Labour Contracts Act (Rōdō Keiyaku Hō)
The Labour Contracts Act (Rōdō Keiyaku Hō) enacted in 2007 codified and modernised the law governing individual labour contracts in Japan. The Act consolidated and clarified rules on dismissal, disciplinary action, working conditions, and the relationship between statutory provisions and individual contracts. It introduced specific provisions on dismissal by giving written reasons, prohibited dismissal for discriminatory reasons, and codified the principle that working conditions determined by collective agreements or customs are incorporated into individual labour contracts.
Legal area: Law governing the relationship between employers and employees.
Year enacted: 2007
Full text: https://elaws.e-gov.go.jp/document?lawid=japan-labour-contracts-act
Key Provisions
- Article 3: Prohibition of dismissal for discriminatory reasons
- Article 7: Dismissal requiring ‘socially acceptable reason’
- Article 8: Written statement of reasons for dismissal
- Article 9: Dismissal with 30 days advance notice or payment in lieu
- Article 12: Working conditions determined by collective agreements
- Article 14: Prohibition of unfair disciplinary action
Significance
The Labour Contracts Act strengthened individual worker protections by codifying judicially developed doctrines on dismissal. The Act’s written reason requirement for dismissal has improved transparency in employment terminations. The Act clarified the interaction between statutory provisions, collective agreements, and individual contracts. The Act has been tested in courts regarding the interpretation of ‘socially acceptable reason’ for dismissal and the scope of prohibited discriminatory dismissal.