employment law overview Japan 2021-2022...| 3 employment law overview 2021-2022 / Japani. general...

| 1 employment law overview

2021-2022 / Japanwww.leglobal.org

employment law overview Japan 2021-2022ATSUMI & SAKAI / Proud Member of L&E GLOBAL

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2021-2022 / Japan

table of contents.


i. General overview 03ii. HirinG praCtiCeS 06iii. employment ContraCtS 08iv. workinG ConditionS 10V. Anti-DiscriminAtion LAws 12vi. pay eQUity lawS 15vii. SoCial media and data privaCy 17 viii. termination of employment ContraCtS 18iX. reStriCtive CovenantS 21X. tranSfer of UndertakinGS 23Xi. trade UnionS and employerS aSSoCiationS 24Xii. employee BenefitS 26


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i. general overview

2. Key points•Japanese employment laws mainly coveremployer-employee relationships. Boardmembers and independent contractors are, inprinciple,notcategorisedasemployees.

•There is no “at will” employment in Japan.Japaneselawrequiresthatterminationofregularemployment shall be considered objectively,deemed reasonable, and appropriate uponsocialconvention,whichisreadrigidlyinlightofJapanesejudicialprecedent.

•Regulation concerning overtime work hasbeen strengthened with the recent legislativeamendments. In principle, work on statutorypublicholidaysandlate-nightworkrequiresextraallowanceinadditiontothenormalwage.

•Japaneselawprovidesvariousprotectionsagainstdiscriminative treatmentsnotonlyby reasonofnationality, creed, social status or gender, butalsoduetotheassociationwithunionactivities,ortakingchildcareornursingcare leave.Thereis also a prohibition against unreasonabledifferences between full-time permanentemployees and non-regular employees.Furthermore,anemployer’sobligationtopreventharassmenthasbeenstrengthenedinlightoftherecentlegislativeamendments.

•Dominantmajorityunions in Japanaredeemedas enterprise unions. The unionisation rate inJapan has been considerably and continuouslydeclining.

1. introductionJapaneseemploymentlawsmainlycoveremployer-employeerelationships.TheselawsapplytoallemployeesworkinginJapanregardlessoftheirnationality.However,boardmembersasdefinedundertheCompanyAct(2005)aswellasindependentcontractorsarenotcategorisedasemployeessubjecttoJapaneseemploymentlaws,inprinciple,andthereforearenotprotectedunderJapaneseemploymentlaws.


3. legal frameworKEmployment law in Japan ispredominantlybaseduponthefollowingsources:

(i)theConstitution(1946);

(ii)laws,inparticular,compulsorylawsincludingbutnot limited to theLabourStandardsAct (1947),the Labour Contract Act (2007), the MinimumWageAct(1959),theIndustrialSafetyandHealthAct(1972),theIndustrialAccidentCompensationInsurance Act (1947), the Act on Securing, etc.of Equal Opportunity and Treatment betweenMen and Women in Employment (1972) (the“EqualOpportunityAct”),theActontheWelfareofWorkersWhoTakeCareofChildrenorOtherFamilyMembersIncludingChildCareandFamilyCare Leave (1991) (the “ChildCareandNursingCareAct”),theActonImprovementofPersonnelManagement and Conversion of EmploymentStatus for Part-Time Workers and Fixed-TermWorkers (1993) (the “Part-Time/Fixed-TermEmploymentAct”),theLabourUnionAct(1945),theEmploymentSecurityAct(1947)andtheActfor Securing the Proper Operation of WorkerDispatchingUndertakingsandImprovedWorkingConditions for Dispatched Workers (1985) (the“WorkerDispatchAct”);

(iii) government ordinances and implementationregulations;


2021-2022 / Japanan alliance of employers’ counsel worldwide

(iv)collectivebargainingagreements;

(v)company’sworkrules;and

(vi)employmentcontracts.

Furthermore, administrative authorities havepublished various guidelines relating to labourlaws. Thepurposeof these guidelines is to assistin the legal interpretation of the applicable laws.Theseguidelinesarenotlegallybinding,however,they are widely accepted as the social standardand/or best practices in Japan. In particular,Supreme Court precedent has the potential tohaveconsiderable influenceon theapplicationoflabour and employment laws in market practiceandJapanesecustom.

4. new developments One of the most significant legislative changesimpacting the operations of employers in Japanis due to the recent overhaul of employmentlegislation, following the enactment of theWorkStyleReformAct (the “ReformAct”). TheReformActhashadasubstantialimpactonemployeesduetothefollowingnotablechanges:(i)amendmentstotheworkinghourssystem;(ii)ensuringtheuseofannualpaidleave;(iii)trackingofworkinghours;and(iv)“equalwork,equalpay”.

Asto(i)workinghourssystem,theLabourStandardsActprovidesalimitationonthenumberofovertimehours of employees as a general rule (e.g. notmorethan45hourspermonthand360hoursperyear).However,priortotheReformAct,employerswere, in exceptional circumstances, allowed torequestemployees toworkovertime inexcessoftheselimitsif“specialcircumstances”existed(e.g.during busy periods). The Reform Act amendedthe relevant provisions of the Labour StandardsAct, and modified this practice significantly byintroducing a legal cap on the total number ofovertimehoursemployeesarepermittedtowork.TheseamendmentscameintoeffectinApril2019.

Asto(ii)annualpaidleave,inpractice,ithasbeencommoninJapanforemployeestonotutilisethemajorityof their annual paid leave. Furthermore,employeesfrequentlyallowtheirannualpaidleaveto lapse. The Reform Act amended the relevantprovisions of the Labour Standards Act, and has

introduced an obligation on employers to ensurethattheiremployeesutiliseatleast5daysofannualpaidleaveperyear(orduringaperiodthatcanbedesignatedby theemployer).TheseamendmentscameintoeffectinApril2019.

Asto(iii)trackingofworkinghours,theReformActamendedtheIndustrialSafetyandHealthActandintroducedanewlegalobligationonemployerstoaccurately track their employees’ working hoursby utilising methods indicated in the ministryordinance. These methods include implementingthe ‘clock-in/clock-out’method of recording timeviaemployees’IDcardsand/orrecordingthetimeemployeesloginandoutoftheirworkcomputers.These changeshavebeen introduced in an effortto curb excessive working hours as well as toassistemployers inmonitoringthehealthoftheiremployees.Theamendedguidelineshaveprovidedgreaterclarityforemployersregardingthemethodsthey shoulduse tomonitor theworkinghoursoftheir employees. These amendments came intoeffectinApril2019.

Asto(iv)“equalwork,equalpay”,theReformActamended the Part-Time/Fixed-Term EmploymentAct,andhasintroducedtherequirementforworkersto receive fair and equal treatment irrespectiveof their job status. Furthermore, the Reform Actprohibitsirrationaldisparitybetween‘regular’and‘non-regular’employees.Theseamendmentshaveresulted in a requirement for reasonable equaltreatment of regular employees (i.e. full-timepermanentemployees)andnon-regularemployees(which includes fixed-term contract employees,part-time employees, and dispatch employees).TheseamendmentscameintoeffectinApril2020.

AnothernoteworthylegislativechangepertainstotheamendmentsoftheEqualOpportunityActandthe Act on Comprehensive Promotion of LabourPolicies (1966),bothofwhichcame intoeffect inJune 2020. The amendments require employersto introducemeasures to prevent harassment byestablishing a consultation system, and prohibitthe dismissal or mistreatment of workers whoconsult or cooperate with a harassment-relatedinvestigation.

Another major legislative change pertains tothe amendments on the Act on Stabilisation ofEmploymentof ElderlyPersons (1971),whicharedue to come into effect in April 2021.Under the



amendments,anemployerwhoseemployeeshavereachedtheageof65,shallendeavortoapplyoneofthefollowingmeasurestosuchemployeesuntiltheyreachtheageof70:(a)araiseofretirementage;(b)introductionofacontinuousemploymentsystem; (c) abolition of retirement age; or (d)measures other than employment by executingthe labour-management agreement (specifically,asystemforcontinuousoutsourcingcontractsorasystemallowingforemployeestoengageinsocialcontributionactivitiesonacontinuousbasis). It isimportant to note that this is only an obligationfor employers to make such efforts and is not amandatory obligation. There are no sanctionsimposedonemployersfornotimplementinganyofthemeasures,(a)-(d),asoutlinedabove.


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1. requirement for foreign employees to worK Foreignemployeeswhowish to apply for a long-term visa should first obtain a Certificate ofEligibility (‘COE’). A COE is a document issuedby the Ministry of Justice in Japan. In order toobtain the COE, a sponsor in Japan is required.Sponsors can be employers, schools or relatives.ThesponsorinJapanmustcontacttheappropriatelocal immigration office in order to apply for theCOE. Once the COE has been issued, the foreignemployee is then able to apply for a visa beforetheJapaneseembassyorconsulateinthecountrywhere the foreign employee resides. The COEshould be submitted to an immigration inspectorwithavalidvisaforlandingpermissionattheportof entry, within three months from the date ofissue.Once living in Japan, the foreign employeemust notify the local city ward office of his/herplaceofresidence.

Long-term visas can be provided for any type ofwork visa designated by Japanese law, for whichthepermitted standardperiodof stay in Japan isfiveyears,threeyears,oneyear,orthreemonths.Aforeignemployeewhoiscurrentlyworkingforanorganisation outside Japan andwill subsequentlybetransferredtothatorganisation’sJapaneseofficeforalimitedperiod,maybeeligibleforaworkvisaasan intra-companytransferee.Requirements forobtainingan intra-company transfereevisaareasfollows: (i) the twoentitieshavea certain capitalrelationship; (ii) the employee has been engagedin activities which is covered by “engineer” or“humanity, international service” in that foreigncompanyforatleastoneyearimmediatelybeforetransfertoJapan;and(iii)theemployeewillreceiveasalaryaftertransfertoJapanatthesamelevelormorethanthatofwhichaJapanesenationalwouldreceive by engaging in the same type ofwork. A

foreign employee who does not fall under thesecategoriesmaybeeligibleforothertypesofworkvisasiftheforeignemployeehasadirectcontractwiththerelevantentityinJapan.

Aforeignemployeeisprohibitedfromengaginginactivityoutsidethescopepermittedintheirworkvisa. However, performing activities outside thescopeof theirwork visa is permissible subject toapprovalgrantedbytheMinisterofJustice.

2. does a foreign employer need to establish or worK through a local entity to hire an employee?AforeignemployerdoesnotneedtoworkthroughalocalentityinordertohireanemployeeinJapan,asfarastheserviceengagedbytherepresentativeoffice to which the employee belongs, is limitedtocertainpreparatoryandauxiliaryactivities(e.g.market survey, information gathering, purchaseofgoodsandadvertisements).Therepresentativeoffice conducting the preparatory and auxiliaryactivitiesforaforeignemployerwould,ingeneral,notbeconsideredasapermanentestablishment.Ontheotherhand,ifaforeignemployercommencesany direct business or operation,which could besubjecttotaxationinJapan(e.g.contractexecutionor sales activities), the foreign employer wouldneed to establish a local entity. Otherwise, therepresentativeofficewouldlikelybeconsideredasapermanentestablishment.RegardlessofwhetherornotalocalentityisestablishedinJapan,aforeignemployerisobligedtoprovideitsemployees,hiredand working in Japan, with social insurance andemploymentinsurance.


ii. hiring practices



3. limitations on bacKground checKsThere is no statutory limitation on backgroundchecks in Japan. However, due to the sensitivenature of data gathered, certain informationrequirescarefulhandling.TheActontheProtectionof Personal Information (2003) provides thatsensitivepersonalinformationsuchasrace,creed,socialstatus,medicalhistory,criminalrecord,andthefactofhavingsuffereddamagebyacrimemustnotbecollected,inprinciple,unlessanapplicant’sconsent is obtained. Furthermore, the guidelinesbased on the Employment Security Act providethat an employer is prohibited from acquiringinformationwhichmaybecomeacauseforsocialdiscrimination.Thisincludes,butisnotlimitedto,informationpertainingtorace,ethnicgroup,socialstatus,familyorigin,domicileorbirthplace,creed,personalbeliefs,orhistoryofunionmembership.In practice, for the purpose of lawfully searchingan individual’s background, informed consentfrom each individual employee or prospectiveemployee,andspecifying thepurposeofand theitemssubjecttosaidbackgroundcheck,istypicallyutilised. It is also common practice to ask for adeclaration of criminal records and to require amedical examination. This sensitive informationshallbecollected inasociallyacceptablemannerandsecurelyretained.

4. restrictions on application/interview questionsThe guidelines advise that an employer shouldrefrain from asking questions of an applicant orrequestinginformationwhichwouldleadtosocialdiscrimination, including, but not limited to, thefollowing:

•domicileoforiginand/orbirthplace;•family members’ circumstances, such as theirjob,relationship,health,socialstatus,education,incomeandassets;

•housingsituation,suchaslayoutofrooms,numberof rooms, type of housing and neighborhoodfacilities;

•lifeandhomeenvironment;•religion;•politicalpartysupport;•philosophy andpersonal creed (e.g. beliefs andvaluesthatgovernone’slife);

•persontorespect;•personalbeliefs;•union membership or activities, studentmovementsorsocialmovements;and

•preferrednewspapers,magazineandbooks.


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iii. employment contracts1. minimum requirementsWhileanemploymentcontractmaybe inwrittenor verbal form,when concluding an employmentcontract, the followingconditionsmustbeclearlyprovidedinwrittenform:

•termofemployment;•placeofemploymentandjobdescription;•startandfinishtime,overtimework,restperiod,daysoff,leaveandchangeinshifts;

•determination, calculation and payment ofwages(exceptretirementallowancesandspecialwages);and

•resignation and exit policies and procedures(includinggroundsfordismissal).

2. Fixed-term /Open-ended contractsGenerally, themaximumdurationof a fixed-termemployment contract is three years. However,there is anexception foremployeeswhopossessexpertknowledge,skillsorexperience,orwhoare60yearsofageorolder,inwhichcasethemaximumtermoftheemploymentcontractisfiveyears.

A similar exception exists for employees whopossess expert knowledge, skills or experience,or who are continuously employed after themandatoryretirementage,subjecttoapprovalbyaDirectorGeneraloftherelevantLabourBureau.

In the situation where a fixed-term employmentcontract with the same employer has beenrepeatedly renewed and its total contract termexceedsfiveyears,theemployeeisentitledtoapply

for conversion of his/her fixed-term employmentintoanindefinitetermfromthedayfollowingthedate of expiration of the fixed-term employmentcontract, and the employer is deemed to accepttheapplication.Inaddition,thetotalcontracttermmayberesetbysettingcertaincooling-offperiods(e.g.sixmonthsforaoneyearcontract).

3. trial periodsIn Japan, it is common practice to set aprobationary period of three to six months fornew hires, effective from the hiring date. Whilethere are no legal requirements regarding thelengthof theprobationaryperiod,aprobationaryperiodispresumedvoidifitisunreasonablylong,as this goes against public order and morals.The probationary period may also be furtherunilaterally extended in accordance with thework rules and/or the employment contract.In practice, however, probationary periods aretransientinnature,temporarilyallowingemployersto review an employee’s qualities and abilitiesbefore the employee is able to transition into aregular employment. Consequently, an employerisexpectedtodecidewhethertoacceptorrejectthe employee as a regular employee after theprobationaryperiodhasconcluded.

An extension of the probationary period is onlypermitted if there isa reasonableandcompellingneedfortheemployertocontinuetoevaluateanemployee’s qualities and abilities. Accordingly, anemployer will face a significantly greater hurdlewhenthecompanytriestoterminateanemployee’semployment during the extended probationaryperiod, compared to a termination after theexpirationoftheinitialprobationaryperiod.



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4. notice periodsAdvance notice of terminationmust be providedat least 30 days prior to dismissal. An employermayalsoprovideapaymentinlieuofsuchnotice,whichcorrespondsto30daysormoreofthesalaryamount.Noticeperiodscanalsobeshortenedbythenumberofdaysforwhichthepaymentinlieuofnoticehasbeenmade.Theadvancenoticeperiodisnotapplicablewhentheemployerdismissesanemployee under the probationary period, withinfourteendaysafterthedateofthecommencementoftheprobationaryperiod.



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iv. worKing conditions 1. minimum worKing conditionsAn employer who regularly employs 10 or moreemployees per workplace is required to preparethe work rules in accordance with the LabourStandards Act. The work rules must containpertinentdetails relatingdirectlyand significantlyto the working conditions. The employer’s workrulesaretobesubmittedtothecompetentLabourStandards Inspection Office. An employmentcontract stipulating any working conditions thatfailtomeetthestandardsestablishedbytheworkruleswillbedeemedinvalid,andtheconventionaldirectives will supplant the nullified elements oftheagreement.Anemployermaynotchangetheworkrulesinanywaythatwoulddisadvantageitsemployees,withoutobtainingtheemployees’priorconsent, unless such modifications to the workrulesisconsideredreasonable.

2. salaryThe term ‘wages’ refers to any kind of paymentmade from an employer to its employees asremuneration for their work (e.g. wage, salary,allowanceandbonus).Wagesmustbepaidinfulldirectly totheemployeeand in theappropriatelydesignated currency.Anemployee’swages,otherthan extraordinary wages and bonuses, are paidperiodically(atleastonceamonthonaspecificallydesignateddate).

Inadditiontothenormalwage,workperformedonstatutoryholidaysandlate-nightwork(between10p.m.and5a.m.)requiresanextraallowance;thestatutoryholidayallowancemustbeat least35%of the normal hourly wage, while the late-nightworkallowancemustbeatleast25%ofthenormalhourlywage.

3. maximum worKing weeKGenerally,thestatutoryworkinghoursare8hoursperdayand40hoursperweek.Statutoryholidaysmust be granted once every week or four timesevery fourweeks.Designatedworkinghoursmaybe further decided within the statutory workinghours.

Flexible working hours arrangements arepermissible,subjecttocertainrequirementsunderthe Labour Standards Act. The variable workinghourssystem ispossiblebyproviding in theworkrules or labour-management agreements, thatthe employer may have its employees work inexcess of the statutory working hours, withoutpayingovertimeallowance,aslongastheaverageworking hours per week over a certain specificperiod does not exceed 8 hours per day or 40hours perweek. In addition, the flexibleworkinghourssystem ispossiblebyproviding in theworkrules and labour-management agreements, thatemployeeshavethediscretiontodeterminetheirstart and finish times under certain conditions.The discretionaryworking system can be appliedfor expert employees who possess special skills,or employees in a certain position that involvesengaging in planning, proposing, researching andanalysingmattersofbusinessoperations.

4. overtimeCompensationforovertimeworkofupto60hoursper month, must be at least 25% of the normalhourly wage and overtime work that exceeds60hourspermonth,mustbeat least50%of thenormalhourlywage.EmployeesinmanagerialandsupervisorypositionsasdefinedundertheLabourStandardsActareexemptfromtheabovementioned




overtimeregulations;however,thelate-nightworkallowanceisstillapplicable.

5. health and safety in the worKplace The Labour ContractAct has acknowledged in itswritten policy an employer’s obligation to takenecessarycare toensure thephysicalandmentalhealthandsafetyof itsemployees.The IndustrialSafetyandHealthAct,inconjunctionwiththeLabourStandardsAct,mandatesemployerstosecurethesafetyandhealthofemployees in theworkplace,as well as to facilitate the establishment of acomfortable working environment, by promotingcomprehensive and systematic countermeasuresconcerning thepreventionof industrialaccidents,takingmeasuresfortheestablishmentofstandardsfor hazard prevention, clarifying the safety andhealth management responsibility, and thepromotion of voluntary activities with a view toavertingindustrialaccidents.

a. employer’S oBliGation to provide a HealtHy and Safe workplaCe

Oneof thepredominantobligationsofemployersundertheIndustrialSafetyandHealthActconcernstheestablishmentofanorganisationforsafetyandhealthmanagement.ThisincludesappointmentofaGeneralSafetyandHealthManageranddesignatingsuchpersonwithultimateresponsibilityregardingsuchmatters.Inaddition,employersaretoappointrelevantofficerstosupporttheGeneralSafetyandHealthManager.Theseincludetheappointmentofanindustrialdoctor,theestablishmentofasafetyandhealthcommittee(iftheemployeremploys50regularemployeesormore),andtheappointmentof an operation chief (if the employees engagein work which requires prevention-control ofindustrialaccidents).

The Industrial Safety and Health Act furtherrequires employers to establish measures forpreventingdangers,risksandotherimpairmentstothehealthof itsemployees,aswellaspromotingsafetyandhealtheducationandfacilitatingmedicalexaminationsforemployees.

B. Complaint proCedUreS

No specific administrative complaint proceduresareprovidedforunderJapaneselawwithregardtohealth and safety in theworkplace. Nonetheless,the Labour Standards Inspection Offices acceptcomplaints concerning health and safety in theworkplace. However, in practice, they will notproceedtotheenforcementstageunlesstheyfindan infringementof the Labour StandardsAct andtheIndustrialSafetyandHealthAct.

C. proteCtion from retaliation

Under Japanese law, an employer is required toprotecttheprivacyofaconsulterandharasser incases involving harassment in the workplace. Anemployer is furtherprohibited fromthedismissalor mistreatment of employees who make aconsultation or cooperate with an investigationconcerning harassment. A complaint against theemployerconcerningharassment,shouldgenerallybemadeunderabreachofcontractorasanactionintortbasedontheCivilAct(1896).


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V. Anti-diSCriminAtiOn laws 1. brief description of Anti-diSCriminAtiOn lawsVarious protections exist with regards to anti-discriminationlawsinJapan,asoutlinedbelow.

TheLabourStandardsActprohibitsdiscriminationwith respect towages,workinghours orworkingconditions,byreasonofnationality,creedorsocialstatus.TheActfurtherstatesthatanemployershallnot engage in discriminatory treatment betweenmenandwomenwithrespecttowages.

The Equal Opportunity Act contains a generalprohibition on employers directly discriminatingagainstworkersonthebasisofgender inrelationto the allocation of duties, training, benefits,occupationalfunctioningandstatus,anddismissal.

TheChildCareandNursingCareActprohibitsthediscriminatoryofanyemployeewhoappliedfor,orutilised,childcareornursingcareleaveandothermeasuresunderthisAct.

The Employment Measures Act (1966) prohibitsdiscrimination based on age for hiring, althoughsomeexceptions forsettingagerequirementsareprovidedforintheAct.

TheActonthePromotionofEmploymentofPersonswithDisabilities(1960)generallyobligesemployersto hire employees with disabilities. Furthermore,theActprohibitsdiscriminatorytreatmentonthebasisofdisability.

The Labour Union Act prohibits disadvantageoustreatment of employees for activities pertainingto their involvement with labour unions. Suchactivities include, but are not limited to, being

a union member, attempts to join or organise alabourunion,orhavingperformedproperactivitiesofalabourunion.

2. extent of protection for employees with disabilitiesThe Equal Opportunity Act also contains aprohibitiononindirectdiscriminationonthebasisofgender.Forexample,thisincludesactsorpracticesthathavetheeffectofinadvertentlyplacingwomenat a distinct disadvantage, compared tomen. Anexception to this general principle exists if therearejustifiablereasonsforthedifferenceinconducttowards the individuals of different gender, suchas, for example, an employer chooses to requiretransferexperiencetootherpartsofthebusiness/locations as a condition for promotion. However,an employer is not required to grant the sameconditions to all employees. Therefore, disparatetreatment of male and female employees (e.g.genderdifferences)couldbeconsidered impartial(non-discriminatory)iftherearejustifiablereasonsfordoingso.

3. protections against harassmentSexual harassment can be defined as: (i) anydisadvantages in the employee’s workingconditions (such as dismissal, demotion or salarycuts)byreasonoftheirresponsetosexualspeechandbehaviorattheworkplace;or(ii)anyharmintheirworkingenvironmentbyreasonofexposuretosexualspeechandbehavior.

The EqualOpportunityAct requires employers tointroducemeasurestopreventsexualharassment,




including amandate to clarify the relevantpolicyand informandeducate theiremployeesonsuchpolicies. Furthermore, employers must establishconsultationdeskstorespondtocomplaints fromemployees; facilitating a prompt and appropriateinvestigation that can be carried out effectivelyupon learning of incidents of sexual harassment;institutingmeasurestoprotecttheprivacyofboththeaccuserand theaccused; andprohibiting thedismissalormistreatmentofworkerswhoconsultor cooperate with a sexual harassment-relatedinvestigation.

The recent amendmentof the EqualOpportunityAct, which came into force in June 2020,strengthenssuchmeasuresandcompelsemployersto try and cooperate with other companies (e.g.through interviewsand/or investigations) incaseswhere an employee of the company has sexuallyharassed employees of the other company, inorder to enhance the effectiveness of the othercompany’s employment measures and preventpotential sexual harassment incidents stemmingfromtheinteractionbetweencompaniesandtheiremployees.

Power harassment can be defined as damagingbehavior, which takes advantage of a superiorposition in a working relationship. The recentamendments on the Act on ComprehensivePromotion of Labour Policies, which came intoforceinJune2020,requiresemployerstointroducemeasurestopreventpowerharassment.Employersmustestablishconsultationprocedurestopreventpower harassment. The law also prohibits thedismissalormistreatmentofworkerswhomakeacomplaintregardingpowerharassment.

Furthermore,anyemployerthatdoesnotabidebytherecommendations for improvementdiscussedabove,couldbepubliclynamed.

4. employer’s obligation to provide reasonable accommodations The Act on the Promotion of Employment ofPersons with Disabilities obliges employers withmore than 45.5 employees, to hire employees

withdisabilitiesandtoincreasetherepresentationof itsemployeeswithdisabilitiestoreachat least2.2% of their workforce. This representationpercentageofemployeeswithdisabilitiesisduetoincreaseto2.3% inJanuary2021.Employerswhodonotachievethestatutoryemploymentratefordisabilitiesshallbesubjecttoapaymentofcertainlevies, in proportion to the difference betweentheir actual employment rate and the statutoryemploymentrate.

Furthermore, the Act on the Promotion ofEmployment of Persons with Disabilitiesprohibits discriminatory treatment on the basisof disability. The Act also requires employers toprovide reasonable accommodations. Employersare obliged to make best efforts with regardsto these prohibitions and obligations. Furtherdetailsareprovidedundertherelevantguidelines.Reasonable accommodations as required underthe Act, is defined as necessary and appropriatemodificationsandadjustmentsthatdonotimposea disproportionate or undue burden (which islargely equivalent to the definition of reasonableaccommodations as provided by the Conventionon the Rights of Persons with Disabilities). If apersonwithadisability expressesan intention toremove social barriers, the employer is requiredto undertake the appropriate consideration (i.e.a positive action of change or adjustment) withregards to providing services and/or acceptinghim/herasanemployee,albeitdependingonthecircumstances as well as the individual disabilitycharacteristicsoftheemployee,andtotheextentthatthereisnodisproportionateorundueburdenimposed against the employer. An employer isalso required to establish a consultation systemto respond todisabledemployeesand toprotecttheprivacyofaconsulter.Anemployer is furtherprohibited from the dismissal or mistreatmentof employees who request a consultation foraccommodations.

There are no mandatory obligations imposed onemployerstoprovideaccommodationswithregardtoreligiouspractices.

5. remediesAn employee may bring a discrimination claimagainst the employer by filing a civil lawsuitbefore the appropriate court, or through a



petition for proceedings before the appropriatelabour tribunal. The employee is entitled to seeka declaratory judgment determining that thediscriminatory treatment is null and void, or anorder of compensation of damages due to thediscriminatory treatment. An employeemay alsomake a request for administrative mediation atthe prefectural labour bureau, with regards tothe discriminatory treatment. It is also possiblefor an employee to report an employer’s equalpaypractice to theappropriate Labour StandardsInspection Office, which may commence aninvestigation and possibly a criminal prosecution,dependingonthediscriminationclaim.Inpractice,however,acriminalprosecutionisextremelyrare.

Furthermore, the directors of Prefectural LabourOffices can provide employers with advice,guidanceandrecommendationswithregardtothediscriminatory treatment. The directors can alsorequire employers to provide reports on issuescoveredbytheEqualOpportunityAct.

6. other requirements Japanese law does not impose any (generally)applicable laws or regulations that require anemployer to disclose, report on, or take positiveactioninordertoensureequality.However,thereisarequirementforemployerstoemployacertainnumberofworkerswithdisabilitiesandto reporttheir workforce statistics to the government,annually.



vi. pay equity laws 1. extent of protection The Reform Act amended the Part-Time/Fixed-Term Employment Act and the Worker DispatchAct, which came into effect in April 2020, hasintroducedtherequirementforworkerstoreceivefairandequal treatment, irrespectiveof their jobstatus.Furthermore,theActprohibitsanyirrationaldisparity between ‘regular’ and ‘non-regular’employees.

With regards to part-time/fixed-term employees,anemployerisprohibitedfromdifferentiatingthebase salary, bonus and other benefits, in such amannerthatthereexistsanunreasonabledifferencebetween part-time/fixed-term employeesand regular employees. The reasonablenessis determined based on: (i) the content of theassignmentsandthelevelofresponsibilitythereof;(ii) the scope of possible changes of such dutiesandtheposition;and(iii)otherrelevantfactors,asmaybedeemedappropriateinlightofthenatureofsuchtreatment.

An employer is prohibited from discriminatingagainst part-time/fixed-term employees, ascompared to regular employees, with regards totheirdutiesandtheirpositions,forthesolereasonof being categorised as part-time/fixed-termemployees. An employer is required to provideopportunities to utilise welfare facilities that areavailabletoitsregularemployees,anddesignatedunderthegovernmentordinance,toitspart-time/fixed-term employees. An employer is obliged toexplain to itspart-time/fixed-termemployees thecontentsandreasonsforanydifferentialtreatmentcompared to its regular employees. An employeris further prohibited from any disadvantageoustreatment of an employeewho requests such anexplanation.

Withregardstodispatchemployees,thedispatchingcompanyisobligedtoensuretheequalorbalancedtreatmentofdispatchedworkers,whereinthenon-dispatchedworkersaretreatedequallyorasaresult

ofsatisfyingtherequisiteconditions,affordingfairand equal treatment protections, in accordancewith the provisions established under a labour-managementagreement.Thedispatchingcompanyisobligedtoexplaintothedispatchemployeesthecontents of treatment and working conditions atthetimeofhiringandthecommencementofthedispatch.Furthermore,thedispatchingcompanyisalsorequiredtoexplaintothedispatchemployeesthecontentsandreasonsfordifferentialtreatmentwith the equivalent employees at the recipientcompany. The dispatching company is furtherprohibitedfromanydisadvantageoustreatmentofanemployeewhorequestssuchanexplanation.

TheguidelinescorrespondingtotheamendedAct,setoutthebasiccriteriaforsalariesandbenefits,education, training and welfare entitlements,togetherwithconcreteexamplesofreasonableandunreasonable treatment, differentiating betweenregularandnon-regularemployees.

2. remedies Anon-regularemployeemaybringaclaimagainstthe employer by filing a civil lawsuit before theappropriate court, or through a petition forproceedingsbeforetheappropriatelabourtribunal.

The amended Act developed administrativeAlternative Dispute Resolution (administrativeADR) mechanisms to cover situations of equaltreatment of non-regular employees (part-time/fixed-term employees and dispatch employees),in order to provide assistance to non-regularemployees to settle disputes in a prompt andefficientmanner,andwithout the involvementofcourtproceedings.Furthermore,theamendedActallows for the relevant administrative authoritiesto issue administrative advice, guidance and/or recommendations against the employerwith regards to the treatment of the fixed-termemployees, in addition to that of the part-timeemployeesandthedispatchemployees.



Non-complianceofadministrativeadvice,guidanceand/or recommendations may be subject topublication.Anemployerisfurtherprohibitedfromany disadvantageous treatment of an employeewhomakesarequestforsuchadministrativeADRand/oradministrativemeasures.

The amended Act does not impose statutorysanctions or penalties with regards to non-compliance of equal treatment of non-regularemployees. The amended Act only providesfor the administrative advice, guidance and/orrecommendations.

3. enforcement/litigation To date, we do not have any noteworthyenforcementpronouncementsorongoinglitigationrelatingtotheequalpaypracticeswhichcameintoforceinApril2020,toreport.

4. other requirementsJapanese law does not impose upon employers,any mandatory obligations to undertake positiveactionswithrespecttopaydiscrimination,genderequalityorequalpay.


2021-2022 / Japan

1. restrictions in the worKplaceAn employer can restrict the employee’s use ofInternet and/or social media in the workplaceduringworking hours. This is because employeesare obliged to devote themselves fully to theirdutiesattheworkplace,duringworkinghours.

a. Can tHe employer monitor, aCCeSS, review tHe employee’S eleCtroniC CommUniCationS?

Work email accounts and computer systems inthe workplace belong to the employer and maythereforebemonitored,accessedandreviewedbytheemployerunder Japanese law.However, suchaccess, ifpermitted, ispossibleonly so faras thefollowing conditions are met before such accessis sought: (i) the employer expressly disclosesthe purpose of monitoring to the employees inquestion in advance; (ii) the employer providesthe employees in question with the relevantand applicable company rules; (iii) the employeridentifiesthepersonresponsibleforimplementingthemonitoring;and(iv)drawsthecompanyrulesstipulating the implementationofmonitoringandannouncesthemtotheemployees.

The monitoring shall be subject to an audit inorder to confirm that it is properly implementedas monitoring, accessing and reviewing theemployees’ electronic communications wouldbe regarded as an acquisition of the employees’personalinformation.

2. employee’s use of social media to disparage the employer or divulge confidential informationWhen an employee disparages the employer ordivulgesconfidentialinformationviasocialmedia,the possible remedies available to the employerincludearequesttotheemployeeorthewebsiteadministrator, to have the content removed asexpeditiously as possible; and then considerwhethertotakelegaland/ordisciplinaryaction(s)against the employee for such conduct. Theemployerneedstoevaluate ifanyofthegroundsfor disciplinary action and/or legal action ismet.The employer further needs to evaluatewhethertobringacriminalcomplaintfordefamation,claimdamages in tort and/or for breach of contractualobligations.


vii. social media and data privacy


2021-2022 / Japan

1. grounds for termination Japanese law requires that the terminationof a regular employment relationship shall beconsidered objectively, deemed reasonable andappropriateuponsocialconvention,whichisreadrigidlyinlightofJapanesejudicialprecedent.Typicalgrounds for termination include the following: (i)an employee’s inability to provide labour due toinjury, disability, illness or permanent damage,significantlypoorperformance,orlossofthetrustrelationshipduetomaterialfraudinanapplicationforemployment;(ii)breachofworkresponsibilitiesandduties,orders,orworkplacedisciplines,policiesandinternalrules;and(iii)lossofjobresponsibility,redundancyduetobusinessdownsising,economicreasons, or corporate dissolution. All grounds fordismissalshallbesetoutintheworkrulesorintheemploymentcontract.

Termination due to economic reasons such asredundancies is rigorously restricted in Japan.Japanese judicial precedent has established thepractice that the following four factors shouldbemet: (a) necessity of decreasing the number ofemployees;(b)necessityofadoptingthe“unilateralterminationofemploymentcontract”methodasameans of employment adjustment; (c) adequateselection of the employees whose employmentcontractsare tobe terminated;and (d)adequacyof the termination procedure. Importantly, withregardsto(b),itrequiresthattheemployerfulfillsitsbesteffortobligationtoavoidthetermination.

With respect to anemployment contractwith anindefiniteterm,theterminationduetoredundancyis considered to be a last resort under Japaneselabourlaw,andisonlypermittedwhereemployershavenochoicebuttoterminatetheemployment

of their employees. The management of theemployermust havemade a best effort to avoidthe termination. This means that the employersshoulduseanyavailablemeanswithinthecompanypriortotheterminationtosatisfytheirbesteffortobligationtoavoidtermination.This includes,butis not limited to, reduction of compensation fordirectors, curbing new hires, soliciting voluntaryretirement, encouraging early retirement,personnelrelocationandemployeetransfers.

Withregardstofixed-termemploymentcontracts,an employer may not dismiss employees untilthe expiration of the employment term thereof,without “unavoidable reasons”. The “unavoidablereasons” are read narrowly and are consideredto bemore rigid than the objectively reasonablerequirement, in the case of an indefinite termemploymentcontract.

Furthermore, an employer shall not dismiss anemployee during a period of absence fromworkformedicaltreatmentwithrespecttowork-relatedinjuries or illnesses. Also, an employer shall notdismissanemployeewithin30daysthereafter. Inaddition,anemployershallnotdismissanywomanduringaperiodofabsencefromworkbeforeandafterchildbirth,norwithin30daysthereafter.

2. individual dismissalsUnder Japanese law, all dismissals are deemedindividualdismissals.

a. iS SeveranCe pay reQUired?

UnderJapaneselaw,thereisnostatutoryobligationto pay severance allowance upon termination,exceptincircumstanceswhenpaymentisinlieuofnotice.


viii. termination of employment contracts



3. separation agreements

a. iS a Separation aGreement reQUired or ConSidered BeSt praCtiCe?

Generally, any employment contract may beterminateduponagreementbetweenanemployerand employee. Since dismissals are severelyrestricted inJapan,solicitingvoluntaryretirementisacommonpracticeusedtoreachanagreementwithanemployee,terminatinghis/heremploymentcontract.

B. wHat are tHe Standard proviSionS of a Separation aGreement?

Solicitation of voluntary retirement is commonlyofferedwithanamount topaysalariesof severalmonths to one year, as the special retirementallowance. The amount of special retirementallowance is not governed by Japanese lawhowever, but rather is agreed upon between theemployee and employer, and in practice, wouldnecessarily varydependingon thecircumstances.Furthermore, in the case of redundancy, theconditionssurroundingtheapplicationforvoluntaryretirementshouldbefairandreasonable.Inotherwords,issueswouldariseifthetargetedemployeeshadnochoicebuttoapplyforvoluntaryretirementand/or if such conditions couldbedeemed tobetargetingonlyspecificemployees.

C. doeS tHe aGe of tHe employee make a differenCe?

Theoretically, the age of the employee does notmakeasubstantialdifference.Inpracticehowever,age could play a significant role, since separationagreements are subject to employer-employeenegotiations.

d. are tHere additional proviSionS to ConSider?

Additionally, consideration should be given toemployingrestrictivecovenants.

4. remedies for employee seeKing to challenge wrongful terminationAnemployeemaybringaclaimagainsttheemployerandseekadeclaratoryjudgmentdeterminingthattheirdismissal isnullandvoid.Anemployeemayalso bring a claim for a decision confirming his/her position as an employee, by filing a petitionbeforethelabourtribunalforthecommencementoflabourtribunalproceedingsorbeforethecourts,with a request for provisional injunction(s) or bybringingaclaim/disputeforlitigation.Ifadismissalis found to be null and void, the employee mayreturntothecompany.

Generally,anemployeemayalsodemandpaymentoftheemployee’swithheldwagesorsalaryfortheperiodsincethedateofdismissaluptothetimeofjudgment,withinterest.Aclaimseekingreversalofadismissalisnotbarredbythestatuteoflimitation.However,ingeneral,afive-yearstatuteoflimitationperiod applies to claims for wages, retirementallowances andother labour-relatedentitlementsundertheLabourStandardsAct.

5. whistleblower laws TheWhistleblowerProtectionAct (2004)protectswhistleblowerswhocomeforwardwithinformationregarding criminal activity in the workplacerelevanttolife,body,property,andotherinterestsofcitizens,thathasoccurredorisabouttooccur.Consequently, employers are required to appointanappropriatepointofcontactwithinthecompany,whoistobelocatedeitherwithinthepremisesofa particular workplace, or at an outside locationwhere the relevant administrative organ of the



companyoperates,toreceiveandrespondtoanyoftheabovementionedconcernsasmayberaisedby an employeewhose intentions are lawful andtrustworthy. An employer is prohibited from anydisadvantageous treatment of the whistlebloweronthebasisofsuchwhistleblowing.Furthermore,under the Whistleblower Protection Act, adismissalofthewhistlebloweronsuchgroundswillbedeclarednullandvoid.


2021-2022 / Japan

1. definition of restrictive covenantsRestrictive covenants are not legally definedunder Japanese law. However, such covenantsareallowedasconcomitantobligationsundertheprincipleofgoodfaitharisingfromtheemploymentcontractduringthetermofemployment,andevenafter termination of the employment contract.Generally,restrictivecovenantshavetobevalidtotheextentnecessaryandreasonable,asprovidedforintheworkrulesandregulationsorthespecificemploymentcontract.

2. types of restrictive covenants

A. non-compete cLAuses

During the term of employment, an employeeis prohibited from competing with his/heremployer. Non-compete clauses are consideredas an employee’s concomitant obligation underthe principle of good faith arising from theemployment contract. Regarding the validity ofnon-compete clauses, after termination of theemploymentcontract,thecourtshaveatendencyto judge such clauses very strictly, in accordancewiththeprecedentrecentlyestablished.Therefore,the scope of the non-compete obligation shouldbe reasonably limited and restricted to thoseobligationswhichareactuallynecessarytoprotectthecompany’sinterests.

The factors utilised in evaluating the validityof a non-compete clause include, but are notlimited to, the following items: (i) job positionand responsibility; (ii) scope (e.g., type, region)of the services provided; (iii) confidentiality and

importanceoftheservicesprovided;(iv)durationof the non-compete obligation following thetermination; and (v) alternative compensation.Accordingly,non-competeclausesafterterminationof an employment contractwould be consideredvalid only if the scope of services is reasonablylimited, and the confidentiality and importanceof the services is deemed to be extremely high.Furthermore,non-compete clauses that are likelytobeconsideredvalidbythecourts,arethose inwhich the term of the non-compete obligationsis within one year, and compensation for suchobligationsisprovidedinareasonablemanner.

b. non-soLicitAtion of CUStomerS

It is possible to compel an employee to refrainfromsolicitingcustomersafterterminationof theemployment contract, by providing such a clausein thework rules or the specific agreement. Thefactors used to consider the validity of clausesregarding the non-solicitation of customers, arebasically the same as those for non-competitionclauses.

c. non-soLicitAtion of employeeS

It is possible to require an employee to refrainfromsolicitingformeremployeesafterterminationof the employment contract, by providing such aclauseintheworkrulesorthespecificemploymentagreement.Thefactorsusedtoconsiderthevalidityofclausesregardingthenon-solicitationofformeremployees,arebasicallythesameasthosefornon-competitionclauses.


ix. restrictive covenants



3. enforcement of reStriCtiVe COVenAntS – process and remediesUnderJapanese law,therearetwotypesofcourtactionsthatarepossibleagainstabreachofthenon-compete clauses and non-solicitation obligationsafter termination: (i) demanding an injunctionand (ii) filing a claim for damages. With regardsto an injunctiondemand, the plaintiff is requiredto prove that the company’s business profits, inactuality, have already been infringed or are inserious danger of being infringed. With regardstoaclaimfordamages,theplaintiffisrequiredtoprovetheoccurrenceofactualdamages,aswellasa causal connectionbetween thebreach and theactualdamagescaused.

4. use and limitations of garden leave Garden leave is a toolbywhichanemployer canprevent departing employees from performingtheirregularduties.Typically,theemployeewillbeprevented fromattending theworkplace,butwillstillreceivefullpay.Thishastheeffectofrestrictingthe employee’s access to customers, clients, staffand information, and hampers their ability towork for a competitor. If an employer wishes toput an employee on garden leave theremust, inmost circumstances, be an express clause in theemployment contract permitting theemployer todoso.Otherwise,theemployercouldbeviolatingtheemployee’simpliedrighttoworkandthereforebeinbreachofcontract.



x. transfer of undertaKings 1. employees’ rights in case of a transfer of undertaKingInasharetransfer,therewillbenochangeintheemployment conditions and status; therefore, notransfer of employees’ rights and obligationswilltakeplace.

In a merger, regardless of whether it occursthrough absorption or consolidation, any rightsand obligations under the employment contractssubject to the merger, will be automatically andcomprehensively transferred to the post-mergerentity.

Inacorporatesplit,regardlessofwhetheritoccursthroughabsorptionorincorporation,theemployeesmainly subject to the transferred business anddefined as such in the corporate split plan oragreement, will be automatically transferred.Therefore, any rights and obligations thereunderwill be automatically and comprehensivelytransferred.

An employee who is mainly subject to thetransferred business, but is not defined in thecorporate split plan or agreement, has the rightto raise an objection, with the result that theemployeewillbesubsequentlytransferred.

Adversely,anemployeewhoisnotmainlysubjectto the transferred business, however defined inthecorporatesplitplanoragreement,hasarightto raise an objection, with the result that theemployeewillnotbesubsequentlytransferred.Theemploymentcontractswhicharenottransferredtothesuccessorremainwiththepredecessor,andthegeneralrulesoncollectivedismissalsapply.

2. requirements for predecessor and successor partiesIn a business transfer, through an asset transfer,employees will not be automatically transferred.Although the buyer and the seller may agree toincludeemploymentcontractsinthebusinesstobesold, if however, anemployee refuses to consenttothetransferofhis/heremploymentcontract,theemploymentcontractwillnotbetransferred.Thoseemploymentcontractswhicharenottransferredtothesuccessor,remainwiththepredecessorandthegeneralrulesoncollectivedismissalsapply.



xi. trade unions and employers associations 1. brief description of employees’ and employers’ associations The Labour Union Act defines a “labour union”asorganisationsor federationsofunions, formedvoluntarilybyandcomposedmainlyofworkers.Themainpurposeofsuchlabourunionsistomaintainand improve working conditions and raise theeconomicstatusoftheworkers.Anyorganisationorfederation isexcluded from“labourunion”undertheAct,ifanyofthefollowingconditionsaremet:(i)ifitallowsfortheparticipationofindividualswhorepresentthe interestsof theemployer, includingdirectors and workers in supervisory positions;(ii) if it receives financial assistance from theemployertopayfortheorganisation’soperationalexpenditures; (iii) if its purposes are confined tomutual aid services or other welfare services; or(iv)ifitspurposesareprincipallypoliticalorsocialmovements.

Dominant majority unions in Japan are deemedenterprise unions. These are organised at eachcompanyorgrouplevel,andwhichonlyrepresentemployeesthereof.However,consolidatedunionsallowanyonetojoin,includingthoseindividualswhoarebeyondasinglecompany.Theunionisationratein Japan has been considerably and continuouslydeclining.Thisratehasbeenlessthan20%inthelastfifteenyears.

Alabourunionisnotrequiredtofileanapplicationof any kind with authorities in order to berecognisedas a “labourunion”under the LabourUnion Act. However, labour unions are requiredto submit evidence to prove that the above-mentioned requirements have been met whenseeking toparticipate in theproceduresprovided

forundertheAct,oralternatively,whenpursuingremedies afforded therein, including cases thatinvolve filing amotion for unfair labour practicesbeforetheLabourRelationsCommission.

2. rights and importance of trade unionsA labour union organisation and its activitiesare guaranteed as basic labour rights by theConstitutionandtheLabourUnionAct,irrespectiveofsizeandunionisationrate.Alabourunionhastheright to initiate a collective bargaining request totheemployeraswellastogoonstrike.Mandatorybargaining is within the employer’s control. Suchbargaining concerns working conditions, othertreatment of union members and managementof collective labour relations. An employer has aduty to accept such a request for bargaining andnegotiatewiththelabourunioningoodfaith.

The following types of activities by employersare prohibited as unfair labour practices: (i)disadvantageous treatment by reason of being aunionmember, having tried to join or organise alabourunion,orhavingperformedproperactivitiesofalabourunion;(ii)refusaltobargaincollectivelywithout justifiable reasons; (iii) dominance andinterferenceinunionadministrationbycontrollingor interferingwith the formationormanagementof a labour union, or giving financial assistanceto pay the labour union’s operational expenses;or (iv) disadvantageous treatment by reason ofhaving filed a motion with the Labour RelationsCommission.

In addition, the employer is required to executea labour-management agreement with a labourunion representing a majority of the employees



at the workplace, for certain statutory mattersdeemed mandatory, including, but not limitedto,matters concerning (i) requests foremployeesto work overtime and/or on public holidays; (ii)adopting an irregular working hours system; and(iii)deductingcertainexpenses fromsalariespaidto employees. An employer is also required toconsider theopinionof themajorityunion,whenprovidingoramendingtheworkrules.

3. types of representationLabour unions are private voluntary associations.Therefore, labour unions have the ability anddiscretiontoorganiseandoperatetheirrespectiveunionsastheyseefit.Also,alabourunionisaself-governingassociation.Furthermore,workscouncilsdonotexistinJapan.

a. nUmBer of repreSentativeS

There isnostatutory requirementconcerning therepresentation of labour unions under Japaneselaw.

B. appointment of repreSentativeS

There isnostatutory requirementconcerning therepresentation of labour unions under Japaneselaw.

4. tasKs and obligations of representativesThemain task of the union representatives is tocommunicatewiththeemployeronbehalfof theunion, and to provide their opinion or decisionin response to the employer’s proposal(s). Ifthereisa labourunionrepresentingamajorityofemployees at the workplace, the representativeof such aunion should take a role as a signatoryof the labour-managementagreement for certainmandatory statutory provisions, such as (i)requestingthatemployeesworkovertimeandonpublic holidays; (ii) adopting an irregularworking

hourssystem;(iii)deductingcertainexpensesfromsalariespaidtoemployees;and(iv)communicatingtheunion’sopinionontheworkplacerules,whensuchruleshavebeenprovidedand/oramendedbytheemployer.

5. employees’ representation in managementIn principle, employee representation inmanagement is not a concept recognised underJapaneselaw.

6. other types of employee representative bodies If a labour union has not been established or isotherwisenon-existent, theemployer is required,in such cases, to execute a labour-managementagreementwiththeemployees’designatedliaisonofficer, who has been charged with representingamajorityof theemployeesat theworkplace, inconnection with specific mandates as prescribedby law (see above).An employer is also requiredto consider the opinion of the employees’representative, when providing or amending theworkrules.



xii. employee benefits 1. social securityTherearetwoseparatesystemsconcerningsocialsecurity in Japan. Both of these systems are runbytheJapanesegovernment.Thesystemsare: (i)the social insurance schemes (i.e. the employeepension insurance and the employee healthinsurance), and (ii) the labour insurance schemes(i.e.theworkers’accidentcompensationinsuranceandtheunemploymentinsurance).

2. healthcare and insurancesSocial insurance schemes are designed to securethe life of workers by paying income-basedcontributions in the case of old age, disability ordeath.Anemployerthatisacorporation,oronethatisasoleproprietorhiringfiveormoreemployees,hasalegalobligationtoprovideitsemployeeswiththeemployeepensioninsuranceandtheemployeehealthinsurance.

Labour insurance schemeshavebeenestablishedinanefforttosecuretheemploymentofworkerswith jobs, and to pay unemployed workersunemploymentandotherbenefits.Thesebenefitspaidtounemployedworkersareforthepurposeofstabilisingtheirlifeandpromotingreemployment.Furthermore, all employers are obliged toprovide employees with the workers’ accidentcompensation insurance and the unemploymentinsurance. The benefits of the social insuranceand labour insurance schemes are covered bythemandatorycontributionspaidbyworkersandemployers. A worker employed in Japan will beinsured,regardlessofwhetherornottheworkerisaJapanesenational.

3. required leave

a. HolidayS and annUal leave

Whilethestatutoryholidaysmustbegrantedonceevery week or four times every four weeks, it iscommon practice to provide holidays in additionthereto (e.g. Saturdays, Sundays, national publicholidays).

Under theLabourStandardsAct,employersmustgrant paid annual leave to employees who havebeen employed continuously for 6 months ormore. The employee must have attended workforat least80%ofthescheduledworkingdays inthepreviousfiscalyeartoreceivethepaidannualleave. The statutory minimum number of daysof paid annual leave depends on the employee’slengthofcontinuousservice:

•6 months of service = 10 days of paid annualleave

•1yearand6months=11days•2yearsand6months=12days•3yearsand6months=14days•4yearsand6months=16days•5yearsand6months=18days•6yearsand6monthsormore=20days

Theunusedpaidannualleavecanbecarriedforwardtothenextyear.Generally,paidannualleavemaybetakeninfulldayunits.However,employersmayallowtheemployeestotakeleaveinhalfdayunits.Itisalsoallowedtograntpaidannualleaveonanhourlybasisbyexecutingthelabour-managementagreement with such a provision. However, thetotal amount of days of such paid annual leaveis limited to no more than 5 days. Furthermore,employers areobliged toensure theuseby theiremployeesofat least5daysofpaidannual leaveperyear.



B. maternity and paternity leave

A pregnant employee can take up to six weeks(or 14 weeks in the case of multiple fetuses) ofmaternityleavebeforechildbirth,andeightweeksafterchildbirth,undertheChildCareandNursingCare Act. Furthermore, employers shall not havea woman work within 8 weeks after childbirth.However,inthecasewheresuchawomanhassorequested to work; provided, that 6 weeks havepassedsincechildbirth,andtheworkactivitiestobeperformedaresuchthatadoctorhasapprovedas having no adverse effect on her, then this Actshall not prevent an employer from having thewomanreturntowork.

In addition, an employee (regardless of gender)who has been employed for at least one year ormore,isentitledtotakechildcareleaveforachildagedlessthanoneyear(oruntilthechildbecomesoneyearandtwomonthsold,oneandahalfyearsold, or two years old). This is subject to certainconditions respectively, and does not includecertainemployees, suchas thosewithfixed-termemployment that would not continue after thechildturnsoneandahalfyearsold.Moreover,theemployerisnotobligedtopaytheemployeeduringmaternityleaveandchildcareleave.

C. SiCkneSS and diSaBility leave

While there is no legislation concerning sick ordisability leave arising from employment, manyemployersimplementtheirownrulesregardingsickleaveand/orpaymentduringperiodsof sickness.The employer may settle the term of sick leavewhere an employee is suspended. Furthermore,thismaybecomeacauseforautomaticterminationiftheemployeedoesnotrecoverbeforethetermofsickleaveexpires.Astoemployee’sinjury,sicknessand disability due to employment, the IndustrialAccident Compensation Insurance Act covers alargepartofthecompensation.

d. any otHer reQUired or typiCally provided leave Nursing Care Leave: Under the Child Care andNursing Care Act, an employee who has beenemployed for at least one year or more and isnursing a family member who requires nursing,is entitled to take nursing care leave for 93 daysin totalper familymember.Thisdoesnot includecertainemployees,suchasthoseunderfixed-termemployment arrangements, whose employmentwouldcometoendwithin6monthsand93daysafter the scheduled commencement date ofnursing care leave. Furthermore, the employer isnot obliged to pay the employee during nursingcareleave.

4. pensions: mandatory and typically provided There are no mandatory pensions provided toemployeesinJapan.However,inpractice,anumberofcompanieshavevoluntarilystructuredavarietyof pension schemes including, but not limited to(i)definedpaymentplans,(ii)definedcontributionplans,and(iii)decrease/eliminateexistingpensionplans.

Furthermore, there are no statutory benefitsavailable to employees in Japan. However, inpractice, a number of companies have startedadopting a variety of incentive plans including,but not limited to, performance bonuses, shareoptions, profit sharing schemes and employeestockownershipplans.

TatsuoYamashimaSeniorPartner,atsumi & sakai [email protected]+81355012297

http://www.aplaw.jp


2021-2022 / Japan

Atsumi & Sakai is a multi-award-winning,independent Tokyo law firm, and one of the tenlargest full-servicefirms in Japan.Our labourandemploymentpracticegroupofferspracticaladviceto clients on allmatters regardingHR and labourrelations that both Japanese and internationalcompaniesface,includingtheresolutionoflabourdisputes and litigation before labour courts andtribunals.Atsumi& Sakai hasbeen recognised asa leadingfirmfor labourandemployment lawbyvarious legaldirectories, including,amongothers,Chambers,TheLegal500,BestLawyersandAsialawProfiles.

This memorandum has been provided by:

atsumi & sakaiFukokuSeimeiBldg.2-2-2Uchisaiwaicho,Chiyoda-ku100-0011Tokyo,JapanP+81355012111www.aplaw.jp

atsumi & saKai japan

ContaCt USFormoreinformationaboutL&EGlobal,oraninitialconsultation, please contact one of our memberfirmsorourcorporateoffice.We look forward tospeakingwithyou.

L&E GlobalAvenueLouise221B-1050,BrusselsBelgium+3226432633www.leglobal.org


http://www.aplaw.jphttp://www.leglobal.org


2021-2022 / Japan


Thispublicationmaynotdealwitheverytopicwithinitsscopenor cover every aspect of the topicswithwhich it deals. Itisnotdesigned toprovide legalorotheradvicewith regardtoanyspecificcase.Nothingstatedinthisdocumentshouldbe treated as an authoritative statement of the lawon anyparticular aspect or in any specific case. Action should notbetakenonthisdocumentalone.Forspecificadvice,pleasecontacta specialistatoneofourmemberfirmsor thefirmthatauthoredthispublication. L&EGlobal CVBA is a civil company under Belgian law thatcoordinates an alliance of independentmember firms. L&EGlobal does not provide client services of any kind. Suchservices are solely provided by the member firms in theirrespectivejurisdictions. Incertaincircumstances,L&EGlobalisusedasabrandorbusinessnameinrelationtoandbysomeorallofthememberfirms.L&EGlobalCVBAanditsmemberfirms are legally distinct and separate entities. They do nothave, and nothing contained herein, shall be construed toplacetheseentitiesintherelationshipofparents,subsidiaries,agents,partnersor jointventures.Nomemberfirm,northefirm which authored this publication, has any authority(actual, apparent, implied or otherwise) to bind L&EGlobalCVBAoranymemberfirm,inanymannerwhatsoever.

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