Many companies sign the Labor-Management Agreement on Overtime, or so-called “the 36 Agreement” once a year. With the new fiscal year begun, this article covers important points in complying with the 36 Agreement.
[1] Daily checks
Companies should check the following two points regularly:
1. Daily, monthly and yearly overtime hours do not exceed the 36 Agreement limits.
2. Numbers and hours of holiday work do not exceed the 36 Agreement limits.
Regarding Point 1, companies have to manage their workers’ daily, monthly and yearly overtime hours. Particularly, it is important to conduct regular checks of accumulated yearly overtime hours from the starting date of the calculation period, since, for example, overtime work may exceed the annual limit by the 9th month. As for Point 2, companies should understand the limits to overtime and make sure the 36 Agreement is followed.
[2] Key points to applying the special clause
There are three important points in applying the 36 Agreement’s special clause, which sets an exception to overtime work limits:
1. When companies make employees work overtime under the special clause, the procedure specified in the 36 Agreement must be followed.
2. The special clause should not be applied more than the maximum number specified in the 36 Agreement.
3. The combined hours of overtime and holiday work should not exceed 80 hours on each of the two- to six-month average.
As described in Point 1, companies are required to follow the procedure specified in the 36 Agreement in each month when the special clause is applied. If the procedure specified in the 36 Agreement is “advance request to the representative of a majority of the employees,” the company needs to make an advance request in writing to the employees’ representative.
Regarding Point 2, the special clause may be applied up to six times. If the 36 Agreement sets the limit at six, the company needs to ensure the number does not exceed six for individual employees. In many cases, this is the most important point in overtime management.
Concerning Point 3, in a case where the special clause allows exceptional monthly overtime up to 90 hours, even if monthly overtime does not exceed 90 hours, the combined hours of monthly overtime and holiday work must be checked continuously to ensure the averages of two to six months will not be over 80 hours. For example, if an employee worked 90 hours of overtime in a month, the employee’s overtime in the following month should be kept under 70 hours. Please also note that the averages of two to six months must be checked regardless of the effective period of the 36 Agreement. Even if the 36 Agreement is valid from April 1, 2023, to March 31, 2024, the three-month average rule must be met not only for the period from April to June 2023, but also for the period from March to May 2023.
Additionally, employers are required to implement “measures to ensure employees’ health and welfare” for workers applied with the special clause, as stipulated in the 36 Agreement. Records of the implementation status must be kept for a period of three years during the effective period of the 36 Agreement and for three years after its expiration.
Reference
Labour Ministry “Explanation on the limit of overtime work hours”
https://www.mhlw.go.jp/content/000463185.pdf
