The Partial Amendment of the Employment Contract Act of Japan took effect on April 1st, 2013 and is designed to help employees who are on fixed term contracts that continuously get renewed. The rule states that any fixed-term contract employee who has had his or her contract renewed 4 times can apply for a change to an employment contract without a fixed term. This rule greatly benefits contract employees who have been stuck in a cycle of continuous contract renewal with no chance of becoming a permanent employee.
The change from contract-basis to permanent employment will take place upon the employee entering his or her sixth year of employment with the company. This rule will not count employment before April 1st 2013 and the clock will “reset” on counting 4 consecutive renewals if there is a 6 month or more gap in the employee’s employment. Therefore, an employee who takes a half-year break must work another 4 consecutive contracts renewals before being able to take advantage of this law.
Additionally, Japanese judges also generally tend to rule in favor of forcing companies to hire contract workers as permanent employees under certain conditions. For example, if a fixed-term contract employee repeatedly has his or her contract renewed in a manner similar to a permanent employee and if the continuation of employment could be reasonably expected after the term of the contract expires, a non-renewal of the contract employee’s term might be considered invalid. Of course many factors come into play during litigation regarding the termination or non-renewal of an employment contract, so it is important to discuss the specific facts of your case with an attorney.
If you have any questions about employment contracts in Japan, please contact our office for a legal consultation.