Companies sometimes face the need to dismiss an employee who caused a serious problem or when an employee's performance or work efficiency is significantly poor and does not make any improvement. Since dismissal is an extreme measure that drives the employee out of a job, it often results in a major trouble. This article covers basic knowledge required in firing employees.
1. Dismissal and advance notice
Dismissal is an employer’s act of unilaterally terminating an employment contract. To dismiss an employee, companies are required to give an advance notice at least 30 days prior to the dismissal date (“the advance notice of dismissal.”) If the company fires an employee immediately, it has to pay the employee’s average wage for at least 30 days (“the advance notice allowance.”) It is also possible to combine the advance notice and the advance notice allowance. The period of advance notice can be shortened for the number of days of advance notice allowance paid to the employee. For example, the company may give an advance notice 10 days prior to the dismissal date and pay the employee 20 days of average wage.
2. Important points in giving an advance notice
An advance notice of dismissal takes effect when the company’s intention is conveyed to the employee. The notice may be given either orally or in writing. If the dismissal notice is given orally, it takes effect immediately. In the case of a written notice, it takes effect when the employee receives the notice and is considered available to acknowledge the content. An oral notice tends to cause trouble later, since it is difficult to prove that the notice was given. To avoid such a problem, it is advisable to notify dismissal orally and also hand a written notice.
3. Important points in paying advance notice allowance
In the case the company pays an advance notice allowance worth 30 days of average wage, the payment must be done at the same time as the dismissal notice. If the period is shortened by paying a dismissal notice allowance, the payment must be done no later than the dismissal date.
Companies should keep these points in mind when dismissing employees. Even if these steps are followed, employers are not allowed to dismiss workers at their discretion. Dismissal is invalid if it lacks legitimate reasons or is considered inappropriate in light of socially accepted ideas. Dismissal is allowed only when the content and extent of the problem are considerable and it is impractical to continue the employment. Therefore, it is vital for companies to give timely instructions to employees when they show problematic behaviors or when their performance or work efficiency is poor. Please also be sure to keep records of such instructions.
Reference
Ministry of Health, Labour and Welfare (Japanese only)
http://www.mhlw.go.jp/seisakunitsuite/bunya/koyou_roudou/roudoukijun/keiyaku/
