An Explanation of Japanese Labor Laws

An Explanation of Japanese Labor Laws

Ⅰ　Labor Contracts

１．Application of Labor Laws and Regulations to Foreign Nationals

As a general rule, Japanese laws concerning labor apply to allemployees in Japan，regardless of nationality. It means that theLabor Standards Act，the Minimum Wages Act, the IndustrialSafety and Health Act, the WorkersAccident CompensationInsurance Act, the Employment Security Act and others apply toforeign workers.
The Labor Standards Law stipulates that an employer shall notengage in discriminatory treatment with respect to wages, workinghours or other working conditions by reason of nationality or otherstatus of any worker. (Article 3, Labor Standards Act, hereafterreferred to as Article XX).

２．The Principles of Labor Contracts

　In the past, there have been many problems such as wages notbeing paid as promised or a penalty being deducted from wages onretirement. To prevent these troubles relating to labor contracts, theLabor Standards Law stipulates the following matters.

(1) Working conditions must be stated clearly

　An employer shall clearly state the working conditions whena labor contract is drawn up. The following matters shall bewritten and handed to an employee.

• ①　the period of the labor contract
• ②　matters related to renewal of fixed-term employment　contracts
• ③　the working place and job duties
• ④　existence of overtime work
• ⑤　the time at which work begins and at which work ends, breaks,days off, and leave
• ⑥　the amount of wages, the methods of computation and payment, the date of closing accounts and of payment
• ⑦　matters pertaining to separation (including reasons for dismissal)

　An employee may immediately cancel his/her labor contract,if the working conditions as clearly stated differ from actual fact(Article 15).
　Therefore, it is advisable for an employee to obtain a written　contract, rather than an oral one. When a contract is made, an　employee must examine the contents of the contract. In cases　where he/she cannot understand the contract written in Japanese,it may be possible to have it translated into his/her own language.It is also desirable to check the details of the rules of　employment which are laid down by the company.

(2) A contract violating the Labor Standards Law is invalid

　A labor contract which does not meet the standards of this law is invalid with respect to such portion. In such a case the sections which are invalid are governed by the standards set forth in the Labor Standards Law (Article 13).

(3) Period of contract

• ①　Labor contracts shall be made for a period of no longer than three years except for those without a definite period.

However, a contract may exceed three years wherein the period for completing a specified project is determined.

• ②　It is also permissible to draw up a contract of up to five years in cases where an employee has highly specialized knowledge/skills, or,employee is aged 60 years or above (Article 14).

　However, an employee with a contract for a defined period of over one year (other than those who were contracted for a specific period to complete certain projects and those who come under item ②) may resign at any time after fulfilling the first contract year, bysubmitting his/her request of leave to the employer (Article 137).

(4) Ban on pre-determined indemnity

　An employer can not make a contract which fixes in advance either a sum payable to the employer for breach of contract or an amount of indemnity for damages (Article 16). For example, matters such as the following can not be fixed in the contract: the amount of damages for breach of contract because an employee quits before his/her contract expiration date; compensation payable to the employer if an employee damages machines, etc.
　 However, an employee may still be under obligation to pay for damages if he/she inflicts a loss on the employer due to intentional act or gross negligence.

(5) Ban on offsets against advances

　An employer should not offset monthly wages against advances of credit made as a condition for work (Article 17).

(6) Ban on compulsory savings

　An employer can not require a contract for compulsory savings. However, it is possible for the employer to take charge of employees’ savings entrusted to the employer by the employees. But the employer should conclude a labor-management agreement with them and submit it to Labor Standards Inspection Office (Article 18). 　

３．Rules of Employment

(1) Rules of employment

　Rules of employment stipulate working conditions and office regulations. Any company which employs ten or more workers on a steady basis must set such rules of employment, and submit them to the Labor Standards Inspection Office (Article 89). A company is also required to make these rules known to the employees (Article 106). It is therefore desirable for employers to do so in a language that their employees understand, if they do not understand Japanese.
　Rules of employment shall not infringe any law or collective agreement. A labor contract, in which the working conditions are inferior to the rules of employment standards, shall be invalid. In such a case, the parts of the contract which are invalid shall be governed by the standards stipulated in the rules of employment (Article 92 of the Labor Standards Act , Article 12 of the Labor Contract Act ).

(2) Items of rules of employment

　The following items must be stated in the rules of employment;

• ①　Matters pertaining to the time at which work begins and at which work ends, breaks, days off and leave, and matters pertaining to the change in shifts,
• ②　Matters pertaining to the methods of determination, computation and payment of wages (excluding extraordinary wages), the date of closing accounts and of payment and increases in wages,
• ③　Matters pertaining to retirement (including reasons for dismissal).

　By contrast, the conditionally required matters pertaining to rules set forth at the workplace include:

• i) retirement allowances
• ii) bonuses
• iii) safety and health
• iv) workers’ cost for food, etc. (in the event that there are stipulations for having employees bear the cost of food and other such expenses)

４．Employment of Older Persons

(1) Requirement to adopt measures to secure employment of older persons

　All employers, currently setting the retirement age at 64 or younger, are required to adopt one of the following measures in order to secure employment for all who wish to work to age 65.

• ① Raising the retirement age
• ② Offering continuous employment to staff of retiring age (A provisional measure effective until March 31, 2025 may be in place in cases an employer had set certain criteria in the labor-management agreement, by March 31, 2013, to limit staff subject to continuous employment.)
• ③ Abolishing the retirement age

Ⅱ　Wages

１．Principles of Payment of Wages

　In the Labor Standards Law, “wage” means the wage, salary, allowance，bonus and every other payment to the employee from the employer as remuneration for labor, regardless of the name by which such payment may be called (Article 11).
　In concluding a labor contract, the employer is required to provide the employees with written details of wages. (Article 15).
　The Law also stipulates the principle of payment of wages in order to ensure that the wages are handed to the employee as follows (Article 24);

• ① Wages must be paid in cash except in cases provided for by law or ordinance, or by collective agreement
• ② Wages must be paid directly to the employees themselves
• ③ Wages must be paid in full. Partial deduction may not be permitted with the exception of taxes, social insurance premiums and others according to the written agreement
• ④ Wages must be paid at least once a month on a definite date,except extraordinary wages such as a bonus, etc.

２．Guarantee of Wages and Minimum Wages

　As wages are the most important matter for employees’ life, the Labor Standards Law stipulates guaranteed payment as follows;

• ① In the event of suspension of business for reasons attributable to the employer, the employer should pay an allowance equal to or more than 60% of the employee’s average wage(Article 26)
• ② With respect to employees employed under a piece-work system or other sub-contracting system, the employer should guarantee wages at a fixed amount proportionate to hours of work (Article 27).
• ③ In the event an employee requests the payment of wages to cover emergency expenses for illness, accident or other emergency circumstances, an employer should pay accrued wages prior to the normal pay day (Article 25).
• ④ No employer can hire an employee for less than the legal minimum wage (Article 28, Minimum Wage Act). The minimum hourly wage is set by region and that for Tokyo is ￥1013 as of Oct. 1, 2019. Higher rates are set for certain industries by region as well.
• ⑤ Claims for wages, accident compensation and other claims will lapse if not made within 2 years; and claims for retirement allowances will lapse if not made within 5 years (Article 115).

３．Decreases in Wages as Sanctions

　A company may “decrease wages as a sanction,” in order to maintain discipline at the firm. This is different from deducting wages which amount is according to the hours of lateness or absence. The company should state the details about decreases as sanctions in the rules of employment.
　In the event the rules of employment provide for a decrease in wages as a sanction, ①the amount of a decrease for a single deduction shall not exceed 50% of the daily average wage, and ② the total amount of decrease shall not exceed 10% of the total wages for a single pay period (Article 91).

４．If a Company Goes Bankrupt and Wages Haven't Been Paid

In an event that a company goes bankrupt and it fails to pay wage to its employees, there is the system in which the government advances the employees’ wage on behalf of the company. This is based on the Security of Wage Payment Law ("CHINKAKU-HO”).

(1) Person eligible to receive replacement payment

• ① When a company which has been engaged in business activities for a year or more goes bankrupt, and its employee has been laid off from the company without being paid, one is eligible for reimbursement of unpaid wages. However, this system is not applicable to an employee whose total amount of unpaid wage is less than ¥20,000.
• ② Employees who have retired from the company on a day within a period from 6 months before the bankruptcy to 2 years thereafter as counted from the day when bankruptcy was filed with the court, or the day for application as a bankruptcy in fact to the Labor Standards Inspection Office (in the case of “de facto bankruptcy”).

　“De facto bankruptcy” is only applicable to small and medium-sized companies, wherein the Labor Standards Inspection Office recognizes that a business has become defunct with no chance of reestablishment and is unable to pay wages, even though bankruptcy has not yet been filed.

(2) Unpaid wages subject to replacement payment

• ① Subject to replacement payment is the unpaid sum of the regular wages and the retirement allowance which should be paid during the period from the date 6 months before the resignation to the day before the claim date. Extraordinary wages or discharge notice allowance shall not be subject to the payment.
• ② The limit of replacement payment is 80% of the unpaidwages and the ceiling is shown in the following table:

Please contact the Labor Standards Inspection Office on procedures regarding payments made on behalf of failed companies.

５．Annual Salary System

　The annual salary system is the pay system in which a company decides the annual lump payment of its employee(s) by evaluating as a whole the ability, work achievements, potential, and so on, of the subject employee.
　Companies are also to pay overtime pay to employees in this system. Even if a given amount of overtime pay is already included in an annual salary, unless the breakdown of that salary is stated (e.g. annual salary of X yen; extra pay of X yen, etc.), an employer is obliged to remunerate overtime work separately. Also, if an employee has worked more hours than pre-designated, the employer must compensate the difference.

Ⅲ　Working Hours, Holidays and Annual Leave

1．Legal Working Hours and Holidays

Legal working hours per week are 40 hours. The Labor Standards Law stipulates that an employer shall not make an employee work more than 8 hours per day/40 hours per week. The fixed working hours of each firm shall not be longer than the legal hours (Article 32).
　However, as an exception, working up to 44 hours a week is allowed for companies with less than 10 employees in the industries of commerce, cinema/theater, health care and service/entertainment.
　Several kinds of modified working hours systems which can accommodate working hours to business fluctuations are also allowed under specified conditions. (For instance; one month unit modified working hours system, one year unit modified working hours system, and a flex-time system.)
　With regard to holidays, Labor Standards Law stipulates that an employer shall provide employees with at least one holiday per week. Otherwise, an employer can provide at least 4 holidays during a four-week period (Article 35).
　With regard to work breaks, the law stipulates that an employer shall provide the employees with at least 45 minutes of break time for a work day of over 6 hours, and one hour of break time for a work day of over 8 hours (Article 34).

２．Overtime Work and Work on Holidays

　So-called “36 agreement”（a written agreement about overtime work and work on holidays) should be concluded between an employer and employees and submitted to the Labor Standards Inspection Office, when the employer wants to extend working hours or have an employee work on holidays. The employer should pay increased wages for such work (Articles 36 and 37).
　The rate of premium for overtime work and late-night work (defined as work between 10pｍ and 5am) is 25% or more and it is 35% or more for work on a statutory holiday.
　An employee must be paid time and a half or more for any hours worked over 60 in a month (Section 1 of Article 37). (Not applied to small and medium-sized enterprises for the time being (Article 138).)
　In cases where the company is under the modified working hours system, an employer is not under obligation to pay increased wages for overtime work if average working hours per week during the period stipulated by the pertinent system do not exceed the legal working hours.
　If you do not understand the method of calculation of hours and pay, you should ask your company.

３．Annual Paid Leave

　The Labor Standards Law stipulates the annual paid leave system so that employees may take leave at any time and enjoy a pleasant life.
　“An employer shall grant annual paid leave of 10 working days, either consecutive or divided up into portions, to an employee who has been employed continuously for 6 months calculated from the day of hiring and who has reported for work on at least 80％of the total working days” (Article 39).
　Part-timers can also take annual paid leave depending on the number of their working days, even if their fixed working days are relatively few. Even though the contract period of employment is for one month or 3 months, if employees have worked for more than 6 months as a result of renewal of contacts, they may take annual paid leave.
　The number of paid holidays is as follows:

　An employee may request paid leave anytime but may be asked by his or her employer to change the date(s) of the leave if his or her absence in the requested period would interfere with the normal operation of the enterprise.
　Paid holidays can be taken within 2 years from when it was allowed, but an employee can not take it after the day of his/her resignation.
　An employee may be granted paid leave by the hour for up to a maximum of 5 days out of the employee’s total number of annual paid leave, when there is already a labor-management agreement allowing the employees to take paid leave by the hour and it is requested by an employee.
○ Preplanned Grant of Annual Paid Leave
　An employer may introduce a preplanned annual paid leave system when there is a rule set regarding the appropriate time of granting paid leave stated in the labor-management agreement. However, the system can be applicable only to the portion exceeding 5 days of paid leave allocated to each employee.

４．Child Care-Related Rules

(1) Maternity Leave and Child Care Hours

　Expectant female employees can take 6 weeks (14 weeks for twins or more) of maternity leave before child birth and 8 weeks after giving birth (Article 65). Female employees who are nursing an infant of up to 12 months are also entitled to take nursing time twice a day, each for at least 30 minutes aside the legally allowed break times. They can take nursing time by showing up 30 minutes late or leaving work 30 minutes early, or take 60 minutes off at one time (Article 67).
　Maternity leave may be paid or unpaid as there are no laws and companies set their own policies. For those who are not paid by their companies, however, a maternity allowance equal to approximately two-thirds of their pre-maternity wages is paid by the health insurance system during the leave (refer to “Health Insurance Benefits” on P108 for maternity-related allowances).
　In addition, it is prohibited for an employer to dismiss an employee or force an employee to accept change in employment contract details based on an employee’s pregnancy, childbirth or taking of maternity leave. Dismissal of a female employee during her pregnancy or within one year from childbirth is invalid unless the employer proves that the dismissal is not based on fact that the employee became pregnant, gave birth or took maternity leave (Article 9, Equal Employment Opportunity Act for Men and Women).

(2) Child care leave

　Child care leave allows an employee, either male or female, to take off up to one year to look after an infant under one year of age. If both parents decide to take a leave, up to one year for each parent is allowed until the child is 14 months old (“Additional Leave for Mom & Dad”; Section 2 of Article 9, Child Care and Family Care Leave Act). In special situations, such as when a child is on a wait list to enroll in a daycare center, the leave may be extended until the child is 18 months old. (Section 3 of Articles 5, Child Care and Family Care Leave Act)
　An employee on a fixed-term contract is eligible for child care leave if he or she had been continuously employed for a period of one year or more prior to taking the leave and it is not apparent that the employment contract will expire by the time the child becomes 1 year and 6 months old. (Article 5 Paragraph 1, Child Care and Family Care Leave Act)
　An employee receives 40% (50% for the time being ※67% for the first 6 months of leave) of the wages (daily wage at the start of leave multiplied by 30 days) as child care leave benefits when certain conditions are met.
　An employee on maternity leave and childcare leave may be exempted from social insurance premiums by applying to Japan Pension Office while on each leave.

(3) Short working hour system

　An employer is required to offer short working hour system for child care to those employees with a child below three years of age. Employees hired by the day and employees whose prescribed working hours are 6 hours and under are excluded, however. In addition, the following employees may be excluded if prescribed in the labor-management agreement: employees with less than one year of service; employees with prescribed working days per week of 2 days or less; employees with duties that are difficult to execute with shorter hours due to the nature or implementation structure of the duties. (Article 23 Paragraph 1, Child Care and Family Care Leave Act)

(4) Restrictions on overtime work

　An employer is not allowed to make an employee with a child under three years of age work overtime unless the enterprise's normal operations would be impaired. Employees hired by the day are excluded. In addition, employees with less than one year of service and employees with prescribed working days per week of 2 days or less may be excluded if prescribed in the labor-management agreement. (Article 16-8 Paragraph 1, Child Care and Family Care Leave Act)

(5) Limit on work in excess of statutory working hours

　An employee with a child below school age may make a request to his or her employer to be exempt from overtime work in excess of 24 hours in a month and 150 hours in a year, unless the enterprise's normal operations would be impaired.Employees hired by the day, employees with less than one year of service, and employees with prescribed working days per week of 2 days or less cannot claim such exemptions, however. (Article 17 Paragraph 1, Child Care and Family Care Leave Act)

(6) Sick/Injured child care leave

　Sick/injured child care leave allows an employee to take days off (up to 5 days per year if one child and 10 days for two or more children) to look after a child below school age in the event of injury or sickness (Section 2 of Article 16, Child Care and Family Care Leave Act) . Beginning January 1, 2017, an employee has the additional option of taking half days off.
　As no law articulates guidelines with reference to payment during the leave period, companies should make clear their policy on such allowances offered or not, in some form such as in their rules of employment.

５．Family Care-Related Rules

(1) Family care leave

　Employees who take care of a family member requiring full-time care are entitled to family care leave. The leave can be taken up to 93 days in total per covered family member. These days can be split into a maximum of three separate periods of leave. Employees on a fixed-term employment contract, who have been continuously employed for one straight year or more, are eligible for family care leave if it is not apparent that the labor contract will expire by six months after the date falling 93 days after the date on which the employee began to take family care leave. (Article 11 Paragraph 1, Child Care and Family Care Leave Act)
　As no law articulates guidelines with reference to payment during the leave period, companies should make clear their policy on such allowances offered or not, in some form such as in their rules of employment.
　During family care leave, an employee can receive about 67% of the wages as the benefits from the Employment Insurance if he/she fulfills certain conditions.

(2) Restrictions on overtime work

　An employer is not allowed to make an employee who is providing nursing care to a family member in need of said care work overtime unless the enterprise's normal operations would be impaired. Employees hired by the day are excluded. In addition, employees with less than one year of service and employees with prescribed working days per week of two days or fewer may be excluded if prescribed in the labor-management agreement. (Article 16-9 Paragraph 1, Child Care and Family Care Leave Act)

(3) Limit on work in excess of statutory working hours

　An employee who is providing nursing care to a family member in need of said care may make a request to his or her employer to be exempt from overtime work in excess of 24 hours in a month and 150 hours in a year, unless the enterprise's normal operations would be impaired. Employees hired by the day, employees with less than one year of service, and employees with prescribed working days per week of 2 days or less cannot claim such exemptions, however. (Article 18, Child Care and Family Care Leave Act)

(4) Short-hour working system

　In the case of employees providing nursing care to family members in need of said care,employers are obligated to create a system—separate from family care leave—for reduced working hours that is available to such employees at least twice during a period of 3 or more years, such period starting on the date on which the employee first uses family care leave.
　Day labor may be excluded in such circumstances. Also, by the labor-management agreement, those with less than one year of employment or those with two or fewer regular work days per week, are excluded.(Article 23 Paragraph 3 Child Care and Family Care Leave Act)

(5) Nursing care leave

An employee with one or more family member(s) in need of nursing care may take nursing leave of up to 5 days, if with one such family member, and 10 days, if with two or more such family members, per year upon request to his or her employer.
　Beginning on January 1, 2017, an employee has the additional option of taking half days off .(Article 16-5 Child Care and Family Care Leave Act)
　As no law articulates guidelines with reference to payment during the leave period, companies should make clear their policy on such allowances offered or not, in some form such as in their rules of employment.

(6) Prohibition of disadvantageous treatment and preventive measures against harassment

　Employers are prohibited from using an employee's use of childcare leave, family care leave or other such systems as a reason for dismissal or other disadvantageous treatment of said employee (Article10 Child Care and Family Care Leave Act).
　An employer is under obligation to take the necessary administrative measures so that use of childcare leave, family care leave or other such systems does not disturb the workplace environment (Article 25 Child Care and Family Care Leave Act).

Ⅳ　Resignation and Dismissal

１．Resignation

　Individuals are guaranteed freedom in choice of their employment and are, therefore, free to resign from their employment anytime. An employee should, however, follow specified procedures when he or she chooses to leave a job. The procedures for employees on a fixed-term contract are different from those for employees without a fixed-term contract.

(1) Contracts for a specified period

　In cases where an employee is contracted to work for a specified period of time, he/she should resign when the period of contract expires and the contract of employment will be terminated.
　Resignation during the specified contract period is not allowed in principle without any proper, unavoidable reason (Article 628, Civil Law). In cases where the contract prescribes regulations concerning resignation, the employee should follow these. It is possible that compensation for damages due to non-performance of obligation may be claimed by the company. An example would be in a case where an employee suddenly quits, regardless of regulations concerning advance notice in the contract, and the company is damaged by his/her early resignation. (For an employee with a contract for a specified period of over one year, please refer to P22.)
　Some employers include an article imposing the payment of fines for the breaching of a contract, such as resigning in the middle of a contract period given in the employment contract.
　However, such a contract is invalid, because it goes against Article 16 of the Labor Standards Law which stipulates a ban on predetermined indemnity (refer to “The Principles of Labor Contracts”).

(2) Contracts without a fixed period of employment

An employment contract is terminated with two weeks’ notice for an employee without a fixed-term contract unless provided otherwise in working regulations. However, an employee on monthly salary needs to give notice in the first half of a salary period to resign at the beginning of the next salary period (Article 627, Civil Law).
　It is advisable to speak with the company in advance in order to effect a smooth handing over of duties on resignation.

２．Dismissal

　Dismissal is when an employer unilaterally terminates his/her employee’s employment contract. In accordance with Civil Law, an employer as one party of an employment contract has a right to propose to terminate it. However, as dismissal affects an employee’s life, Japanese labor laws impose severe restrictions on dismissal.
　Laws prohibit dismissal in the following situations or for the reasons:

• ①　An employer shall not dismiss an employee during a period of absence from work for medical treatment with respect to injuries or illnesses in the course of employment nor within 30 days thereafter, and shall not dismiss a female employee during a period of absence from work before and after childbirth nor within 30 days thereafter (Article 19, Labor Standards Act).
• ②　An employer shall not dismiss an employee by reason of such employee’s having reported a violation of the Labor Standards Law to the relevant supervisory agency (Section 2 of Article 104, Labor Standards Act).
• ③　An employer shall not dismiss an employee by reason of the employee’s gender (Article 6, Equal Employment Opportunity Act).
• ④　An employer shall not dismiss a female employee for marriage, pregnancy, or requesting maternity leave (Article 9,Equal Employment Opportunity Act).
• ⑤　An employer shall not dismiss an employee for having tried to organize a labor union (Article 7, Labor Union Act).
• ⑥　An employer shall not dismiss an employee for whistle blowing (Article 3, Whistle-Blower Protection Act).

　“A dismissal shall, if it lacks objectively reasonable grounds and is not considered to be appropriate in general societal terms, be treated as an abuse of right and be invalid (Article 16, Labor Contract Act)”. This is known as the “doctrine of abuse of right of dismissal” and restricts employers’ right of dismissal.
　A dismissal of an employee, even if he or she is at no fault, is valid in certain cases, however.

• (1) When the continuance of the enterprise has been made impossible by natural disasters or other inevitable causes, such as a major earthquake or an eruption, and the dismissal is approved by the Head of Labor Standards Inspection Office.
• (2) When an employee who has received medical treatment compensation for an accident while on duty is paid compensation for discontinuance (Article 81, Labor Standards Act).
• (3) It is established based on the precedents that any dismissals for the purpose of reorganizations need to meet the following conditions.
• ① the reduction in personnel is necessary for the company’s existence and maintenance.
• ② the company has made efforts to avoid dismissals by not hiring new employees or by encouraging early retirement.
• ③ the criteria for reduction must be objective, rational, and fair, and the selection process (of persons to be dismissed) must be fair.
• ④ the company has also made efforts to explain to the employees’ satisfaction the rationale of staff reductions and the necessity of dismissal.

　According to Labor Standards Act, the following standards should apply when an employer dismisses his/her employee:

• ① An employer should provide at least 30 day advance notice if he/she wishes to dismiss an employee. If an employer fails to do so, he/she must pay the average wage for a period of not less than 30 days in lieu of advance notice of dismissal. The number of days of advance notice may be reduced by the number of days for which the employer pays average wages (Article 20, Labor Standards Act). 　Even an employee in a probationary period shall be given advance notice as mentioned above, when he/she has been employed consecutively for more than 14 days (Article 21,Labor Standards Act).
• ② Exceptional cases are: (1) if continuance of the enterprise has been made impossible by a natural disaster or other unavoidable cause (excluding failure to pay tax or financial difficulties), (2) when the reason is attributable for an employee, and an employer applies and obtains an approval of the head of Labor Inspection Office for an exception of dismissal notice. In this case, the employer is able to dismiss the employee without notice or compensatory payment (Article 20, Labor Standards Act).Employees have the right to request a written certification of reasons for their dismissal (Section 2 of Article 22, Labor Standards Act).

３．Dismissal and Termination of Consecutive Employment (rejection of contract renewal) in Case of Workers Hired for a Fixed Period

(1) Dismissal during the contract term

　An employer is not allowed to dismiss employees with a fixed period of contract before the contract expires, except for in cases with an unavoidable reason (Section 1 of Article 17, Labor Contract Act), or when a company goes bankrupt (Article 631, Civil Law).

(2) Termination of consecutive employment in case of workers hired for a fixed period

　In case of an employment contract with a fixed period,termination comes with its expiry. However, the so-called “termination of consecutive employment” has become a serious problem. This is where a contract with a specified period has been renewed several times and a company has continued to employ an employee for a certain period, only to suddenly terminate the contract (upon its expiration) and displace him/her.
　To avoid trouble associated with termination of contract, a ministry notification sets the following requirements for employers.

• ① Employers to give at least 30 days prior notice when terminating contracts for fixed-term employees who have either had their contract renewed three or more times or been employed for over a year.
• ② When employees request a clear statement on the reason(s) for the termination of their employment, employers must comply promptly in writing.
• ③ When a fixed-term contract employee, who has already been employed for over one year through contract renewal, arrives at a new contract term, the employer must make an effort to extend the contract period as much as possible, according to the substantiality of the contract and employees’ wishes.

　In addition, when a fixed-term employment contract is virtually the same as a contract without a definite period due to repeated contract renewal, as well as when continuous employment upon expiration of a fixed-term employment contract is rationally expected, it is deemed that the fixed-term employment contract is renewed unless termination of consecutive employment is objectively reasonable and appropriate under normal social conventions. (Article 19 of the Labor Contract Act)

(3) Conversion into contracts without a definite period

　When an employee with a fixed period of contract effective April 1, 2013 or thereafter has been employed for over 5 years *1 through contract renewal and requests to be employed under a contract without a definite period, it is deemed that his or her employer accepts the request. (Article 18 of the Labor Contract Act)

　However, fixed-term employees are not entitled the aformentioned right to request conversion of their contracts during the following periods if their employers are authorized by the Minister of Health, Welfare and Labor:

• until designated tasks are completed for those involved in tasks expected to be completed within a certain period of time exceeding 5 years (maximum of 10 years)
• during the contract period for retired employees hired under fixed-term contracts

Ⅴ Equal Employment Opportunity Act for Men and Women

　Equal Employment Opportunity Act for Men and Women is designed to create an employment environment in which employees are not discriminated based on gender and female employees can exercise their abilities with due respect for maternity, and the law sets the following stipulations.

1 Prohibition of Discrimination Based on Gender

　Employers shall not discriminate employees based on gender with regard to the following matters(1)～(5) (Articles 5 and 6, Equal Employment Opportunity Act for Men and Women).

• (1) Provision of equal opportunity with regard to recruitment and employment
• (2) Prohibition of discrimination on assignment, promotion, demotion and training
• (3) Prohibition of discrimination on fringe benefits
• (4) Prohibition of discrimination on change in job type and employment system
• (5) Prohibition of discrimination on encouragement to retire, mandatory retirement, dismissal and renewal of an employment contract

２．Prohibition of Indirect Discrimination

　“Indirect discrimination” is when an employer takes measures which ①apply a criterion other than the person’s gender and ②place an employee belonging to one particular gender group at a considerable degree of disadvantage compared to a peer(s) of the other gender group ③ without a legitimate reason.
　As the following (1)～(3) could be deemed discriminatory based on gender in effect, employers shall not take these measures unless they are especially crucial in conducting business（. Article 7, Equal Employment Opportunity Act for Men and Women)

• (1) Establishing requirements on height, weight or physical strength when recruiting or employing workers.
• (2) Establishing the requirement of accepting job transfers involving a move for those on the main career track when recruiting or employing workers in a dual career system of a company.
• (3) Establishing the requirement of job transfer experience for promoting employees. (Article 2, Ordinance of Enforcement of the Equal Employment Opportunity Act for Men and Women)

３．Special Provisions of Measures Pertaining to Female Employees

　It is not against the Equal Employment Opportunity Act for Men and Women when female employees are given favorable conditions in order to eliminate existing disparities between male
and female employees (Article 8, Equal Employment Opportunity Act for Men and Women)

４．Prohibition of Disadvantageous Treatment for Reasons of Marriage, Pregnancy, Childbirth, etc.

　An employer shall not stipulate marriage, pregnancy or childbirth as a reason for retirement, dismissal or mistreatment of a female employee (Article 9, Equal Employment Opportunity Act for Men and Women).
　In addition, an employer is under obligation to take the necessary administrative measures so that a female employee's pregnancy or childbirth does not disturb said employee's workplace environment (Article 11-2 Equal Employment Opportunity Act for Men and Women).

５．Employment Management Measures Concerning Problems Caused by Sexual Harassment

　There are two types in sexual harassment in the workplace. One is compensational sexual harassment and the other is environmental sexual harassment. Compensational sexual harassment is when an employee is inflicted disadvantageously in his/her working condition with response to sexual language and behavior of others in the workplace. Environmental sexual harassment is when that sexual language and behavior disturbs the environment of that workplace.
　Employers shall establish necessary measures in terms of employment management in order to prevent sexual harassment, including sexual harassment against male employees, in a workplace (Article 11, Equal Employment Opportunity Act for Men and Women).

６．Measures Concerning Health Care during Pregnancy and after Childbirth

　Employers shall secure the necessary time off so that female workers they employ may receive the health guidance and medical examinations prescribed in the Maternal and Child Health Act. Moreover, employers shall take necessary measures, such as change of working hours and reduction of work, in order to enable the female workers they employ to comply with the directions
they receive based on aforementioned health guidance and medical examinations (Articles 12 and 13, Equal Employment Opportunity Act for Men and Women).

７．Insurance of Effectiveness

　The Minister of Health, Labor and Welfare and the directors of Prefectural Labor Bureau, when they find it necessary with regard to the enforcement of the Equal Employment Opportunity Act for Men and Women, may request reports and give employers advice, guidance and recommendations, and if an employer has not complied with the law, they may make a public announcement of such violation.
　Any employer who has not made a report required or who has made a false report shall be liable to an administrative fine of not more than ¥200,000 (Articles 29, 30 and 33, Equal Employment Opportunity Act for Men and Women).

Ⅵ Workplace Bullying and Harassment

１．Power Harassment

　The “Working Group for The Roundtable Conference Regarding Workplace Bullying and Harassment” of the Ministry of Health, Labor and Welfare compiled a report on workplace bullying and harassment. The report defines workplace power harassment as any kind of behavior in which a person abuses his or her position in the workplace, such as his or her job position or personal relationship, to inflict emotional distress or physical pain to a co-worker (or co-workers) or cause the deterioration of the workplace environment beyond the appropriate scope of business. What is considered workplace power harassment includes but is not limited to:

• ① Physical abuse (assault, inflicting bodily injury)
• ② Mental abuse (intimidation, defamation, insult, abusive language)
• ③Segregation from personal relationships (isolation, ostracization,neglect)
• ④ Imposition (imposing tasks that are obviously unnecessary or impossible assignment)
• ⑤ Too little demand (not giving any work)
• ⑥ Invasions of privacy (intrusion into private affairs)

２．Liabilities of assailant and employer

The assailant may be held liable for damages in tort. The employer may also be held liable if damages are caused based on the will of the employer. The employer may be held liable for breach of obligations to maintain safe workplace environment even if the bullying and harassment have taken place irrespective of his or her wishes.

*1:10 years for teaching staff, researchers, engineers, research administrators at universities and other research and development organizations （as well as researchers in the private sector involved in joint research with universities and other research and development organizations）