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Cancellation

Types of Cancellation

""A unilateral cancellation of labor contract by a worker" is called resignation. Because human rights are guaranteed under the Constitution through the prohibition of slavery (Article 22 of the Constitution of Japan) and the freedom to choose one's occupation, "the freedom resignation is the freedom of the workers", the Civil Code stipulates that (Article 18 of the Constitution of Japan).

On the other hand, cancellation of a labor contract by agreement of both the worker and the employer constitutes cancellation of agreement, and unilateral cancellation by the employer constitutes dismissal.

The major difference between resigning and canceling the agreement is whether workers can withdraw their intention to cancel. In the case of the former, if the employer is informed of the intention to cancel the contract, the cancellation cannot be made, and in the case of the latter, even if the employer is informed of the intention to cancel the contract, the resignation cannot be made unless the employer agrees.

Dismissal is not made freely by employers, and it requires a compelling reason. In the end, the court decides whether dismissal is justified, taking into account the worker's fault, the severity of the damage suffered by the company, the worker's malicious intent, and whether there were unavoidable circumstances.

In certain cases as below, dismissal is prohibited by law.

Labor Standards Act
・Dismissal during the period of recuperation due to a work-related accident and subsequent 30 days
・Dismissal during the period of maternity leave and subsequent 30 days
・Dismissal by reason of reporting to the Labor Standards Inspection Office

Labor Union Act
・Dismissal by reason of being a member of a labor union

Equal Employment Opportunity Law
・Dismissal on the grounds of gender
・Dismissal of female workers for reasons such as marriage, pregnancy, childbirth, or maternity leave

Child Care and Family Care Leave Law
・Dismissal on the grounds that a worker has requested child care or family care leave, or has taken child care or family care leave

Cited from: Website of the Ministry of Health, Labour and Welfare)

On the other hand, in the case of a regular employee with a contract that does not specify the period of employment, the regular employee can request cancellation, or the employer (corporate side) can cancel the regular employee. If an employer dismisses a full-time employee, the employer is allowed to excesise "freedom to terminate" by giving a 2-week notice prior to the cancellation.

Therefore, especially in the case of dismissals based on "freedom to terminate" against regular employees, the employer is conditionally allowed to dismiss. However, termination have a significant economic and social impact on workers who are more vulnerable than employers, therefore in fact are regulated and modified by law.

Fixed-term employment contract

As for fixed-term employment contracts such as part-time workers, employers are not allowed to dismiss workers during the term of the contract, since the binding power of the contract during the term of the contract should be respected.

However, if a worker's illness, non-payment of wages, health status of family members, working environment, or power harassment occur, the employee is deemed to fall under the category of "unavoidable reason" and can immediately terminate the contract.

In addition, with regard to fixed-term employment contracts, the labor contract is automatically terminated after the contract period expires. However, if a contract is not renewed for a worker whose contract has been renewed more than three times or who has worked continuously for more than one year, the employer is required to give the worker 30 days' notice of cancellation.

Labor Standards Act and Cancellation

Article 15 of the Labor Standards Act stipulates that "Workers can immediately terminate the contract (resignation) if the working conditions presented in advance by the employer differ from the actual working environment".

Therefore, Article 15 of the Labor Standards Act can invalidate the legal binding force of Article 627 of the Civil Code when working conditions and actual conditions are different. For example, if a company pays less than the amount the company has previously offered, or if the working hours are unreasonably long, workers can immediately retire.