In Japan, April is the month when many companies welcome new employees, including those fresh out of school. Administrative departments become occupied with entrance ceremony preparations, orientation training, and assignment of new staff to individual departments. There are also legally required procedures when companies hired employees, including statement of labor conditions. This article looks at key points the requirements.
[1] Statement of employment conditions
When a company hires an employee, they conclude a labor contract, based on which the employee provides labor and the company pays remuneration in exchange. As a contract in writing, a verbal agreement is considered valid.
However, a verbal agreement can be inadequate in explaining labor conditions. Difference in the understanding between the company and the worker may lead to trouble. Article 15 of the Labor Standards Act stipulates that, “when entering into a labor contract, the employer must clearly indicate…working conditions to the worker.” Particularly important matters, which are described below, must be provided in writing. Companies may use such methods as facsimile, email or social media messaging services, if requested by an employee.
1. Matters relating to employment term
2. In the case of fixed-term employment, the possibility of contract renewal and judgment criteria for a renewal (and the upper limit to the total employment period or the number of renewals)
3. Matters relating to the place of work and assignments (including the scope of possible changes in the place of work and assignments)
4. Matters relating to start and end times of working hours, overtime work, break time, days-off, leave of absence, as well as changes in shifts, if applicable.
5. The following matters relating to wages (excluding retirement allowances and wages paid in special circumstances)
- Methods of wage determination, calculation and payment
- Wage calculation and payment periods
6. Matters relating to retirement (including grounds for dismissal)
7. Matters relating to conversion of fixed-term employment to non-fixed-term employment and labor conditions after a conversion
In addition to these matters, when a part-time or fixed-term employee is hired, the company is legally required to indicate in writing whether the worker is applicable to pay increase, a retirement allowance and bonuses, as well as which department to consult with about improvements in work management.
[2] Probation period
Companies generally conduct aptitude tests and interviews when they hire workers, but it is not easy to determine whether they are truly suitable for the job. Therefore, it is common to set a probation period to find out about new workers’ skills, abilities, work attitudes and physical conditions.
Dismissing of a worker under probation is often considered acceptable, compared to firing of a regular employee, but companies still need to pay attention to the points below.
1. Length of probation period
A probation worker is placed in an uncertain employment situation, since they may not be hired as a regular employee depending of their skills or aptitude. Considering this, there are court precedents in which an unnecessarily long probation period was found invalid. Most companies set a probation period from three to six months. A trial period exceeding one year is generally considered inappropriate.
2. Dismissal during a probation period
Just because a worker is under probation, that does not mean the company is at liberty to fire the worker. Court precedents indicate that dismissal is acceptable only when there are objective, justifiable reasons and when it is considered appropriate under normal social conventions. Dismissal is found valid, only when it is objectively inappropriate to employ the worker, based on the worker’s performance, abilities, willingness to work or attitude.
3. Key points of setting a probation period
Companies are required to stipulate the matters below in the employment rules and explain them to workers at the time of hiring.
- Purpose of probation period
- Length of probation period
- Wages and other conditions during the probation period
- Criteria for not hiring as a regular employee
- Matters relating to extension of probation period
- Handling of the probation period in calculating the length of service
[3] Physical checkups of new employees
The Industrial Safety and Health Act sets rules regarding the management of workers’ health, including physical examinations. When companies hire “regularly employed workers,” they are required to provide a checkup, including items designated by laws. The “regularly employed workers” not only refers to full-time employees, but also part-timers and fixed-term employees who meet both of the conditions below.
-Non-fixed-term workers, workers whose contract period is one year or more, workers expected to be employed for one year or more by contract renewal, workers who have already been employed for one year or more.
-Workers whose scheduled weekly work hours is three-fourths or more of regular employees at the workplace.
Checkup does not have to be conducted after hiring. It can be skipped of a new worker submits a certificate of physical examination including designated items conducted within three months prior to hiring.
Companies need to follow these rules when hiring workers. Please also provide necessary explanation to new employees to avoid trouble.
(Reference)
The Ministry of Labour, “Changes in the rules on clear indication of labor conditions in April 2024”
https://www.mhlw.go.jp/stf/newpage_32105.html
“Workers’ medical examination”
https://www.mhlw.go.jp/content/001436958.pdf
The information is based on laws as of the date of this article.
