FTC regulated: Yes

Valid reasons for FTC use: no limitation

Remarks

An FTC can be concluded for less than 3 years without objective reasons.
An FTC can be however concluded for a maximum duration of five years only in the following cases: 1) if the employee is highly specialized or 2) if aged 60 years or older (art. 14, LSA).
It is worth highlighting than the dismissal a fixed-term employee before the expiry of the term, unless "there are unavoidable circumstances" (art. 17(1) Labour Contract Law (2007).

Maximum number of successive FTCs: no limitation

Remarks

No statutory limitation on the maximum number of successive FTC. However art. 17 (2) of the Labour Contract Act (2007) which codifies existing case law states that "With regard to a fixed-term labour contract, an employer shall give consideration to not renewing such labour contract repeatedly as a result of prescribing a term that is shorter than necessary in light of the purpose of employing the worker based on such labour contract."

Maximum cumulative duration of successive FTCs: no limitation

Remarks

Although the legislation places limits on the duration of a single fixed-term contract, maximum duration of FTC is not subject to statutory limitations.
An employment contract cannot be concluded for a term exceeding three years, exception made for the contracts concluded for completion of a specified project. The maximum duration of five years is authorized for the contracts of employment of highly specialized employees and those aged 60 years or older (sec. 14, LSA).

As for successive renewals, art. 17 (2) of the Labour Contract Act (2007) which codifies existing case law states that "With regard to a fixed-term labour contract, an employer shall give consideration to not renewing such labour contract repeatedly as a result of prescribing a term that is shorter than necessary in light of the purpose of employing the worker based on such labour contract."

% of workforce under FTC: 13.7

Remarks

Source: OECD statistics database - Incidence of permanent employment, share of temporary workers. Data for 2009.
Temporary worker are those "Workers whose main job is a fixed-term contract lasting not more than one year, occasional, casual or seasonal work, daily workers, or work lasting less than 12 months".

Maximum probationary (trial) period (in months):

Remarks

Probationary periods are also frequently used in practice. There is no statutory provision on it, exception made for the requirement put on the employer to give the employee a 30 days' notice after the first 14 days of the probationary period (sec. 21(4), LSA). Under the Japanese case law, the employer's freedom to dismiss an employee during the probationary period is broader than an ordinary dismissal. "However, the exercise of the reserved cancellation right of the employer should be permitted only when, viewed in the light of the aims and objectives in reserving a cancellation right, there is an objective reason and the exercise is permissible with regards to the common sense of society"
(See: The Mitsubishi Jushi Case, Supreme Court (1973), SMS, Vol. 27, No. 11, p. 1536 as cited in Tadashi A. Hanami, Fumito Komiya: "Japan", in R. Blanpain (ed.): International encyclopaedia for labour law and industrial relations (The Hague, Kluwer Law International, 2006), p. 79)

Obligation to provide reasons to the employee: Yes

Remarks

Upon request of the dismissed employee, the employer shall issue a certificate indicating the reason for dismissal in writing and without delay, i.e. between the advance notice and the last day of employment (art. 22, LSA).

Valid grounds (justified dismissal): any fair reasons

Remarks

Under the Civil Code, both parties can terminate an employment contract of indefinite duration at will provided that two weeks' notice is given (art. 627, CC).
However, the freedom of the employer to dismiss an employee has been restricted by the Japanese courts which have developed the doctrine of abusive dismissal based on the basic principle of prohibition of abuse of rights enshrined in art. 1(3) CC. The 2003 amendment to the LSA codified this long-established case-law under art. 18-2 LSA. Since the entry into force of the Labour Contract Act (2008), art. 18-2 LSA has been deleted from the LSA (see suppl. provisions - art. 2) and the prohibition of abusive dismissal is now to be found in identical terms in art. 16 LCL. This provision reads as follows: "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 rights and be invalid".

Although there are no listed statutory grounds for dismissal, they are generally included in collective agreements and/or in the workplace rules (Shugyo-Kisoku). Art. 89 (iii) LSA requires the employer to include in the workplace rules matters pertaining to termination of employment, including grounds for dismissal. These rules must be established in all enterprises employing ten or more workers.

Prohibited grounds: marital status, pregnancy, maternity leave, filing a complaint against the employer, temporary work injury or illness, race, sex, religion, social origin, nationality/national origin, trade union membership and activities, others, whistle blowing

Remarks

* Art. 19 LSL prohibits dismissal:
- during the absence of an employee because of work-related illness and 30 days thereafter; and
- during an employee's statutory maternity leave and 30 days thereafter.
If an employee is dismissed during the above-mentioned periods, such dismissal will be void.

* The Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment (1973, as amended in 2006) prohibits dismissal based on sex (art. 6), marriage, pregnancy, childbirth, and requesting maternity leave (art. 9).

* Article 7 of The Trade Unions Act (1949, as amended in 2005) prohibits dismissal based on trade union activities and membership.

*Art. 104 LSA prohibits an employer from dismissing an employee on the grounds that he or she reported violations of the Labour Standard Act to the Inspecting authority.
Specific laws regulating certain aspects on employment also contain provisions on the prohibition to dismiss a worker for reporting violations of these laws to the competent authority (i.e. the Industrial Safety and Health Law, 1972, amended in 2006: art. 97 and the Security of Wage Payment Law, 1976, amended up to 2002: art. 14).

*See also the Whistleblower Protection Act (2004), art. 3 on the nullity of dismissal of a whistleblower.

* In addition, Art. 14 of the Japanese Constitution prohibits discrimination in political, economic or social relations on the grounds of race, creed, sex, social status or family origin.
More specifically, art. 3 LSA prohibits discriminatory treatment with respect to wages, working hours or other working conditions on the grounds of the nationality, creed or social status of any worker. Although political opinions is not listed as a prohibited ground in art. 3 LSA, it has been held that the term "creed" includes both political and religious beliefs(1).
"Nationality" is also generally interpreted to include the concept of race(2).


*******
((1) see Tadashi A. Hanami, Fumito Komiya: 'Japan', in R. Blanpain (ed.): International encyclopaedia for labour law and industrial relations (The Hague, Kluwer Law International, 2006), § 220, p. 137).
(2) Idem, citing the Hitachi Seisakujo case, The Yokohama District Court, 1974, HJ, No. 744, p. 29.

Workers enjoying special protection: workers' representatives, pregnant women and/or women on maternity leave, workers with a long period of service, workers on temporary leave following an occupational disease or a work injury

Remarks

See art. 19(1) LSA which prohibits an employer from dismissing a woman while on maternity leave of six weeks prior to (14 weeks in the case of multiple pregnancy) and eight weeks after the childbirth, and 30 days thereafter.
[As exception, however, dismissal is possible, if the enterprise is unable to continue its activities as a result of a natural disaster or some other unavoidable circumstances provided that the employer has obtained prior authorization from the Labour Standards Inspection Office].

Note that art. 19(1) LSA also apply to workers which are absent from work for a result of illness or injury incurred in the course of work, and for 30 thereafter.

See also art. 9(4) of the Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment (1973, as amended in 2006) which provides for a special protection against dismissal during pregnancy and maternity leave, as it stated that: "Dismissal of women workers who are pregnant or in the first year after childbirth shall be void." However, this protection is not absolute since "it does not apply n the event that the employers prove that dismissals are not by reasons prescribed in the preceding paragraph [pregnancy, childbirth and requesting maternity leave]".

Notification to the worker to be dismissed: no specific form required

Remarks

No statutory provision on the form of notice.

Notice period:

Remarks

Art. 20 (1) LSA: at least 30 days advance notice.

However, in accordance with art. 21 LSA, this rule does not apply to the following workers:
* workers employed on a daily basis if they have worked for less than one month;
* workers employed for a specific period not exceeding two months;
* seasonal workers employed for a specific period not exceeding four months; and
* workers during a trial period if they have worked for less than 14 days.

In addition, an employer is exempt from obligations pursuant to article 20 LSA if the continued operation of the undertaking becomes impossible because of a natural disaster or some other unavoidable cause or in the event of dismissal for reasons attributable to the employee. In such cases, an employer is obliged to obtain administrative approval from the head of the local Labour Standards Inspection Office (art. 20 (3) LSL).

tenure ≥ 6 months:

  • All: 30 day(s).

tenure ≥ 9 months:

  • All: 30 day(s).

tenure ≥ 2 years:

  • All: 30 day(s).

tenure ≥ 4 years:

  • All: 30 day(s).

tenure ≥ 5 years:

  • All: 30 day(s).

tenure ≥ 10 years:

  • All: 30 day(s).

tenure ≥ 20 years:

  • All: 30 day(s).

Pay in lieu of notice: Yes

Remarks

Art. 20(1) LSA.

Notification to the public administration: No

Notification to workers' representatives: No

Remarks

No statutory obligation. However, prior consultation may be foreseen in a collective agreement between the employer and a trade union.

Approval by public administration or judicial bodies: No

Remarks

Except for a dismissal without notice which is allowed if the continued operation of the undertaking becomes impossible because of a natural disaster or some other unavoidable cause or in the event of dismissal for reasons attributable to the employee. In such cases, an employer is obliged to obtain administrative approval from the head of the local Labour Standards Inspection Office. (art. 20 (3) LSL).

Approval by workers' representatives: No

Definition of collective dismissal (number of employees concerned): Concerning 30 employees or more within one month.

Remarks

This threshold only applies to the compulsory notification to the Public Employment Office and the establishment of a social plan in the event of workforce reduction, as set out in art. 24 of the Employment Measures Act.
Article 4 of the Enforcement Ordinance of the Employment Measures Act (not available in English) specifies that the workforce reduction shall affect more than 30 employees.

Prior consultations with trade unions (workers' representatives): Yes

Remarks

Statutory obligations to consult with the trade union on the "re-employment assistance plan" (art. 24 (2) EMA).

In addition, according to case-law, mandatory consultation with the trade union on the reasons for dismissal, timing, scale and its methods, is part of the requirements which must be satisfied for an adjustment dismissal to be considered valid (see remark under definition of collective dismissal).

Notification to the public administration: Yes

Remarks

Statutory obligation to notify the Minister of Labour in the event of workforce reduction (art. 27(1) EMA).
In addition, the employer must establish a "re-employment assistance plan" (=social plan) and submit for approval to the Chief of Public Employment Security Office (art. 24 EMA)

Notification to workers' representatives: Yes

Remarks

Statutory obligations to consult with the trade union on the "re-employment assistance plan" (art. 24 (2) EMA).

In addition, according to case-law, mandatory information to and consultation with the trade union on the reasons for dismissal, timing, scale and its methods, are part of the requirements which must be satisfied for an adjustment dismissal to be considered valid (see remark under definition of collective dismissal).

Approval by public administration or judicial bodies: No

Remarks

Administrative authorization of the dismissal is not required.
The employer is only required to obtain the approval of the administration with regard to the "re-employment assistance plan" (art. 24 EMA)

Approval by workers' representatives: No

Priority rules for collective dismissals (social considerations, age, job tenure): No

Remarks

No statutory selection criteria.
However, according to case-law, the use of reasonable criteria (objective standards) is one of the requirements which must be satisfied for an adjustment dismissal to be considered valid (see remark under definition of collective dismissal).

Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes

Remarks

The legislation only regulates the employer's obligations with regards to post-dismissal effects insofar as the employer is required "to formulate a plan concerning measures for assisting the re-employment of the workers who will unavoidably lose their jobs" (art. 24(1) EMA).

However, case-law as established the obligation to make reasonable efforts to avoid dismissals as part of the 4 requirements which must be satisfied for an adjustment dismissal to be considered valid (see remark under definition of collective dismissal).

Priority rules for re-employment: No

tenure ≥ 6 months: 0 month(s)

tenure ≥ 9 months: 0 month(s)

tenure ≥ 1 year: 0 month(s)

tenure ≥ 4 years: 0 month(s)

tenure ≥ 5 years: 0 month(s)

tenure ≥ 10 years: 0 month(s)

tenure ≥ 20 years: 0 month(s)

Redundancy payment:

tenure ≥ 6 months: 0 month(s)

tenure ≥ 9 months: 0 month(s)

tenure ≥ 1 year: 0 month(s)

tenure ≥ 2 years: 0 month(s)

tenure ≥ 4 years: 0 month(s)

tenure ≥ 5 years: 0 month(s)

tenure ≥ 10 years: 0 month(s)

tenure ≥ 20 years: 0 month(s)

Notes / Remarks

Notes

No statutory severance pay or redundancy payment.
Collective agreements can provide for severance pay in case of dismissals.

Compensation for unfair dismissal - free determination by court: No

Compensation for unfair dismissal - Are there legal limits?:

No

Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method): Unjustified dismissals are null and void. Consequently, if a dismissal is held to be unjustified, the employment relationship will always continue. The employee will only be entitled to receive his or her normal wages for the period between the dismissal and the reinstatement.

Reinstatement available: Yes

Remarks

See art. 16 LCL.This provision reads as follows: "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 rights and be invalid".

Preliminary mandatory conciliation: Yes

Remarks

Under the new Labour Tribunal System, the Labour Tribunal Committee initially tries to resolve labour disputes through conciliation and in the case of its failure it proceeds to a Labour Tribunal procedure.
It is also

Competent court(s) / tribunal(s): ordinary courts

Remarks

Ordinary courts have had traditionally exclusive jurisdiction over claims of unfair dismissal.
However, pursuant to the Labour Tribunal Law (Act No 45 of 2004 - in force since 2006), a Labour Tribunal system was established. The law establishes Labour Tribunal Committee (LTC) in Districts Court consisting of a judge and two independent experts in labour relations. The committee initially tries to resolve labour disputes through conciliation and mediation and in the case it fails to do so, it then proceeds to the adjudication of the case pursuant to the Labour Tribunal procedure. The Labour Tribunal procedure should be rapid and conclude after a maximum three sessions. The decision of the Labour Tribunal has the force of settlement in the court, unless either party raises an objection. When an objection is raised, the Labour Tribunal procedure is transformed into a normal judicial process pending at the District Court, in which the Labour Tribunal has been set up.

Existing arbitration: No

Remarks

Under the Labour Tribunal System, the Labour Tribunal Committee (LTC) attempts to settle the individual labour dispute through mediation in its second or third session and if one of the parties rejects it, the LTC will issue a judicial decision following the Labour Tribunal procedure. (See Labour Tribunal Act - No. 45 of 2004).