A fundamental basis of Japanese law regarding changes
in Personnel Policies is that no changes can be made, and especially those detrimental to the employee, without agreement
from the employees.
Stated by:
Mr. Saito, lawyer, Yotsuya
Mr. Yonekawa, lawyer, Shimbashi
Mr. Marui, lawyer, Kokubunji
Labor Assistance Board, Tachikawa
Mitaka City Office
Labor Administration Office, Mitaka
Shikyoren Labor Union
How binding are work regulations
for an employer? What restrictions apply to disadvantageous modifications of working conditions on the basis of the regulations?
The degree to which work regulations are binding
While work regulations are prepared individually
by companies, the objective is to apply working conditions in a standard and uniform way to, in principle, all workers. There
have been problems with respect to how both labor and management is bound by work regulations. The principle of Japan's Civil
Code is "defacto custom" (Article 92 of the Civil Code). Explained simply, this refers to a situation
whereby, in the course of repeatedly doing the same thing over a long period, there emerges a mutual sense of being bound
that is similar to a pledge made through a tacit understanding, even though no mutual pledge has been made in particular.
The following interpretation has taken shape based on decisions handed down over the years by courts in Japan. To wit, this
thinking holds that, when a state whereby treatment in accordance with the work regulations continues ever since the time
of starting to work for a company, that becomes a rule in the minds of both labor and management. Accordingly, provided that
reasonable working conditions are stipulated therein, compliance with the work regulations is regarded as being equivalent
to the content of a labor contract. This is called the "legal normative character" of work regulations.
Disadvantageous modification of the
work regulations
When an employer adds a new provision to the work
regulations that is disadvantageous to workers or modifies an existing provision of the work regulations in a way that is
disadvantageous to them, the problem arises as to whether workers are rightfully bound by that new or modified provision.
Japan's Supreme Court has taken the stance that modification of a working condition that has been enjoyed
until the present time in a way that is disadvantageous to workers is, in principle, not allowed. However, as long
as the content of that change is reasonable, workers are not able to be exempt from it because they do not agree. In other
words, if the content of a modification is reasonable, then workers must comply with the change even if it is to their disadvantage.
Judging whether modifications of
the work regulations are reasonable
The standard for determining whether the
content of a modification of the work regulations is reasonable is to compare, in terms of content and degree, the necessity
from a business standpoint of the change that the employer must make and the disadvantage borne by workers as a result of
that change. As a general rule, if the necessity surpasses the disadvantage, then the content of a modification is accepted
as reasonable. But in the reverse case, said modification is regarded as disadvantageous and deemed invalid. Specifically,
modifications that result in an actual deterioration of key working conditions-regarding, for example, pay (such as reducing
basic wages or bonuses) or an extension of working hours-are judged very severely. The situation now is that consideration
is given to the interests of workers, and employer conduct that goes too far is subject to stringent checking.
Organization of a Labor Union
Foreign employees have the right to organize
a labor union, bargain and act collectively, in order to keep and improve their working conditions. The organization
of a labor union and its activities are guaranteed as basic labor rights by the Constituion of Japan and the Labor Union Law
stipulates these rights in detail.
Activities of a Labor Union
1) Collective bargaining
Collective bargaining is a forum for employees
and employers to negotiate working conditions from an equal standpoint. A labor union shall have the right to bargain
collectively with the company for which its members work, regardless of the number of members (Article 6, LAbor Union
Law)
There is no system in Japan like exclusive negotiation
representative system in the United States of America (where only a labor union that has a majority of employees is endowed
with the right to bargain collectively).
An employer shall not refuse to bargain
collectively without proper reasons. If so, it shall constitute an unfair labor practice (Article 7-(2), Labor Union
Law).
Unfair Labor Practice
The law prohibits an employer from infringing on employees' right to
a union. This constitutes an unfair labor practice. If an employer commits an unfair labor practice, an employee
or the labor union is entitled to complain against such an unfair practice to the Labor Relations Commission. The Labor
Relations Commisssion make an investigation and hearing without delay, and if the Commission recognizes the labor practices
in question to be unfair, it will issue an order to protect the employee. The following practices shall be forbidden
as "Unfair Labor Practices" (Article 7-2, Labor Union Law);
1) to discharge or discriminate against an employee by reason of
his/her being a member of a labor union, having tried to join or organize a labor union, or having performed proper acts of
a labor union;
2) to make it a condition of employment that the employee must
not join or must withdraw from a labor union;
3) to refuse a request for collective bargaining without proper
reason;
4) to control or interfere with the formation or management of
a labor union by employees;
5) to give financial support in defraying the labor union's operational
expenditure;
6) to treat in a disadvantageous manner an employee by reason of
a complaint to the Labor Relations Commission.
What are an employer's obligations
concerning work regulations? What force do such regulations have?
The obligation to prepare and submit work regulations
Work regulations are a type of regulations pertaining
to working conditions and workplace rules set by an employer so that business can be conducted efficiently by a company. Some
companies refer to such regulations by other names, such as "plant regulations" or "employee regulations." Regardless of what
they are called, however, these regulations are subject to the Labor Standards Law. An employer whose workforce ordinarily
consists of ten or more workers must prepare written work regulations pertaining to specific items and then submit the regulations
to the head of the Labor Standards Inspection Office that has jurisdiction. There are eleven items to be covered: three mandatory
items, which are called "absolutely required matters," and eight that are referred to as "conditionally required matters"
(Article 89). The three mandatory items that must appear in all work regulations are (1) matters pertaining to work starting
and finishing times, break times, breaks, vacations, and so forth; (2) matters pertaining to methods for determining and calculating
wages (excluding bonuses and retirement allowances), payment methods, pay periods and payment times, and raises; and (3) matters
pertaining to retirement (including dismissals and mandatory retirement systems). The remaining eight items encompass matters
related to bonuses, retirement allowances, safety and hygiene, commendations, and punishments. These eight only need to be
included if a company carries out such activities on a systematized basis.
The obligation to listen
to workers' views and to keep workers informed
Because work regulations are extensive and easily
become quite detailed in their stipulations, a general practice is to divide the items and create separate regulations, such
as pay rules and retirement-allowance rules. The law stipulates that a company must listen to the views of the labor union
or worker representatives (limited to a labor union organized by more than half of the workers or representatives of more
than half of the workers) when it prepares or modifies its work regulations-just listening is acceptable, and obtaining their
agreement is not required-and that a written record of the opinions expressed by the labor union or representatives must be
attached when submitting the work regulations, including any separate rules if they exist (Article 90). An employer is subsequently
obligated to make the work regulations known to the workforce through such methods as posting the regulations or keeping them
at easily visible locations at each regular workplace, issuing them in writing, or making them available by computer (Article
106).
The
validity of work regulations
Work regulations are comparable to the Labor Standards
Law of a workplace. The matters set forth in such regulations are minimum conditions, and at the very least an employer shall
not engage in any practices that fall short of these working conditions. Consequently, any work requests that do not measure
up to the level of the working conditions contained in the work regulations-such as suddenly asking that the stipulated one-hour
break time henceforth be shortened to forty-five minutes because work has become very busy-are deemed invalid, and whatever
has been designated as invalid shall be aligned with the standards set forth in the work regulations (Article 93).
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As dismissal is very serious for employees, the court ruled
that a valid reason must be given for dismissal when the company wishes to discharge employees against their will, and dismissals
which constitute an abuse of authority are not allowed.
The following requirements shall be complied with even
when dismissal is due to a reduction in personnel because of a business decline,
1) the reduction in personnel is necessary for the company's existence
and maintenance,
2) the
company has made efforts to avoid dismissals by not hiring new employees or by encouraging early retirement,
3) the basis of the reduction in personnel
is rational and also equitable, and persons must be selected logically,
4) the company has also made efforts
to explain to the employees satisfaction the rationale of staff reductions and the necessity of dismissal.
