Reference

OECD regularly conducts comparative research on dismissal regulations in its member countries and analyses and ranks them by the strictness of dismissal regulations. According to 2019 research, Japan ranked 13th in terms of the least strict dismissal regulations among the 37 OECD member countries. The least strict countries included the US, Switzerland, Canada, etc., while Czech, Israel, and Portugal were among the strictest nations. The UK was 6th, Germany 16th, France 24th, and Sweden 27th, as a country with low strictness.

While the effective criteria for dismissal supported by the court are stringent in Japan, Japan has simple procedures and a short notice period for dismissal. These, coupled with the absence of a legalized monetary resolution system, were the reasons for Japan's higher ranking (or being less strict) compared with many continental European countries.

In Japan, the right of its labor unions to carry out their activities is guaranteed by law. Employers cannot employ a person on the condition that he/she does not join a union, and cannot cause any disadvantage to an employee because he/she is a union member. Furthermore, no company may refuse its labor union’s request for collective negotiations without due cause.

According to a survey by the Ministry of Health, Labour and Welfare, the unionization rate of Japan’s unions as of June 2022 was estimated to be 16.5%, a slight decrease from the previous year. By company size (private sector only), 39.6% of the workers at companies with 1,000 or more employees are unionized, 10.5% at companies with between 100 and 999 employees, and 0.8% at companies with less than 100 employees.

The term "Temporary worker" refers to a worker that enters into a labor contract with a temporary staffing agency (the company that temporarily places the worker), and who, under the orders of the agency, reports for work at a client company of that agency (i.e., a company that enters into a temporary worker placement contract with the agency, and then accepts temporary placement of the worker), and who performs duties under the orders of the client company.

Labor laws such as the Labor Standards Act, the Industrial Safety and Health Act, and the Equal Employment Opportunity Act apply to temporary workers. Companies that accept placement of temporary workers bear the responsibility of complying with the provisions of the Labor Standards Act pertaining to working hours, breaks and days off; those companies may have temporary workers work overtime within the scope allowed by the Labor Standards Act provided they enter into a labor agreement regarding workers' overtime with the agency that places the temporary worker. In this case, the temporary staffing agency bears the responsibility to pay increased rate of wages.

It is the temporary staffing agency's responsibility to ensure temporary workers' annual paid leave, and to supply the client company with a replacement worker if necessary while the original temporary worker is on annual paid leave. Furthermore, it is the temporary staffing agency rather than the client company that must take out labor insurance (Workers' Accident Compensation Insurance and Employment Insurance) and social insurance (Employees' Pension Insurance and Health Insurance) for the temporary worker and pay the appropriate premiums.

If a client company accepts illegal supply of temporary workers (exceeding period limitations, disguised contract, unauthorized supply service, etc.), a direct employment relationship is deemed to have been established between the client company and the temporary workers at the time of accepting such supply of temporary workers.

Labor and social security attorneys are human resource management experts with special nationally administered qualifications. As well as payroll accounting, they perform a range of services at companies' request, including:

(Performance of services covered by (1) and (3) by persons other than labor and social security attorneys in private practice, certified social insurance labor and social security attorney corporations, or attorneys is prohibited by law.)

SATOSHI NAGAURA, Labor and Social Security Attorney, Nagaura Personnel Management Office

Promotion Division, Innovation Department, JETRO