cause problems in employment contracts
Clauses that lead to disputes tend to follow consistent patterns.
If the structure of wages is unclear—such as the distinction between base salary, bonuses, and various allowances (overtime, night work, holiday work, etc.)—disputes often arise during the calculation of ordinary wages, average wages, and retirement benefits (Labor Standards Act Article 2(1)5 and 6).
Dispute risk also increases when provisions regarding prescribed working hours, overtime, night work, and holiday work are drafted in broad or vague terms rather than with sufficient specificity.
In particular, comprehensive wage systems (fixed overtime pay systems) are frequently applied in form only, without satisfying the required conditions—such as difficulty in calculating actual working hours—resulting in especially high legal risk (see Supreme Court Decision, May 20, 2010, 2008Da6052, among others).
Issues also commonly arise where the title of a worker—such as fixed-term employee or freelancer—does not match the actual nature of the work performed, leading to disputes over employee status. Likewise, unclear standards for contract expiration, termination, or renewal repeatedly become sources of conflict (Act on the Protection of Fixed-Term and Part-Time Employees, Article 2(1)).
Ultimately, the core issue is not whether a clause exists, but how it is drafted, which is precisely why a proper employment contract review is necessary.
When is an employment contract review necessary?
The most effective time is before entering into the contract, specifically just prior to signing.
Review is also critical when a contract is renewed, working conditions are changed, or personnel and compensation systems are restructured. It is likewise necessary when discrepancies emerge between the terms stated in the contract and how they are actually implemented—particularly with respect to wages, retirement benefits, and working hours—or when early signs of dispute appear.
Conducting an employment contract review in advance, rather than after a dispute has already arisen, can significantly reduce legal costs and risks.
For those who feel uncertain or anxious due to legal ambiguity surrounding their employment contract, it is important to understand that professional review at an early stage can decisively influence the outcome of any future dispute.
Conversely, delaying proper review and response may expand the scope of legal liability or make dispute resolution more difficult, requiring a cautious and proactive approach.
Decent Law Office’s approach to employment contract review
Decent Law Office does not stop at refining wording.
Each clause is analyzed for risk based on real labor disputes and judicial precedents, with a focus on structural vulnerabilities that could lead to conflict.
Furthermore, the firm considers response strategies that can be immediately implemented should a dispute arise in the future.
Through this approach, employment contract review becomes not a one-time procedure, but an ongoing risk-management tool.
An employment contract is not a document to consult after a dispute occurs—it is a document designed to prevent disputes from occurring at all.
With Decent Law Office, a single employment contract review can reduce long-term accumulated legal risks, and that choice ultimately protects both the organization and the individual.
