Contracts in Japan

Overview by

The Active Population in Figures

Main Indicators 2004200520062007
Labor Force 66,660,00066,970,00066,400,00066,440,000
Labor Force (Annual Growth, %) -1.540.47-0.850.06
Rate of Activity (%) 52.352.552.152.1
Unemployment Rate (%)

Source: Japan Statistics Office

Employed Persons, by Occupation (% of Total Labor Force) 2005
Professional and technical workers 14.7%
Administrative and managerial workers 3.0%
Clerical and related workers 19.6%
Sales workers 14.0%
Protective service and other service workers 11.9%
Agricultural, forestry and fishery workers 4.4%
Transport and communication workers 3.2%
Mining workers 0.1%
Craftsmen and manufacturing and construction workers 22.3%
Laborers 5.7%
Total 100.0%

Source: Japan Statistics Office


Management of Human Resources



Method of Recruitment
The recruitment process takes place more and more via internet. Selection is made on the basis of a job interview.
Recruitment Agencies
There are three types:
- Public Employment Offices
- Private Employment Agencies
- Labor Dispatch Business.
Recruitment Websites
Hellowork (government-run employment agency, website exclusively in Japanese)
Jobs in Japan

The Contract

Type of Contract
In Japan, the contract determines if the employee is part of the regular or non-regular staff. Permanent employees form the regular staff. Among the non-regular staff, there are different types of contract: part-time workers, temporary workers, dispatched workers, fixed-term contract workers, entrusted employees (shokutaku).
Permanent contracts represent 65.4% of job total. 23% of jobs are non-regular jobs under part-time contracts.
Because of the economic recession which set in during the 1990’s, recourse to part-time jobs has developed considerably.
Breach of Contracts
  • Retirement
It can take several forms : general resignation, resignation for one’s own convenience, resignation by agreement, resignation by employee’s request, voluntary retirement.
  • Dismissals
Neither prohibited, nor controlled.
The Labor Standards Act prohibits only two dismissal cases:
1) during a period of leave for an injury at the workplace or illness, and during the 30 days following, as well as
2) for women, during the period of leave for pregnancy and delivery and during the 30 days following.
  • Other Possible Methods
Collective dismissals (possible for economic reasons)
Disciplinary dismissals
Labor Laws
Japan Institute for Labor Policy and Training
A summary of labor law on the Japanlaw website

Dispute Settlement


Conciliation Process

Cases of Dispute
Dismissal (26.1%), poor working conditions (14%), harassment (8.9%), conflict over retirement (7.2%)
  • Legal Framework
Three-step system :
1. resolution, “information provision and consultation” at the consultation service
2. “advice and guidance” by the head of the labor bureau
3. “conciliation” by the Dispute Reconciliation Council
  • Procedure
Act on Promoting the Resolution of Individual Labor Disputes, which was enacted in 2001

Judicial Structures

  • Legal Framework
standard civil procedures
  • Competent Legal Body
District courts
Labor tribunal system composed of a judge (labor tribunal judge) and labor-management experts (labor tribunal lay members)

Social Partners

Social Dialogue and Involvement of Social Partners
90% of unions are Company unions. Company unions (one per company) exist inside the Company to discuss working conditions.
Labor unions are organized cross-corporate organizations. The elements of claims made by the labor unions are then a basis for claims by the Company unions.
There are two types of labor unions: the Industrial Trade Unions and the National centers (mainly Rengo, the Japanese Trade Union Confederation).
Rengo and management organizations such as Nippon Keidanren (Japan Business Federation) have established a venue for regular discussions. For issues on which they share the same opinion, a joint policy proposal is duly submitted to the central government, especially at the Governmental Councils created for this. Every year between March and April, the unions launch an offensive on wages; it is known as Shunto, the spring wage offensive.
Unionization Rate
18.7% in 2005.
The rate is constantly dropping with a reduction registered especially in the private sector, in SMEs and micro-enterprises.
Nippon Keidanren
Regulation Bodies
The Labor situation in Japan, Institute for Labor Policy and Training
Ministry of Health, Labor and Welfare
The representation of the International Labor Organization in Japan

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