Lecture 3: Fixed-term labor legislation in Japan (Part 2)

February 24th, 2022 [No. 97-2021]

Professor SHIMADA Yoichi,
Faculty of Law, Waseda University

 

 

 

Fixed-term Labor Contracts in Japan

Lecture 3: Fixed-term labor legislation in Japan (Part 2)

 

5. Outline of fixed-term labor legislation (continued)

(3) Measures to be implemented for improvement of employment management for fixed-term workers

 The Part-Time Workers and Fixed-Term Workers Act aims to correct disparities in work conditions between part-time and fixed-time workers and workers with standard employment statuses (regular employees) (Article 1). With regard to disparities in work conditions with workers with standard employment statuses, it is necessary to provide equal and balanced treatment under certain conditions (explained later). In addition to this, employers are required to implement improvement and other measures in terms of employment management. The following is the explanation of the treatment and measures. (The measures are also implemented for part-time workers.)

 In regard to fixed-term employees, employers must endeavor to determine the amount of wages and provide educational training while making considerations for equalization between fixed-term workers and regular workers (regular employees) with standard employment statuses in keeping with their work content, work performance, motivations, abilities, experience, and other particulars (Articles 10 and 11). For fixed-term workers whose work content is the same as workers with standard employment statuses (“fixed-term worker with the same work content”), employers are required to provide educational training as necessary for their work (Article 11).

 In addition, fixed-term workers need to be provided with the opportunity to use facilities for boarding, resting rooms, and locker rooms as part of the welfare facilities used by workers with standard employment statuses (Article 12).

 Also, employers are required to either (i) make known to fixed-term workers the particulars concerning hiring if it is looking to hire someone as a worker with a standard employment status, (ii) provide fixed-term workers with an opportunity to apply for the assignment if it is looking to newly assign someone to a position as a worker with a standard employment status, or (iii) implement measures to promote conversion by establishing examination systems with the purpose of converting fixed-term workers into workers with standard employment statuses (Article 13).

 In addition, when hiring a fixed-term worker, employers must promptly explain to that fixed-term worker the details of the equal and balanced treatment with workers with standard employment statuses (explained later) and the above-mentioned measures, including the issuing of documents (Article 14, paragraph (1)). When there is a request from a fixed-term worker with regard to such measures, employers must provide explanations of the matters they considered when making decisions (Article 14, paragraph (2)).

(4) Regulation on termination of fixed-term labor contracts

1) Midterm dismissal: Dismissal during the term of a fixed-term labor contract requires justifiable reasons (Article 17, paragraph (1), of the Labor Contracts Act). In case of dismissal in a labor contract with no fixed term, objectively reasonable grounds and appropriateness in general social terms are required (Article 16 of the Labor Contracts Act); on the other hand, the requirement of justifiable reasons is a tighter restriction, and it is understood that, concretely speaking, justifiable reasons have to be so serious that the employer is unable to wait until the expiration of the contract term.

2) Nonrenewal (refusal of renewal) of a fixed-term labor contract: For the case of the nonrenewal of a fixed-term labor contract, the same restriction as the case of dismissal will be imposed if the contract has been practically equivalent to a labor contract with no fixed term and if there is rational expectation for contract renewal (Article 19 of the Labor Contracts Act). In the case where nonrenewal of a labor contract is illegal, a new fixed-term labor contract will be deemed to have been concluded. Therefore, in a lawsuit, the position as an employee will be confirmed. A rational expectation for contract renewal is accepted on the basis of the constancy of work contents and the involved parties’ speech, action, and recognition. Therefore, it is highly likely that for many of the current fixed-term labor contracts, the rational expectation for contract renewal will be accepted.

 With regard to a fixed-term labor contract that is rationally expected to be renewed, an employer may, upon the renewal of the contract, notify the fixed-term worker that the renewal for this current term will be the last renewal (provision of nonrenewal). With such a notification, the employer intends to eliminate the rational expectation for contract renewal in order to terminate the fixed-term labor contract. With regard to the provision of nonrenewal, a court precedent takes the extremely cautious stance as it virtually eliminates the rational expectation for contract renewal that is based on the principle of good faith in connection with the practically continuing contractual relationship with the unilateral measure implemented by the employer. Unless there is a circumstance, such as an abolition of the work for the relevant fixed-term labor contract, the provision of nonrenewal tends to be held invalid. On the other hand, in the case where a limitation on the number of contract renewals has been established upon the conclusion of a contract, and if it has been strictly observed, it is understood that establishment of a limit on the number of contract renewals is valid.

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