With the end of the fiscal year approaching, many companies must be starting preparations for the Labor-Management Agreement on Overtime (hereinafter, “the 36 Agreement.”) This article covers important points to observe the 36 Agreement that includes the special clause regarding overtime hours.
[1] Necessary procedure
If the special clause is needed to allow monthly overtime in excess of the legal limit of 45 hours, the company is required to formulate the procedure to make employees work beyond the ceiling of monthly overtime hours and describe the procedure in the 36 Agreement.
Companies must carry out the procedure each month to which the special clause is applied, but they can choose the method to suit their preferences. If “labor-management negotiations” is chosen, the company and the employees have to have prior negotiations. In the case “a request to the representative of the majority of employees” is adopted, the company has to make a request in writing to the representative of the majority of employees in advance.
[2] Upper limit to the use of the special clause
Even if the special clause is adopted, there is a legal limit on total working hours. In ordering employees to work overtime, all of the following four conditions must be met.
1. Annual overtime does not exceed 720 hours.
2. The sum of overtime and statutory holiday work is less than 100 hours per month.
3. The sum of overtime and statutory holiday work does not exceed 80 hours on the averages of two, three, four, five and six months.
4. Monthly overtime does not exceed 45 hours (*) more than six times per year.
* In the case of a yearly variable working-hour system with a unit of three month or longer, 42 hours per month.
As described in Item 4 above, monthly overtime exceeding 45 hours is allowed up to six times in a year. Making an employee work monthly overtime exceeding the limit of the 36 Agreement for seven times or more in the year constitutes violation of the law. If employees’ are chronically working overtime more than 45 hours per month, the company should make efforts to reduce working hours immediately.
[3] Average overtime hours for multiple months
Taking the case, for example, where the limit of monthly overtime under the special clause is 90 hours, even if overtimes hours do not exceed 90 hours in a certain month, monthly averages of the periods from two to six months must be kept under 80 hours as described in [2]-3. If an employee worked overtime for 90 hours in a month, overtime in the next month should not be more than 70 hours. In managing overtime, it is important to check working hours for multiple months.
Please also note that the rule on average overtime hours for multiple months is applied, not only during the period the 36 Agreement is valid, but also the preceding and the following months. For example, if the 36 Agreement is applied for the period from April 1, 2022, to March 31, 2023, the two-month average must be below the limit for the period from April to May of 2022, and also for the period from March to April of 2022.
Companies adopting the special clause must also implement health and welfare measures set by the 36 Agreement for the employees concerned. They are also required to keep the records about the measures during the period of the 36 Agreement and for three years after the expiration of the Agreement. Please ensure all the records are kept properly.
[Reference]
Health, Labour and Welfare Ministry “Upper limits on overtime hours” (Japanese only)
https://www.mhlw.go.jp/hatarakikata/overtime.html
