A couple of New Issues under Labour Laws of Japan

Under the labour laws of Japan, an employee is highly protected and the dismissal of the employee or the termination of employment is heavily restricted.
 
Recently, a couple of new issues have emerged concerning the dismissal and termination of an employee. The first of which is the notice of the definition of sexual harassment in the rules of employment of the employer in Japanese. Secondly, the deemed offer of employment by the company to the dispatched worker after the company hires him or her for more than three years from 30 September 2015.

Definition of Sexual Harassment in English
 
Sexual harassment is not accepted in Japanese society. The company doing business in Japan is obliged to prevent sexual harassment in the work place. The company normally sets the clear definition of the sexual harassment and the sanction of the sexual harassment shall be clearly prescribed in its rules of employment applicable to the employees of the company.
 
Sexual harassment is often defined as a sexual action by a male to a female intolerable to the female, such as showing pornographic materials to the female in the work place of the company. The ultimate sanction is dismissal from the company.
 
It seems easy for the company to fulfil its obligations. It is, however, actually very difficult for the company to fulfil its obligations. For example, it is acceptable in Japanese society for a senior male employee to have lunch with his junior female employee during the lunch time outside of the office. Sometimes it is assumed to be an important communication method. In that case, what if the male employee asks his junior to have lunch every day? How about drink or dinner after work outside of office? It is not easy to set the clear definition of the sexual harassment and therefore the definition in the rules of employment is necessarily vague. Remember, the employee may be dismissed in accordance with the rules of employment.
 
The dismissal is a capital sentence of the employee and therefore the employee will argue the validity of the dismissal. One of the main arguments of the employee is that he is not sufficiently notified by the company of the reasons for dismissal because the definition of the harassment for dismissal set by the rules of employment is too vague. This argument becomes even more powerful if the terms of the employment contract does not include an English translation.
 
The company argues that the terms of the employment contract are required to be submitted to the Labour Supervisory Office and that they should be written in Japanese. The company further argues that the employee should read Japanese as long as he or she is working in Japan.
 
An employee of a certain company would argue that his or her Japanese proficiency is not a prerequisite to work for the company even though the company is located in Japan. The employee’s argument is valid if he or she is an employee of the subsidiary of a global company doing business all over the world and the official language of the employee is English. In this case, the definition of sexual harassment in Japanese is not sufficient notice for the foreign employee. If the company does not have the English translation of the contractual definition of harassment, the dismissed employee must argue the lack of notice of the reasons for dismissal. To draft the precise English translation of an inevitably vague definition of the sexual harassment is critical for the company.

Deemed Offer of Employment to the Dispatched Worker
 
As mentioned above, it is not easy to dismiss or terminate the employment under the labour laws of Japan. It is, however, necessary for a company to hire a temporary employee to meet the urgent demand of the company. For example, if a company imports clothes from China and sells them in the Japanese market, they could sell the clothes only in the summer and winter bargaining seasons. The company may wish to hire temporary employees only in the bargaining seasons rather than all year round. The dispatched worker system is designated for the company which needs temporary workers for a certain period of time.
 
Under the dispatch system, a dispatched worker enters into an agreement with a worker dispatching company. Under the contract, a dispatched worker is expected to be dispatched in accordance with the instruction of the worker dispatching company to meet the temporary demand for a certain limited period.
 
As there is no employer-employee relationship between the company and the dispatched worker, the company is not required to keep the worker after the dispatched period agreed in the separate agreement. This method is very convenient for the worker dispatching company as it is possible for them to terminate the employment of the dispatched worker at any time. However, employers are more frequently abusing the worker dispatched system by hiring dispatched workers as a replacement for its permanent positions.
 
Although the position is intended to be permanent, they often hire dispatched workers for a short period of time and then renew the period over and again. If it is necessary, they terminate the dispatched period with the worker dispatching company. The dispatched worker in this case is substantially the employee of the company.
 
As a result, the Japanese Government has addressed the abuse of the worker dispatched system by setting a maximum period of three years, after which the onus is on the dispatched company to offer the permanent position to the dispatched employee. As expected, not many companies offered the permanent position to the dispatched worker, the dispatched worker filed a law suit against the company on the ground that the implied employment contract was created after the three years of the employment.
 
The courts of Japan, including the Supreme Court of Japan, did not easily accept the dispatched workers’ arguments. The Japanese Government, by reviewing the result of the disputes between the dispatched worker and the company, determined an offer of employment is deemed to be made by the company to the dispatched employee on the same terms and conditions of the worker dispatch on the date of the company hiring the dispatched employee for more than three years from 30 September 2015.
 
The remaining issue is a lack of clarification on the meaning of ‘the same terms and conditions of the worker dispatch’. The company argues that the same terms and conditions include the original short period and the client company may terminate the employment agreement after the short period of the employment is elapsed. The dispatched worker argues that the same terms and conditions do not include the original short period and the dispatched worker becomes the permanent worker of the dispatched company and the termination of the employment is strictly restricted. The issue has not resolved yet.

Conclusion
 
An employee is highly protected under the laws of Japan. A company may not dismiss its employee for the reasons of his sexual harassment against his female colleague unless the definition of the sexual harassment is clearly defined in the rules of employment of the company and his action or expression falls into the definition.
 
For an employee of the subsidiary of the global company, he is not required to understand the definition of sexual harassment in Japanese. He could argue that he is not sufficiently notified of the definition of sexual harassment or his action or expression does not fall into the definition of the sexual harassment if the definition is not specified in English.
 
An offer of employment is deemed to be made by the company to the dispatched employee on the same terms and conditions of the worker dispatch on the date of the company hiring the dispatched employee for more than three years from 30 September 2015. The issue remains that the company may terminate the dispatched worker after the original period of dispatch even though the company is deemed to offer the permanent job to the dispatched worker.
 
It is highly recommended for a company and an employee to appoint bilingual and experienced Japanese attorney, such as us, in the above case.

Kaoru Haraguchi, as an international lawyer, specializes in explaining laws and practical business to our foreign clients.

Kaoru Haraguchi with a strong sense of responsibility will tenaciously fight until the last victory, overcoming any kind of difficulties or challenges.

Additionally, Kaoru Haraguchi will flexibly correspond to the changes in society, not only expanding but also developing its professional field of expertise. Furthermore, recently, Kaoru Haraguchi has actively continued handling difficult and various matters from lawsuits, antitrust cases, and labor issues, developing new areas of specialties as a retained attorney of a world's leading steel manufacturing company. Most recently, he managed an international insolvency case, where he represented a first section-listed company of the Tokyo Stock Exchange.

Kaoru can be contacted on +81 (3) 6205-4404 or by email at info-haraguchi@haraguchi-law.com