Japanese labour law

Japanese labour law is the system of labour law operating in Japan.

Employment Agreements

Under the Civil Code, a contract in which one person performs services for another with compensation may be construed as any one of the following:

an employment agreement (雇用契約, koyō keiyaku) where the object is the completion of labor under the employing party's direction.
an independent contractor agreement (請負契約, ukeoi keiyaku) where the object is the completion of a specific task.
a mandate agreement (委任契約, inin keiyaku) where, similar to power of attorney in common law countries, one party performs designated tasks on the other party's behalf. These tasks are usually legal acts but may be non-legal acts, in which case, the agreement is referred to as a quasi-mandate (準委任, jun-inin).

Employment agreements are regulated by the Civil Code and by the Labor Standards Act (労働基準法, Rōdō-kijun-hō). (The JETRO reference below covers this subject.) Some general guidelines follow^[1]—some items apply only to companies with ten or more employees:

Conditions of employment

Conditions of employment must be clearly set out in the employment agreement or in supplementary rules which are provided to the employee.

Term and termination

A fixed-term employment contract is generally limited to one year (there are some exceptions). For tenured staff, the term is not specified (but of course retirement age is usually stated).

An employee is permitted to resign at any time (usually two weeks' notice is required), but an employer that tries to fire an employee without rational, reasonable, and socially-acceptable cause may lose an abusive-dismissal court case.

(Contract non-renewals may be a different matter; but if the contract is a full-year contract, and has been renewed at least once, then compensation—typically one month's pay for each year worked—is often negotiated).

The Labor Standards Act provides that if an employee is fired, notice must be provided at least thirty days in advance, or thirty days' pay must be provided in lieu of notice. Firing is specifically prohibited during:

Maternity leave of a female employee, and for 30 days afterward.
Hospitalisation of an employee following job-related illness or injury, and for 30 days afterward.

(An employee who plans to contest dismissal should say so, demand that the reason be provided in writing, and should not accept the thirty days' pay in lieu of notice—as this may be construed as accepting dismissal.)

Pay

Japan has minimum wage laws: the actual amount is based upon the local cost of living and therefore varies from region to region (see links below).

Pay must generally be provided in full, in cash, and paid directly to the employee on or by a specified day of the month (as per the contract).

Cash payments are usually made by electronic funds transfer. The maximum pay period is one month, which is the standard pay period throughout Japan, although bonuses and other supplemental payments such as commuter allowance may be paid at longer intervals.

Working hours

Maximum full-time working hours in Japan are eight hours per day and 40 hours per week.

If an employee works six to eight hours in a day, they are entitled to a 45-minute break; if an employee works eight hours in a day, they are entitled to a one-hour break. An employee is entitled to one holiday per week unless they otherwise receive four or more holidays within every period of four weeks. Overtime pay must be provided for any work over eight hours per day, over 40 hours per week or on holidays. Regulations provide that the overtime premium must be at least 25% for additional work on a workday, 35% for holiday work and an additional 25% for work late at night (usually defined as 10 PM to 5 AM).

Despite the fact overtime pay is required by law, Japanese companies have been known to take employees to court over employees' requests for overtime or other legitimate compensation.^[2]

Leave

The Labor Standards Act prescribes minimum periods of paid annual leave based on an employee's seniority. Ten days of annual leave must be allowed following the employee's first 6 months of service. The minimum amount of annual leave increases each year thereafter following a fixed schedule (as per the contract).

Several forms of unpaid leave are also provided by law, including maternity leave, child care leave, family care leave and nursing leave.

Prohibiting Discrimination

Article 4 of the Labor Standards Act prohibits discrimination in pay based on gender: "An employer shall not engage in discriminatory treatment of a woman as compared with a man with respect to wages by reason of the worker being a woman."

Subsequent legislation has also banned forms of disparate treatment which were previously used to skirt this stipulation. For instance, women must be afforded the same hiring, job training, promotion opportunities and retirement plans as men. Despite the law, it is reported that the disparity in pay and in promotion between men and women is one of the highest of the so-called advanced countries.

Article 3 of the Labor Standards Act prohibits ethnic, national and religious discrimination by employers in regards to work conditions: "An employer shall not engage in discriminatory treatment with respect to wages, working hours or other working conditions by reason of the nationality, creed or social status of any worker..."

Article 7 of the Trade Union Act prohibits discrimination against people who join or attempt to join a union, or who participate in union activities.^[3]

References

↑ "Foreign Workers Handbook" (PDF). Tokyo Metropolitan Government Labor Consultation Center. 2008.
↑ Karel van Wolferen. (1990) The Enigma of Japanese Power, New York: Vintage Books
↑ Japan Institute for Labor Policy and Training Trade Union Law Retrieved on July 4, 2012

External links

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