Termination

The law states:"In cases where a dismissal is not based upon any objectively reasonable grounds, and is not socially acceptable as proper, the dismissal will be null and void as an abuse of rights."
Rational and considerable reasons are necessary to validate the termination in a proper way.
Without those reasons and process, courts may characterize the termination as abusive or wrongful.
This may allow the employee to recover damages against the employer.

The forms of dismissal categorized by its reason on the following:

  1. Ordinary dismissal; in the case that it is impossible for employee to work by the accident and sickness, the employee lacks the requisite skills or has low productivity. Or when the employee does not return even after his leave of absence period has expired.
  2. Punitive dismissal; in the case that employees should receive punishment for their malicious disgraceful conduct.
  3. Dismissal for the purposes of reorganization; in the case that companies should implement employment adjustment in facing serious management difficulties.

Ordinary dismissal

Dealing with an Employee of Insufficient Capacity

  1. Regulations for dismissal in Japan
    In Japan, it is generally assumed that there is a lifetime employment system, and there is a general notion that the employer assumes the responsibility to raise the employee to be fully competent and develop his/her abilities. It is thought, therefore, that the employer should treat the employee in question with care, for example by pointing out any problems so that the employee can be guided to improve himself/herself, and that he/she cannot be abruptly forced to leave the organization when he/she is not given adequate support.

    * Once a dismissal develops into a legal problem, what is demanded of the employer and is focused on in practice, is "how much effort the employer has made to educate the employee with the purpose of the employee's self-improvement." The employer is required to go through procedures including hearing from the employee, opportunities for self-examination, education, improvement and the chance to explain.

  2. Basic measures
    Phase 1
    Efforts to improve problems by admonishment, guidance, etc.:
    (i) Admonishment and guidance by a superior;
    (ii) Personnel transfer or reshuffle;
    (iii) Demotion or downgrading in position;
    (iv) Light disciplinary punishment other than layoff; and
    (v) Low evaluation in personnel appraisal.

    Phase 2
    After 'Phase 1' measures have been fully taken, but it is judged that no improvement is seen, the employee will be expelled from the company by means of persuading him/her to take voluntarily retirement.
    (I) Persuade into voluntary retirement
    (ii) Encourage him/her to retire

    Phase 3
    When the employee in question does not accept voluntary retirement, the employer shall consider a layoff as a last resort.

    * Advance notice is required for dismissal. Advance notice, however, shall not necessarily make the dismissal valid. It is necessary to prepare materials in order not to be accused of abusing the power of dismissal. Therefore, when the employee in question is given admonishment and instructions, it is important to keep as much data as possible, on the presumption of the possibility that the dismissal may develop into a lawsuit in the future.

    * For settlement of a civil lawsuit, especially of a labor-management dispute, in most cases, it seems useful to seek reconciliation by hearing both sides of the story and taking both views into consideration rather than just presenting facts.
    Considering the enormous amount of time and cost for lawsuits, it is wise to take preventive measures (provision of office regulations, etc.), by recognizing problems in advance or learning from past cases of lawsuits.

Punitive dismissal

The Company shall dismiss the Employee forthwith without giving any advance notice. In this case, when approval of disciplinary dismissal is obtained from the chief of the competent labor standards inspection office, the Company shall not pay the allowance in lieu of advance notice to the Employee.

An Employee who comes under any of the following Subparagraphs shall be subject to retirement from office under instruction or disciplinary dismissal according to the circumstances:

  1. When an Employee conducts any act subject to a criminal offence, such as misappropriation, injury, etc., or connives at the same within the Company;
  2. When an Employee conducts violence, threats or other unlawful acts, and the honor of Employees of the Company is materially injured, etc., etc.

Redundancy

Japan's court have worked out the following criteria to help determine whether redundancy is appropriate.
This is a guideline for the kinds of issues that will be considered.

Today's four requirements of dismissal for the purposes of reorganization are follows:

  1. The management necessity of dismissal for the purposes of reorganization.
  2. The fact making efforts in order to avert dismissal for the purposes of reorganization
  3. The appointment of the discharge based on rational criterion.
  4. The fact making efforts in conferring with a labor union or employees and explaining to them.

Changing views

In recent years, the court has administered the above four requirements of dismissal for the purposes of reorganization strictly because there has respect rules of employment society in violating statutory law in substance. Now, these rules of employment society are forced to change drastically, and these four requirements of dismissal for the purposes of reorganization that the court established are in urgent need of reviewing.
We are supposed to consider the specific circumstances of each case comprehensively in terms of decision of abuse of right of dismissal.

Let the above outline explain simply

  1. Four requirements of dismissal for the purposes of reorganization are no more than
    criterions whether the dismissal for the purposes of reorganization corresponds to abuse of
    right of dismissal or not.
  2. One of the four requirements is not exactly necessary condition for dismissal for the
    purposes of reorganization.
  3. Whether the dismissal for the purposes of reorganization is justifiable or not should be
    judged by considering four requirements comprehensively.

Four conventional requirements of dismissal for the purposes of reorganization derive from
doctrine of abuse of right of dismissal based on lifetime employment and seniority system. And
so, it may be natural that today's four requirements of dismissal for the purposes of
reorganization are not applied as a criterion for employees, which generally don't work under lifetime employment and seniority system, such as staff or part-timer of small and medium-size companies and ones for a fixed period of time.

From another angle

To make dismissal in operation, rational and considerable reasons are necessary.
Without those reasons, dismissal could be understood as the abuse of employee's right.
Taking working ability, qualification, faulty performance, insubordination and management
necessity of employees into consideration, rational and considerable reasons are judged.