FTC regulated: Yes

Valid reasons for FTC use: no limitation

Remarks

An FTC can be concluded for less than 3 years without objective reasons (section 14 of LSA).
An FTC can be however concluded for a maximum duration of five years only in the following cases: 1) if the worker is highly specialized with specialized knowledge, skills or experience that meet criteria established by the Ministry of Health, Labour and Welfare (MHLW) or 2) if aged 60 years or older (sections. 14(1) and (2) of LSA).
It is worth highlighting that the dismissal of a fixed-term worker before the expiry of the term is not permitted,unless "there are unavoidable circumstances" (sec. 17(1) of LCL).

Section 20 of LCA, as amended in 2012, imposes a prohibition of unreasonable labor conditions through the use of a FTC, thereby restricting unreasonable differentiation of working conditions between FTCs and workers with indefinite labour contracts.
Sec. 20 provides that if a labor condition of a fixed-term labor contract for a worker is different from the counterpart labor condition of another labor contract with an indefinite term for another worker with the same employer due to the existence of a fixed term, such difference is not allowed to be unreasonable, considering the content of the duties of the workers and the extent of responsibilities accompanying the said duties (hereinafter referred to as the "job contents " in this section), the extent of changes in the job contents and work locations, and other circumstances.

Section 8 of the PT-FT Act [former u201cPart-time Workers Actu201d as amended by the 2018 Act (entry into force April 2020, and 2021 for small and medium-sized enterprises)]: A business operator shall not create differences found to be irrational between the base pay, bonuses, or other treatment of Part-Time/Fixed-Term Workers employed thereby and the corresponding types of treatment of ordinary workers, with due consideration to the circumstances that are found to be appropriate, among the descriptions of work of said Part-Time/Fixed-Term Workers and ordinary workers and the level of responsibilities associated with such work (hereinafter referred to as "Job Description"), the extent of changes in such Job Descriptions and their assignments, and other circumstances, in light of the nature of the treatment and the purposes of provision of the treatment.

Section 9 of the PT-FT Act: With regard to a Part-Time/Fixed-Term Worker whose Job Description is equal to those of ordinary workers (referred to as "Part-Time/Fixed-Term Worker with Equal Job Description" in paragraph 1 of Section 1) and whose Job Description and assignment are likely to be changed within the same range as the Job Descriptions and assignments of said ordinary workers, in light of the customary practice at the place of business concerned and other circumstances, and throughout the entire period until the termination of the employment relationship of the Part-Time/Fixed-Term Worker with said business operator (referred to as "Part-Time/Fixed-Term Worker Equivalent to Ordinary Workers" in the following Article and the aforementioned paragraph), the business operator shall not engage in discriminatory treatment in terms of base pay, bonuses, or other types of treatment by reason of the Part-Time/Fixed-Term Worker being a Part-Time/Fixed-Term Worker.

Maximum number of successive FTCs: no limitation

Remarks

No statutory limitation but employersu2019 statutory duty to consider not renewing labour contracts repeatedly:
No statutory limitation on the maximum number of successive FTCs. However, Sec. 17 (2) of the LCA provides 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

No statutory limitation but the possibility of converting an FTC into an indefinite contract upon workersu2019 application, if the cumulative duration of two or more successive FTCs exceeds 5 years.

Although the legislation places limits on the duration of a single fixed-term contract, the maximum cumulative duration of FTCs is not subject to statutory limitations.

Sec. 14 of LSA: A labour contract cannot be concluded for a term exceeding three years, exception made for the contracts concluded for the completion of a specified project. The maximum duration of five years is authorized for the contracts of labour of highly specialized employees and those aged 60 years or older.

However : Sec 18(1) LCA provides for the possibility of conversion of an FTC with the same employer to an indefinite labour contract upon the application by the worker, if the cumulative duration of two or more successive FTCs exceeds 5 years (excluding FTCs concluded with an interruption of 6 months or more, under section 18(2)), which the employer is deemed to accept.)

% of workforce under FTC: 37.7

Remarks

Source: Labour Force Survey, 2019 – Incidence of non-regular workers include FT part-time workers (including “arbeit”, temporary agency workers, FT contract workers, temporary contract workers (shokutaku) and other FT workers.

Maximum probationary (trial) period (in months):

no limitation
Remarks

Probationary periods are frequently used in practice. There is no statutory provision on the maximum duration of probationary periods. In practice, three-month probationary periods are most commonly used and the majority of them are set with the duration of one to six months.

In case of indefinite contracts, under the Japanese case law, probationary contracts have been considered as labour contracts in which the employer’s right of cancellation is reserved. The scope of employer's freedom to dismiss a worker based on such a reserved cancellation right should be recognized as 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, the dismissal can be justified on the basis of objectively reasonable grounds and generally accepted norms. (See: Mitsubishi Jushi Case, Supreme Court (1973), SMS, Vol. 27, No. 11, p. 1536 as cited in Tadashi A. Hanami, Fumito Komiya, Ryuichi Yamakawa: "Japan", in R. Blanpain (ed.): International encyclopaedia for labour law and industrial relations (The Hague, Kluwer Law International, 2015), p. 79)

Obligation to provide reasons to the employee: Yes

Valid grounds (justified dismissal):

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, disability, others, whistle blowing

Remarks

Sec. 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, sec. 3 of 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 sec. 3 of 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, Yamakawa, R: 'Japan', in R. Blanpain (ed.): International encyclopaedia for labour law and industrial relations (The Hague, Kluwer Law International, 2015), § 252, p. 147).
(2) Ibid,, citing the Hitachi Seisakujo case, The Yokohama District Court, 1974, HJ, No. 744, p. 29.
*******

Section 19(1) of LSA: Employers shall not dismiss a worker
during a period of absence from work for medical treatment with respect to injuries or illnesses suffered in the course of employment, nor within 30 days thereafter, and shall not dismiss any woman during the period of absence from work before and after childbirth in accordance with section 65 nor 30 days thereafter. If an employee is dismissed during the above-mentioned periods, such dismissal will be void. However, this shall not apply in the event that the employer pays compensation for discontinuance in accordance with section 81, nor when the continuance of the business has become impossible due to natural disaster or other unavoidable reasons, subject to approval of the relevant government agency (section 19(2)).

Section 104 of LSA: In the event that a violation of this Act or of an ordinance issued pursuant to this Act exists at a workplace, a worker may report such fact to the relevant government agency or to a labour standards inspector. Employers shall not dismiss a worker or shall not give a worker other disadvantageous treatment by reason of such worker having made a report set forth in the preceding paragraph.

Section 6 of Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment (EEOA), as amended in 2019, provides that employers shall not discriminate against workers on the basis of sex, with regard to dismissal and renewal of the labour contract See also secs 9(2)(3)(4) for prohibition of dismissal on the grounds of marriage, by reason of pregnancy, childbirth or for requesting absence from work, having taken absence from work of the same act, or by other reasons relating to pregnancy and childbirth. Sec 9(4) also provides that dismissal of women workers who are pregnant or in the first year after childbirth shall be void. However, this shall not apply in the event that the employers prove that dismissals are not by reasons prescribed in the preceding paragraph.

Section 7 of the Trade Unions Act (1949, as amended in 2018) prohibits dismissal based on trade union activities and membership. The employer shall not commit the acts of unfair labour practice, including discharging a worker by reason of such worker's being a member of a labour union, having tried to join or organize a labour union, or having performed justifiable acts of a labour union; or making it a condition of employment that the worker shall not join or shall withdraw from a labour union.

Section 35 of the Act on Promoting Employment of Persons with Disabilities of 1960, as amended in 2013, prohibits unfair discriminatory treatment of disabled persons with respect to determination of wages, training and the use of welfare facilities, and other matters. Under the guidelines established based on this Act, the following dismissals are prohibited: a) dismissing workers with disabilities by reasons of disabilities; b) putting unfavourable conditions only on persons with disabilities when setting conditions for dismissals; and c) prioritizing those with disabilities among employees who meet the conditions for dismissals.

Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children to Other Family Members prohibits dismissal of a worker making an application for, and being on childcare leave, caregiver leave (sec. 10), time off for sick/injured childcare or caregivers (sec. 16) Such prohibition of dismissal is also applicable to a worker who takes care of a family member in a care-requiring condition (sec. 16-9). Section 52-4(2): Employers must not dismiss or otherwise treat a worker disadvantageously due to said worker having asked for the assistance in the resolution of a dispute, advice, guidance or recommendations regarding the dispute; or made an application for administrative mediation under section 52-5.

Part-time and Fixed-term Workers Act, as amended in 2018, prohibits dismissal or other unfavourable treatment of a PT-FTC worker for the having requested information regarding their treatments, in accordance with section 14(1) and (2) which oblige employers to explain to PT-FTC workers about their treatments (upon recruitment, and also when the worker requests information on the difference of treatment compared to regular workers; including on the difference from regular workers and reasons for it) (Section 14(3)). The Act also prohibits dismissal or other unfavourable treatment of a PT-FTC worker who has requested assistance from the Directors of Prefectural Labour Bureaux in the resolution of a dispute through advice, guidance or recommendations, or through mediation (sections 24 and 25).
* The 2018 amendment to the Part-time Workers Act (the tile will change to Part-time and Fixed-term Workers Act) will enter into force on 1 April 2020, except that for small and medium-sized enterprises on 1 April 2021.

Act on Promoting the Resolution of Individual Labour Disputes prohibits dismissals or other unfavourable treatment of a worker who has requested assistance from the Director of the Prefectural Labour Bureau in the resolution of an individual labour dispute through advice or guidance, or through conciliation (sections 4(3) and 5(2)).

Whistle-blower Protection Act (2004) provides for the nullity of dismissal of a whistle-blower (section 3).

Act on Comprehensive Promotion of Labour Policies, as amended in 2019, prohibits dismissals or other unfavourable treatment of a worker (section 30-2 (2)) who has consulted with the employer concerning power harassment (section 30-2(2)).

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

See above

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).

Pay in lieu of notice: Yes

Art. 20(1) LSA.

Notification to the public administration: No

Notification to workers' representatives: No

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

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) The term is not statutorily defined. “The courts have developed four criteria for determining whether dismissal for economic reasons is valid. Those criteria are (i) whether there was a genuine financial need to reduce the workforce, (ii)whether the employer made a reasonable effort to avoid dismissal, (iii) whether the employer bargained or consulted with the unions, and (iv) whether the standards by which he selected the employees for dismissal were reasonable and whether the employees were in fact selected in accordance with that standard [The Toyo Sanso case, the Tokyo High Court in 1979, RMS, Vol. 30, No. 5, p. 1002].<br/><br/>Where an employer <b> reduces the workforce by more than 30 employees through dismissal or retirement in one establishment in any one month </b> because of reduction of scale of operations or some other reason, he/she must give notice to the Public Employment Security Office one month prior to the date of that workforce reduction (sec. 24 of the Act on Comprehensive Promotion of Labour Policies: ACPLP). However, where the entire reduction does not occur at the same time, notice may be given prior to the date of the last dismissal or retirement. If the employer fails to do this, he can be fined. The purpose of this requirement is to make it easy for the Government to take action, to promote the employment of redundant workers through employment security agencies and public vocational training agencies (the Enforcement Ordinance of the ACPLP)”.<br/>______________<br/>See Tadashi A. Hanami, Fumito Komiya; Yamakawa, R: &quot;Japan&quot;, in R. Blanpain (ed.): International encyclopaedia for labour law and industrial relations (The Hague, Kluwer Law International, 2015.

Remarks

This threshold applies to the compulsory notification to the Public Employment Office and the establishment of a re-employment assistance plan in the event of workforce reduction within one month due to economic reasons, as set out in sec. 24 of the ACPLP.
Sec. 7-2 of the Enforcement Ordinance of the ACPLP specifies that this requirement to establish a plan is applicable to the workforce reduction affecting more than 30 employees within one month due to economic reasons.
Note that this plan can be voluntarily submitted by establishments with fewer than 30 employees.
Regardless of the reasons of dismissals, notification to the Public Employment Office is required in cases of collective dismissal affecting more than 30 employees within one month (sec. 8 of the Enforcement Ordinance of the ACPLP). However, if the workforce reduction is not due to economic reasons, the establishment and submission of a plan is not required.
_____________
See detailed description of the purpose of this statutory requirement and how it is linked to the employment stabilization measures taken by the Government in case of mass economic dismissal, from Tadashi A. Hanami, Fumito Komiya, Yamakawa, R.: "Japan", in R. Blanpain (ed.): International encyclopaedia for labour law and industrial relations (The Hague, Kluwer Law International, 2015): pages 137-138.
_________
The purpose of this requirement is to make it easy for the Government to take action, to promote the employment of redundant workers through employment security agencies and public vocational training agencies.

Notification to the public administration Yes

Remarks

"Yes" for collective dismissals due to economic reasons involving more than 30 employees within one month for the establishment of a re-employment assistance plan.
"No" for ordinary collective dismissals.

u2022Statutory obligations to consult with the trade union on the "re-employment assistance plan" (sec. 24 (2) ACPLP).

Sec. 24(1): If an employer carries out a downscaling of its operations, etc. prescribed by Ordinance of the Ministry of Health, Labour and Welfare that is expected to compel a considerable number of its workers to separate from employment at any of its places of business, the employer must formulate a plan for measures to support such workers in finding new employment (hereinafter referred to as a "New Employment Support Plan") pursuant to the provisions of Ordinance of the Ministry of Health, Labour and Welfare.
Sec. 24(2): In formulating a New Employment Support Plan pursuant to the provisions of the preceding paragraph, the employer must hear the opinion of the labour union, if the place of business under the New Employment Support Plan has a labour union composed of a majority of the workers, or must otherwise hear the opinion of a representative of the majority of the workers, if the place of business does not have such a labour union. The same applies if the employer seeks to modify the New Employment Support Plan.

Notification to trade union (workers' representatives) Yes

Remarks

"Yes" only in case of reduction of more than 30 employees.
Statutory obligation to notify the Minister of Labour in the event of workforce reduction involving more than 30 employees within one month (sec. 27(1) ACPLP).
In addition, the employer must establish a "re-employment assistance plan" and submit for approval to the Chief of Public Employment Security Office (sec. 24 of ACPLP) if the workforce reduction is due to economic reasons.

Notification to workers' representatives: Yes

Remarks

In case of a dismissal of 30 employees or more within one month due to economic reasons, statutory obligations exist to consult with the trade union or workersu2019 representatives on the "re-employment assistance plan" (sec. 24(2) of ACPLP).

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 (regardless of the threshold) to be considered valid.

Approval by trade union (workers' representatives) 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" (sec. 24(3) of ACPLP) in cases of a dismissal of 30 employees or more within a month due to economic reasons.

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...) No

Priority rules for re-employment 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" (sec. 24(1) of ACPLP) concerning a dismissal of 30 employees or more within a month due to economic reasons.

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

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mine workers: No

Unfair/Abusive dismissal: compensation in lieu of reinstatement is not a statutory remedy. However, monetary orders/settlements can be rendered by the ordinary courts, labour tribunal procedures, and administrative conciliation. The courts usually render judgement prescribing reinstatement when they find the dismissal cases abusive under the doctrine of abusive dismissal. The courts also order together with reinstatement, payment of unpaid wages, plus interest, between the date of dismissal and the date of final oral argument before the court, and order continuation of monthly payment accruing each month after the date of final oral argument until the issuance of the judgment.
However, the courts also render monetary settlements when it is difficult in practice for workers to return to work due to the deterioration of their relationship with the employers. Labour tribunal procedures are preferred by workers who seek monetary awards or settlements without reinstatement. Monetary settlements are also possible through administrative conciliation/mediation, but the amount obtained is usually lowered than the amount that can be obtained through labour tribunal procedures.
_____________
See Tadashi A. Hanami, Fumito Komiya, Yamakawa, R.: "Japan", in R. Blanpain (ed.): International encyclopaedia for labour law and industrial relations (The Hague, Kluwer Law International, 2015; and Yamakawa, R. u201cJapanu201d in ILO (2016) Resolving individual labour disputes: a comparative overview.

: No

No

Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method): There is no statutory limits or calculation method other than dismissal cases without statutorily prescribed notice period.

managerial / executive positions: Yes

Sec. 16 LCA: "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". However, it is possible for the dismissed worker, if he/she requests, to seek monetary settlement through administrative conciliation/ mediation and adjudication through the labour tribunal procedures or the civil courts. See above for detailed descriptions.

police: Yes

Sec. 2 of Act on Promoting the Resolution of Individual Labor-Related Disputes sets out the principle of voluntary settlement of disputes: If an individual labour-related dispute arises, the disputing parties shall endeavour promptly and in good faith to achieve a voluntary resolution.
Under the labour tribunal procedures, the labour tribunal panel, composed of a professional judge and lay members from the social partners, initially tries to resolve individual labour disputes through mediation before the panel renders an award. In the ordinary civil court procedures, mediation is also offered.
Administrative conciliation/mediation is offered by local (prefectural) labour bureaus and local labour relations commissions.
In employment discrimination disputes (disputes related to the EEOA, the Disability Employment Promotion Act, the Part-Time Work Act and the Childe and Family Care Leave Act), administrative mediation can be initiated upon request by one of the disputing parties. For other individual labour disputes, administrative conciliation is voluntary subject to partiesu2019 consent.

The parties can choose to access any of the following bodies:

Ordinary courts : workers who wish to obtain reinstatement tend to access ordinary courts.

Labour tribunal procedures within the ordinary courts (the Labour Tribunal Act): the Labour Tribunal Panel within Districts Court consisting of a judge and two lay members appointed based on the recommendation of employers’ and workers’ organizations. The panel initially tries to resolve labour disputes through mediation and in the case settlement is not reached, it then proceeds to the adjudication the case and renders an award. The award is binding and enforceable unless one of the parties files an objection. If either party objects, the award loses its effect and the case is automatically referred to a civil court and treated as ordinary civil litigation.

Dispute adjustment commission established in each prefecture under the Individual Labour-Related Disputes Act offers conciliation that can be initiated at the request of both parties.. Local Labour Relations Commissions (LLRC) which were originally established under the Trade Union Act also offer conciliation for individual labour disputes. The LLRCs comprise members representing employers’ and workers’ organizations and those representing public interests (labour law and industrial relations experts). However, not all the LLRCs provide conciliation for individual labour disputes. Each commission is composed of neutral experts on labour and employment laws. Prefectural local bureaus also provide counselling and information services, administrative guidance or recommendations to the disputing parties to facilitate voluntary resolution of disputes by the parties themselves. For termination disputes involving discrimination and power harassment, the commission conducts mediation in which the commissions make proposals for dispute resolution. Mediation can be initiated at the request of one of the disputing parties.

Local labour inspection offices within prefectural labour bureau: while the labour inspectorates are responsible for compliance with the LSA and do not have the function of resolving individual labour disputes, they play a role in prevention individual labour disputes through monitoring and correcting violations of statutory provisions regulating termination of employment, including illegal dismissal through recommendations and enforcement (e.g. dismissals without notice, employers’ obligations to draw up work rules) under the LSA. Workers can also turn to the labour inspectorates (sec. 104 of LSA) Sec. 104 of LSA provides that in the event that a violation of this Act or of an ordinance issued pursuant to this Act exists at a workplace, a worker may report such fact to the relevant government agency or to a labour standards inspector. Sec. 102(2) of LSA: employers shall not dismiss a worker or shall not give a worker other disadvantageous treatment by reason of such worker having made a report set forth in the preceding paragraph.

Moreover, collective agreements which may have grievance procedures and joint consultation procedures between employers and enterprise-based unions play an important role in preventing disputes in unionized workplaces. However, the role of collective agreements and joint consultation has weakened due to the decline in union density.
________
See Yamakawa, R. “Japan” in ILO (2016) Resolving individual labour disputes: a comparative overview.

Existing arbitration: No

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).