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Labor Policy

Explore Japan's labor policies including employment contracts, working conditions, fixed-term contracts, and dismissals under the Civil Code, Labor Standards Law, and relevant regulations, highlighting key developments and protections.

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Labor Policy

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  1. Labor Policy Keiichiro HAMAGUCHI

  2. Chapter 2 Working Conditions Policy

  3. Section 4 Employment Contract Policy

  4. (1) Civil Code • 1896 Civil Code defined employment contract as exchange of service and remuneration. • CC set 5 years limit on the length of contract (Art.626). • CC declared “employment at will” principle with just 2 weeks notice period (Art. 627).

  5. (2) Labor Standards Law and its revision • 1947 Labor Standards Law set 1 year limit on the length of contract and 30 days notice period. • Study Group on Labor Standards Law Report advocated extension to 5 years. • 1998 revised LSL set exceptional 3 years limit for professionals. • 2003 revised LSL set normal 3 years limit and exceptional 5 years limit for professionals.

  6. (3) Fixed-term labor contract issues • Employment protection of open-ended contract made fixed-term contract precarious. • 1974 Supreme Court Judgment protected some repeatedly renewed contract. • 2000 Guidelines on Renewal of Fixed-term Contract had no binging effect. • 2003 revised LSL and its Guidelines required employers clarification on renewal and 30 days notice period. • 2007 Labor Contract Law obliged employers to consider on renewal of fixed-term contract.

  7. (4) Dismissals • CC declared “employment at will” principle with just 2 weeks notice period (Art. 627). • Case law established doctrine of abusive dismissal and 4 requirements on redundancy. • 1982 ILO Convention No.158 on Termination required valid reason. • 2003 revised LSL legislated the doctrine of abusive dismissal. • The provision was transferred to 2007 Labor Contract Law.

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