ICLG - Employment & Labour Laws and Regulations - Japan Chapter covers common issues in employment and labour laws and regulations – terms and conditions of employment, employee representation and industrial relations, discrimination, maternity and family leave rights and business sales.
1.1 What are the main sources of employment law?
The two principal sources of employment law are the Labour Standards Act (the “LSA”) and its Enforcement Ordinance, both of which provide minimum standards for the terms and conditions of employment contracts. In addition, the Labour Union Act (the “LUA”) governs collective labour relationships, while the Labour Contract Law (the “LCL”) governs individual labour relationships by providing for the principles under which a labour contract is to be entered into or changed through voluntary negotiations between a worker and an employer. The LCL also governs other basic matters concerning labour contracts. Other important sources of employment law include the Industrial Safety and Health Act, the Employment Security Act, the Act on Improvement etc. of Employment Management for Part-Time and Fixed-Term Workers (the “Part-Time/Fixed-Term Employment Act”), and the Act for Securing the Proper Operation of Worker Dispatching Undertakings and Improved Working Conditions for Dispatched Workers (the “Temporary Staffing Services Law”).
In June 2018, the National Diet passed laws to amend employment regulations (including the LSA and the LCL) and improve the working environment, focusing mainly on the problems of long working hours and wage gaps between regular workers and non-regular workers (the so-called “Work-Style Reform Laws”). The main parts of these new laws came into force on April 1, 2019.
Some important court decisions also function as a source of law. The decisions of the higher courts, especially the Supreme Court, are seen as a source of law for lower courts, which usually hesitate to render judgments that contradict higher court rulings, as such judgments would likely be overruled at the higher courts.
1.2 What types of worker are protected by employment law? How are different types of worker distinguished?
The LSA defines a “worker” as someone who is employed at and receives wages from a business or office, regardless of the type of occupation, and a worker is protected by Japan’s employment law. Independent contractors or self-employed people who enter into an outsourcing contract with a company and certain company executives, such as board members and corporate officers, who can work at their own discretion, are not protected under employment law as they are not considered “workers”. The distinction between an independent contractor and a company executive on the one hand, and a worker protected by employment law on the other hand, should be made based on the person’s actual working conditions (not only by job title or the form or name of the contract) by taking into account various factors such as whether: (i) he/she has any discretion to refuse assignments; (ii) he/she is under someone’s control and should follow specific instructions regarding his/her work; (iii) the place and time for work are fixed; (iv) other persons are permitted to do the work; and (v) he/she is receiving wages in exchange for providing the work.
Workers who are protected by employment law can be classified into the following categories:
1.3 Do contracts of employment have to be in writing? If not, do employees have to be provided with specific information in writing?
An employment contract does not have to be in writing; an oral agreement for employment is effective. However, an employer is required to expressly provide certain key employment terms and conditions in writing to their workers. These key terms and conditions include matters concerning the:
1.4 Are any terms implied into contracts of employment?
The minimum standards set out in the LSA are implied into employment contracts with fixed-term workers (see question 1.2) if the contract is silent, or if it provides terms that are less favourable for the workers than the minimum standards set out in the LSA.
If a certain employment term is applied repeatedly and continuously for a long period of time, it is possible for that term to be implied into the employment contract on the basis of an implied agreement and general custom or practice.
In addition, under the LCL, a fixed-term employment contract may be deemed renewed: (i) if the status of the fixed-term employment contract is not substantively different from a non-fixed-term employment contract due to repeated renewals; or (ii) when the continuation of employment can reasonably be expected even after the expiration of the term of the fixed-term employment contract, unless there is a justifiable reason not to renew the fixed-term employment contract upon expiration and non-renewal is deemed to be socially acceptable.
1.5 Are any minimum employment terms and conditions set down by law that employers have to observe?
The LSA and its Enforcement Ordinance set down minimum employment terms and conditions, such as the following terms:
1.6 To what extent are terms and conditions of employment agreed through collective bargaining? Does bargaining usually take place at company or industry level?
As long as both the employer and the union (the collective bargaining parties) have the authority to agree on the subject terms and conditions, which must not be less favourable for the workers than the minimum standards set out in the LSA, they can agree on any terms and conditions during collective bargaining. In practice, collective bargaining agreements generally include major terms and conditions of employment such as wages and other benefits, days off, paid leave, notice periods, promotions, transfers and disciplinary procedures. The employer is not required to discuss or agree on matters concerning the company’s organisation and high-level management that are not directly related to employment conditions.
Collective bargaining usually takes place at the company or workplace level, but it can take place at the industry level as well.
1.7 Can employers require employees to split their working time between home and the workplace on a hybrid basis and if so, do they need to change employees’ terms and conditions of employment?
Yes, employers can require employees to split their working time between home and the workplace on a hybrid basis if employers change the terms and conditions of employment to adopt a “hybrid working” model, since they are required to expressly provide certain key employment terms and conditions in writing to their workers, including the place of work (please see question 1.3).
1.8 Do employees have a right to work remotely, either from home or elsewhere?
There are no laws or regulations that stipulate the employee’s right to work from home, and therefore, it could not be considered that the employees are entitled to work from home without any clear agreement (or stipulations in the work rules) with the employer. The “Guideline to promote the appropriate introduction and implementation of telework” published by the Ministry of Health, Labour and Welfare states that an employer should ensure that workers are not excluded from the eligibility to work from home because of differences of type of employment, such as a regular employee or non-regular employee.
2.1 What are the rules relating to trade union recognition?
The LUA defines “labour unions” as organisations or federations of unions formed voluntarily by and composed mainly of workers for the main purposes of maintaining and improving working conditions and raising the economic status of the workers; however, the following groups are not “labour unions”:
A union is not required to file any application with authorities to be recognised as a “labour union”, but it is required to file evidence with the Labour Relations Commission and demonstrate that all the requirements described above are satisfied when it takes legal action, including applications for examination of cases of unfair labour practice.
2.2 What rights do trade unions have?
The establishment of a labour union and its activities are guaranteed as basic labour rights by the Constitution of Japan and the LUA, which stipulates these rights in detail. A labour union has the right to request an employer to enter into collective bargaining on any issue, provided that the issue relates to the labour union itself or the status of a worker who is a member of the union, regardless of the number of members. An employer is required to accept such a request and faithfully negotiate with the labour union; the refusal of an employer to enter into collective bargaining without proper reason can be deemed as an unfair labour practice, which is prohibited by the LUA.
In addition, the following acts of an employer are prohibited as unfair practices:
An employer must hear the opinion of the labour union organised by a majority of the workers at a workplace concerning certain labour matters, including setting up or amending employment rules of the workplace.
Furthermore, a labour union has the right to act collectively, which includes the right to strike. The LUA gives workers who engage in proper and justifiable actions immunity from criminal and civil liabilities and protection from unfavourable treatments by their employer.
2.3 Are there any rules governing a trade union’s right to take industrial action?
Industrial actions (or labour dispute actions) should be taken “properly” in order to enjoy the protection of the LUA. The LUA provides that in no case should acts of violence be construed as justifiable acts of labour unions; however, it does not provide specific rules as to what constitutes proper industrial action. Generally, courts take into account the purpose and manner of an action in deciding whether or not it was proper.
With respect to procedural requirements, many labour unions are required to conduct a vote among their members before calling a strike under their constitutions, and prior notice of a strike is sometimes required by the collective bargaining agreement between the union and the employer; however, these are not statutory requirements.
2.4 Are employers required to set up works councils? If so, what are the main rights and responsibilities of such bodies? How are works council representatives chosen/appointed?
Employers are not required to set up works councils in Japan.
2.5 In what circumstances will a works council have co-determination rights, so that an employer is unable to proceed until it has obtained works council agreement to proposals?
This is not applicable, please see question 2.4.
2.6 How do the rights of trade unions and works councils interact?
This is not applicable, please see question 2.4.
2.7 Are employees entitled to representation at board level?
Workers have no statutory entitlement to representation at the board level.
3.1 Are employees protected against discrimination? If so, on what grounds is discrimination prohibited?
The LSA provides that employers must not use the nationality, creed or social status of any worker to discriminate against him/her with respect to wages, working hours or other working conditions. The LSA also provides for the principle of equal wages for men and women.
3.2 What types of discrimination are unlawful and in what circumstances?
In addition to the general rules under the LSA mentioned in question 3.1, other rules that prohibit discrimination include the following:
3.3 Are there any special rules relating to sexual harassment (such as mandatory training requirements)?
The Equal Employment Opportunity Act provides that employers are required to establish necessary measures in terms of employment management to give advice to workers and cope with any worker problems, and take other necessary measures so that workers do not suffer any disadvantage in their working conditions by reason of their responses to sexual harassment in the workplace or in their working environments. The measures employers are required to take under the Equal Employment Opportunity Act are more specifically explained in relevant guidelines issued by the government. In addition, according to an amendment to the Equal Employment Opportunity Act, which the National Diet passed in May 2019, any kind of mistreatment of workers who allege they have been victims of sexual harassment are prohibited.
3.4 Are there any defences to a discrimination claim?
Generally speaking, most of the rules explained in questions 3.1 and 3.2 do not require an employer to grant the same terms and conditions to all workers, and thus, if an employer successfully demonstrates that the alleged discriminatory treatment is based on justifiable grounds, the treatment may be deemed to not be discriminatory.
When a discriminatory act in question is carried out by one worker or more, and is not a company-wide problem, the court may find that the employer is not liable for the discriminatory conduct if the employer has taken adequate measures to prevent such discriminatory conduct.
3.5 How do employees enforce their discrimination rights? Can employers settle claims before or after they are initiated?
Workers have different ways of enforcing their discrimination rights depending on the situation. These ways include filing a civil lawsuit or an application for a labour tribunal proceeding, and requesting the court or labour tribunal to:
Employers can settle claims at any time before or after they are initiated.
3.6 What remedies are available to employees in successful discrimination claims?
Please see question 3.5.
3.7 Do “atypical” workers (such as those working part-time, on a fixed-term contract or as a temporary agency worker) have any additional protection?
Amendments to the Part-Time/Fixed-Term Employment Act came into effect on April 1, 2020, for large-sized employers, and on April 1, 2021, for small- and medium-sized employers. Under the amended Part-Time/Fixed-Term Employment Act, it is prohibited to set up unreasonable differences in treatment between regular employees and non-regular workers (i.e., part-time employees, fixed-term employees and dispatch workers) in the same company in terms of all kinds of treatment such as basic salary, bonus, allowances and leave. The “Guidelines for Prevention of Unreasonable Treatment against Part-Time Workers, Fixed-Term Workers and Dispatched Workers” and “Guidelines for the Measures, etc. concerning the Employment Management Improvement, etc. for Part-Time Workers and Fixed-Term Workers to Be Taken by Employers”, which were published on December 28, 2018, based on the Part-Time/Fixed-Term Employment Act, provides more detailed rules and examples of what kinds of differences in treatment are considered unreasonable.
In addition, non-regular employees may request their employer to explain differences in treatment between regular employees and non-regular workers and reasons for such differences, and an employer must provide such explanations upon a request from its non-regular employees.
3.8 Are there any specific rules or requirements in relation to whistleblowing/employees who raise concerns about corporate malpractice?
The Whistle-blower Protection Act (the “WPA”) stipulates the protection of whistleblowing. The word “whistleblowing” under this Act is stipulated as one satisfying all the following requirements:
A reportable fact includes:
The WPA restricts the dismissal, termination of dispatch and disadvantageous treatment to the whistleblowing workers in general, and such dismissal, termination of dispatch and disadvantageous treatment becomes null and void.
3.9 Are employers required to publish information about their gender, ethnicity or disability pay gap, or salary or other diversity information?
In accordance with the amendments to the Act on Promotion of Women’s Participation and Advancement in the Workplace enacted on July 8, 2023, companies with 301 or more employees are required to disclose the differences in pay between male employees and female employees every year within approximately three months following the end of their financial year. Companies with 300 or less employees are currently exempt from this pay gap reporting requirement, but it may be expanded to smaller companies in the future.
Employers with 43.5 or more employees are required in principle to employ persons with disabilities at a rate of 2.3 per cent or more, and are obliged to report to the Public Employment Security Office on the status of employment of persons with disabilities as of June 1 of every year according to the Law for Employment Promotion of Persons with Disabilities, but they are not required to disclose this information publicly.
4.1 How long does maternity leave last?
Mandatory maternity leave lasts 14 weeks in general (six weeks before childbirth, and eight weeks after childbirth). The LSA prohibits an employer from:
In addition, a worker is entitled to take childcare leave for a child of less than one year of age (or until the child turns two years old, if some requirements are met).
4.2 What rights, including rights to pay and benefits, does a woman have during maternity leave?
A female employee is not entitled to salary during maternity leave or childcare leave, unless her employment contract or the employment rules of her employer stipulate otherwise. However, she is entitled to the following allowances under insurance laws.
First, a female employee who gives birth is entitled to receive childbirth allowance equal to two-thirds of her daily salary from the health insurance association she has joined.
Second, a female employee who takes childcare leave is entitled to receive childcare allowance from the health insurance association she has joined, until the child turns one year old (or until the child turns one-and-a-half years old, if some requirements are met).
4.3 What rights does a woman have upon her return to work from maternity leave?
Employers are prohibited from treating a female employee in a disadvantageous manner because of maternity leave or childcare leave. Thus, an employer is generally required to enable a female employee to return to her original work after her maternity leave or childcare leave. Assigning her to a different position or reducing her wages can be deemed unlawful if either is due to her taking maternity leave or childcare leave.
In addition, a female employee who is raising an infant under one year old is entitled to time to care for the infant for at least 30 minutes twice a day, in addition to the normal rest periods.
4.4 Do fathers have the right to take paternity leave?
A male employee is entitled to childcare leave. He is entitled to only one period of childcare leave in general; however, if the first period of childcare leave ends within eight weeks from the birth of the child, he is entitled to a second one. He is not entitled to salary during such leave, unless his employment contract or the employment rules of his employer stipulate otherwise. That said, as with a female employee, a male employee is also entitled to receive childcare allowance from the health insurance association he has joined (see question 4.2).
It is worth noting that the Act on the Welfare of Workers who Take Care of Children or Other Family Members Including Child Care and Family Care Leave (the “Childcare and Nursing Care Leave Act”) was amended in 2021 in order to allow male employees to take childcare leave more easily and to enhance the working environment for such purpose. This amendment includes the new rules that allow a male employee to take additional paternity leave of four weeks within eight weeks from the birth of the child. The amendments were enacted on a step-by-step basis from April 1, 2022.
4.5 Are there any other parental leave rights that employers have to observe?
An employee who is taking care of a child under elementary school age is entitled to take a day off to take care of an injured or sick child for up to five working days per fiscal year (or up to 10 working days if the worker has two or more children under elementary school age). He/she is not entitled to salary during such leave, unless his/her employment contract or the employment rules of his/her employer stipulate otherwise.
4.6 Are employees entitled to work flexibly if they have responsibility for caring for dependants?
An employee is entitled to take a day off to take care of a family member who requires nursing care for up to five working days per fiscal year (or up to 10 working days if the worker has two or more family members requiring nursing care). This leave can be taken in half-day increments. An employee is not entitled to salary during such leave, unless his/her employment contract or the employment rules of his/her employer stipulate otherwise.
5.1 On a business sale (either a share sale or asset transfer), do employees automatically transfer to the buyer?
When a business is sold through a share transfer, no transfer will take place because there will be no change in employer.
In a business sale through an asset transfer, employees do not automatically transfer. The transferee (the buyer) and the transferor (the seller) may agree to include employment contracts in the business being sold, but if a worker refuses to consent to the transfer of his/her employment contract, the employment contract will not transfer to the transferee.
5.2 What employee rights transfer on a business sale? How does a business sale affect collective agreements?
In a share sale, the employment conditions and status will not change. Collective agreements entered into before the share sale, and in force as of the share sale, will continue to be in force and their conditions will not change merely because of the share sale.
In an asset transfer, an employment contract can be transferred to the buyer transferee by (i) including the employment contract in the business to be sold, or (ii) having the worker resign from the transferor and enter into a new employment contract with the transferee. In the former case, the terms and conditions of the employment contract will remain the same even after the transfer, unless otherwise agreed between the transferee and the worker. In the latter case, the terms and conditions may change depending on the work rules of the transferee or the new employment contract. Collective labour agreements will not transfer, unless otherwise agreed between the transferor, the transferee and the union.
5.3 Are there any information and consultation rights on a business sale? How long does the process typically take and what are the sanctions for failing to inform and consult?
On a business sale either by a share transfer or an asset transfer, a worker does not have any specific statutory rights regarding information and consultation; however, generally speaking, the employer should provide sufficient information and faithfully consult with the workers when asking them to consent to the transfer. There is no statutory requirement regarding the time necessary for the process.
5.4 Can employees be dismissed in connection with a business sale?
A business sale by itself will not justify the dismissal of employees, and thus, the general rules on dismissals apply to dismissals in connection with a business sale (see question 6.3).
5.5 Are employers free to change terms and conditions of employment in connection with a business sale?
An employer cannot freely change the terms and conditions of employment in connection with a business sale. If an employer would like to change the terms and conditions of individual employment contracts, they are required to obtain the consent of the workers. If they would like to make changes to the work rules that are disadvantageous to the workers, justifiable reasons for the changes are required.
6.1 Do employees have to be given notice of termination of their employment? How is the notice period determined?
Yes. An employer is required to provide at least 30 days’ advance notice to the employee, or to pay the average wage the employee would earn for a period of not less than 30 days in lieu of notice (“Payment in lieu of Notice”). The number of days for the advance notice can be reduced by the number of days for which the employer pays the average wage.
6.2 Can employers require employees to serve a period of “garden leave” during their notice period when the employee remains employed but does not have to attend for work?
Yes, an employer can require employees to serve “garden leave” if the employer pays wages to the employees during that period.
6.3 What protection do employees have against dismissal? In what circumstances is an employee treated as being dismissed? Is consent from a third party required before an employer can dismiss?
An employer may only terminate or dismiss an employee on grounds that are objective, justifiable and reasonable, and any termination or dismissal that is not on those grounds is invalid and deemed an abuse of the rights of the employer. In general, the reasons can be:
Japanese courts strictly interpret the requirement of an “objective, justifiable and reasonable” ground. Usually, a dismissal is deemed lawful only where: the cause of dismissal is of a significant degree; there is no other way to avoid the dismissal; and there is almost no factor on the employee’s side that could be taken into consideration in favour of the employee.
In cases of dismissal due to business reasons of the employer, the following general requirements have been formulated by Japanese courts in determining the validity of the dismissal:
If an employee does not dispute the validity of the dismissal, the dismissal will become effective. If the employee disputes the validity of the dismissal, however, he/she would ultimately be considered to have been duly dismissed only if the court determines that the above-mentioned criteria have been met.
If a collective labour agreement requires an employer to obtain the consent of a labour union to dismiss employees, a dismissal without such consent will be considered null and void.
6.4 Are there any categories of employees who enjoy special protection against dismissal?
Yes, there are categories of employees who enjoy special protection against dismissal. An employer is prohibited from dismissing the following categories of employees:
In addition, an employer is not entitled to dismiss an employee on any of the following grounds:
Also, an employer cannot dismiss a part-time employee who is considered to be equivalent to an ordinary employee only due to the reason that he/she is a part-time employee.
6.5 When will an employer be entitled to dismiss for: 1) reasons related to the individual employee; or 2) business-related reasons? Are employees entitled to compensation on dismissal and if so, how is compensation calculated?
Please see questions 6.3 and 6.9.
Employees are not entitled to compensation on dismissal. However, an employer is generally required to make Payment in lieu of Notice (see question 6.1). In addition, since the validity of a dismissal is strictly examined by Japanese courts if disputed, employers often provide employees with a severance payment to facilitate voluntary resignation. The amount of severance pay varies significantly with each company; however, in many cases, it is calculated based on the employee’s length of service.
6.6 Are there any specific procedures that an employer has to follow in relation to individual dismissals?
As a general rule, advance notice of termination (see question 6.1) is required. In addition, any termination procedures stipulated under the employment rules or collective labour agreements must be followed.
It is also desirable to notify the employee of the reasons for the dismissal and provide him/her an opportunity for self-vindication. Further, if so requested by the employee, an employer is required to provide him/her, without delay, with a certificate that certifies the period of employment, the type of work of the employee, the employee’s position, the wages, and the cause of retirement (if the cause for retirement is dismissal, the reason for the dismissal must also be provided).
6.7 What claims can an employee bring if he or she is dismissed? What are the remedies for a successful claim?
An employee can bring a claim against the employer for declaratory judgment (determining that the dismissal is void and invalid) or a decision to confirm his/her position as an employee, by filing a petition for labour tribunal proceedings, provisional injunction or litigation.
If the court (in the case of provisional injunction or litigation) or the labour tribunal (in the case of labour tribunal proceedings) determines that a dismissal is null and void, the employer must reinstate the employee and pay the employee’s wages or salary since the date of dismissal (so-called “back pay”) with interest. In principle, if the dismissal is judged to be invalid and the employee is reinstated, the employee cannot claim for damages. However, if any communication or action by the employer in relation to the dismissal is considered to be a tortious act, a claim for damages may be admitted.
6.8 Can employers settle claims before or after they are initiated?
Yes, employers can settle claims at any time before or after they are initiated.
6.9 Does an employer have any additional obligations if it is dismissing a number of employees at the same time?
Yes, an employer does have additional obligations when dismissing a number of employees at the same time. In the case of any of the following dismissals, the employer must notify the competent public job-placement office of the dismissal of:
With respect to dismissals due to business reasons of the employer, please see question 6.3.
6.10 How do employees enforce their rights in relation to mass dismissals and what are the consequences if an employer fails to comply with its obligations?
Employees can dispute the validity of mass dismissals by filing a petition with a court or a labour tribunal.
If the four criteria discussed in question 6.3 are not satisfied, the dismissal will be considered null and void, in which case the employer must reinstate the dismissed employees and provide back pay (see question 6.7).
7.1 What types of restrictive covenants are recognised?
In a typical case, restrictive covenants include non-compete clauses, non-solicitation clauses and confidentiality clauses.
7.2 When are restrictive covenants enforceable and for what period?
Generally speaking, a non-competition covenant is considered a restriction on the free choice of employment, which is considered a basic human right in Japan, and thus deemed invalid and unenforceable except where there are reasonable grounds (under case law). Based on court precedents, when deciding the validity and enforceability of non-competition covenants, courts take into consideration whether:
With respect to factor ii), if the worker’s position is close to top management or the worker deals with very important or sensitive confidential information of the company, it is generally understood that there is a necessity for the employer to impose a non-competition covenant on the worker to protect their legitimate interest. With respect to factor iii), generally speaking, the period and scope of restriction in relation to geographical area and business categories are considered. With respect to factor iv), generally speaking, if the employer does not give financial benefits to compensate the employee for a non-competition covenant, courts tend to decide that this factor would not be satisfied. In some cases where the employee receives a high salary, courts have decided that factor iv) has been satisfied, since the compensation for the non-competition covenant was included in the basic salary, even though the company did not grant compensation specifically for the non-competition covenant.
With respect to a non-solicitation obligation, there are no major court precedents or well-established views regarding the validity and enforceability of a non-solicitation covenant, but there are a few precedents where courts have determined that a former worker’s solicitation of his/her former employer’s existing workers constitutes tort and ordered the worker to compensate the former employer where the solicitation was carried out in a manner that is not socially acceptable.
If a worker has agreed to a confidentiality covenant or confidentiality obligations are included in the work rules regarding certain confidential information of the employer, the worker must abide by that covenant. If a confidentiality covenant does not limit its scope in relation to geographical area, the covenant is generally considered as being effective even outside Japan.
A confidentiality covenant without any duration may be considered as unnecessarily and unreasonably restrictive and, therefore, the court may interpret that the covenant is valid only for a limited time.
7.3 Do employees have to be provided with financial compensation in return for covenants?
There is no statutory requirement that an employer must provide workers with financial compensation in return for covenants, but the provision of financial compensation is an important factor in deciding whether a covenant is valid (see question 7.2).
7.4 How are restrictive covenants enforced?
Covenants are normally enforced through a provisional remedy. A provisional remedy (preliminary injunction) is a temporary remedy that is granted by the court before deciding on the merits to avoid substantial damage or imminent danger to the petitioner. The court will order a provisional remedy only if there exists:
Unlike in a decision on the merits (main lawsuit), the level of proof for provisional remedy is merely prima facie.
An employer may also claim for damages suffered due to the former worker’s breach of a covenant.
8.1 How do employee data protection rights affect the employment relationship? Can an employer transfer employee data freely to other countries?
Employees’ data, insofar as it falls within “personal information”, is protected under the Act on the Protection of Personal Information (the “APPI”), its Enforcement Ordinance and related guidelines. An employer is obliged to comply with the APPI as a “personal information-handling business operator” in dealing with employees’ personal information. The obligations of a personal information-handling business operator under the APPI include the following:
The first significant amendment to the APPI entered into force on May 30, 2017. Under the amended APPI, in providing personal information of an employee to a third party in a foreign country, the employer is obliged to:
Without taking the above-mentioned measures, the employer is prohibited from transferring employees’ personal information to a third party in a foreign country.
8.2 Do employees have a right to obtain copies of any personal information that is held by their employer?
The APPI generally entitles an individual to demand a personal information-handling business operator to disclose the retained personal information that can identify him/her. Thus, an employee has the right to know what kind of personal information is held by the employer, unless there is a reason (the list of which is stipulated in the APPI) for the employer not to disclose the retained personal information.
It is generally understood that an employer may refuse to disclose, for example, details of a personnel evaluation, as it may seriously interfere with them implementing their business properly.
8.3 Are employers entitled to carry out pre-employment checks on prospective employees (such as criminal record checks)?
Yes, an employer may carry out background checks, insofar as it acquires personal information of job applicants lawfully.
Under the APPI, an employer must notify or make public the purpose for which it intends to use the personal information they have acquired, when acquiring personal information (except in some cases, including where, judging from the circumstances, it can be said that the utilisation purpose is clear). Also, an employer is prohibited from acquiring sensitive personal information (such as information regarding race, ethnicity, and criminal history) of a job applicant without his/her consent. In practice, an employer usually requires a job applicant to submit a filled-in template CV that contains questions regarding personal information, including criminal records. Such acquisition and use of personal information of the job applicant by the employer would be deemed lawful and valid because the applicant is deemed to have given his/her consent when he/she submitted the CV to the employer, and, given the circumstances in which the CV was submitted, it can be recognised that the utilisation purpose is clear.
While criminal records are held by the police and employers do not have the means to check them directly, a typical template CV enables an employer to obtain and utilise such information legally for the purpose of background checks.
On a separate note, the ancillary guidelines to the Employment Security Law, as a general rule, restrict an employer’s acquisition of some kinds of sensitive personal information of job applicants, including race, ethnicity, opinions and creed, or history of union memberships.
8.4 Are employers entitled to monitor an employee’s emails, telephone calls or use of an employer’s computer system?
The email accounts, telephones and computer systems belong to the employer and should be used only for business operations in general. From this perspective, as a general rule, such equipment can be monitored if the monitoring is carried out for a business necessity. However, in carrying out the monitoring, an employer must take the following measures below regarding the personal information of employees.
When a personal information-handling business operator has an employee handle personal information, it must exercise necessary and appropriate supervision over that employee to ensure control of the security of personal information. This supervision may include things such as monitoring the employee’s actions online, or video monitoring the employee.
The Personal Information Protection Commission, the Japanese data protection supervisory authority, recommends that an employer who wants to monitor employees should preferably take certain measures, including:
8.5 Can an employer control an employee’s use of social media in or outside the workplace?
An employer can control and restrict an employee’s personal use of social media in the workplace, as employees are obliged to devote themselves to performing their work at the workplace. The employer, however, may not control or restrict an employee’s personal use of social media outside the workplace, except in limited circumstances; for example, where an employee intends to leak business secrets or defame the company.
8.6 Are there any restrictions on how employers use AI in the employment relationship (such as during recruitment or for monitoring an employee’s performance or productivity)?
There are no restrictions on how employers use AI in the employment relationship.
9.1 Which courts or tribunals have jurisdiction to hear employment-related complaints and what is their composition?
There are two main venues that have jurisdiction to hear employment-related complaints:
9.2 What procedure applies to employment-related complaints? Is conciliation mandatory before a complaint can proceed? Does an employee have to pay a fee to submit a claim?
At an ordinary court, once an action is brought, it will go through the submission of pleadings, oral proceedings and the examination of evidence. In these proceedings, conciliation is not mandatory before a complaint can proceed.
On the other hand, proceedings at the labour tribunal are usually held for up to three hearings to hear the allegations of both parties and examine evidence. In these proceedings, conciliation is mandatory before a decision can be rendered by the tribunal if there is a possibility for the case to be resolved by settlement.
In both proceedings, the employee must pay a fee to the court to submit a claim or a petition.
The amount of the fee is based on the amount demanded by the employee in his/her claim or petition.
9.3 How long do employment-related complaints typically take to be decided?
It takes approximately 12 months (on average) for an employment-related complaint before an ordinary court to be decided. If the complaint is brought before the labour tribunal, deliberations can take anywhere from 75 days to 90 days in general.
9.4 Is it possible to appeal against a first instance decision and if so, how long do such appeals usually take?
Yes, both decisions by an ordinary court of first instance and a labour tribunal can be appealed. If a case that was pending before a labour tribunal is appealed, it will automatically move to an ordinary court. The average deliberation period at the appellate court is approximately six months.
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