Chapter II Labor Contracts

Any part of a labor contract that prescribes working conditions not meeting the standards of this Act is invalid. In this case, the part of the contract that is invalid is governed by the standards prescribed in this Act.

①Except for labor contracts without fixed terms and except for those in which it is provided that the contract period is the period necessary for the completion of a specific business, it is prohibited to enter into a labor contract for a period exceeding 3 years (or 5 years, for a labor contract falling under one of the following items):

②To preemptively prevent disputes from arising between workers and employers when they enter into fixed-term labor contracts and when those labor contracts expire, the Minister of Health, Labour and Welfare may prescribe standards for particulars regarding the notice that employers are required to give in connection with the expiration of the period of labor contracts, and other necessary particulars.

③The relevant government agency may give necessary advice and guidance concerning the standards referred to in the preceding paragraph to employers entering into fixed-term labor contracts.

①When entering into a labor contract, the employer must clearly indicate the wages, working hours, and other working conditions to the worker. In doing so, the employer must clearly indicate the particulars of wages and working hours and any other such particulars that Order of the Ministry of Health, Labour and Welfare prescribes in the manner prescribed by Order of the Ministry of Health, Labour and Welfare.

②If working conditions that have been clearly indicated based on the provisions of the preceding paragraph differ from actual conditions, the worker may immediately cancel the labor contract.

③In the case referred to in the preceding paragraph, if a worker who has altered residences for work returns home within 14 days after the contract cancellation date, the employer must cover any necessary travel expenses.

An employer must not enter into a contract that prescribes a penalty for non-performance of a labor contract or establishes the amount of compensation for a loss or damages in advance.

An employer must not offset a worker's wages against money advanced to the worker or against a claim for the return of an advance that is conditioned on the worker's working.

①An employer must not cause a worker to enter into a savings contract or a contract to manage a worker's savings incidental to the labor contract.

②If an employer seeks to be entrusted by a worker with managing their savings, it must conclude a written agreement with the labor union that is organized by a majority of the workers at that workplace, if there is one, or with a person representing a majority of the workers at that workplace, if there is no such union; and must file this agreement with the relevant government agency.

③If an employer is entrusted by a worker with managing their savings, it must establish rules governing the management of those savings and take measures to inform the worker of these rules, such as keeping them at the workplace.

④When an employer is entrusted by a worker with managing their savings, it must set an interest rate if its management of those savings constitutes the acceptance of a deposit. In this case, if the interest rate is below the rate of interest prescribed by Order of the Ministry of Health, Labour and Welfare by taking into consideration the rate of interest for deposits accepted by financial institutions, the employer is deemed to have set an interest rate that is based on the rate of interest prescribed by that Order of the Ministry of Health, Labour and Welfare.

⑤If an employer is entrusted by a worker with managing that worker's savings, it must return those savings to the worker if requested to do so without delay.

⑥If an employer has violated the provisions of the preceding paragraph and the employer's continued management of the workers' savings is found to be seriously detrimental to the interests of the worker, the relevant government agency may order the employer to suspend its management of those savings, to the extent necessary.

⑦An employer that has been ordered to suspend its management of savings pursuant to the provisions of the preceding paragraph must return the savings associated with that suspended management to the worker without delay.

①An employer must not dismiss a worker in a period during which the worker is absent from work for medical treatment due to an injury sustained or illness contracted at work, nor within 30 days thereafter, and must not dismiss a female worker in a period during which she is absent from work before or after childbirth based on the provisions of Article 65, nor within 30 days thereafter; provided, however, that this does not apply if the employer pays compensation for discontinuation pursuant to Article 81, nor does it apply if continuation of business has become impossible due to a natural disaster or any other unavoidable reason.

②In a case referred to in the second sentence of the proviso to the preceding paragraph, the employer must obtain the approval of the relevant government agency regarding the reason in question.

①If an employer intends to dismiss a worker, the employer must provide at least 30 days' advance notice. An employer not giving 30 days' advance notice must pay the worker the average wage for at least 30 days; provided, however, that this does not apply if continuation of business has become impossible due to a natural disaster or any other unavoidable reason, or if the worker is dismissed for reasons attributable to that worker.

②The number of days of advance notice referred to in the preceding paragraph may be shortened if the employer pays the worker the average daily wage they would earn for each day by which the advance notice period is shortened.

③The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to the case referred to in the proviso to paragraph (1).

The provisions of the preceding Article do not apply to a worker falling under one of the following items; provided, however, that this does not apply if a person falling under item (i) has been employed continuously for a period of more than one month, if a person falling under either item (ii) or (iii) has been employed continuously for more than the period referred to in the relevant item, or if a person falling under item (iv) has been employed continuously for a period of more than 14 days:

①If, on the occasion of leaving employment, a worker requests a certificate stating the period of employment, kind of occupation, position in the business, wages, or reason for leaving (including the grounds for dismissal, if dismissal is the reason for leaving), the employer must deliver one without delay.

②If a worker requests a certificate giving the grounds for dismissal during the period between the day on which the worker is given the advance notice of dismissal referred to in Article 20, paragraph (1) and the day of leaving employment, the employer must deliver this without delay; provided, however, that if, on or after the day that the worker receives advance notice of dismissal, the worker leaves employment for reasons other than the dismissal in question, the employer is not required to deliver such a certificate on or after the day on which that worker leaves employment.

③The employer must not include any particular in the certificate referred to in the preceding two paragraphs that the worker does not request.

④An employer must not collaborate with a third party in advance to communicate any information concerning the nationality, creed, social status, or union activities of a worker, nor include any secret message in a certificate referred to in paragraph (1) or (2), with the intent to impede the employment of a worker.

①If a worker dies or leaves employment and the employer is requested to do so by a right holder, the employer must pay the wages and return reserve funds, security deposits, savings, and any other money or goods to which the worker is entitled, regardless of what it may be called, within 7 days.

②If there is a dispute over the wages, money, or goods referred to in the preceding paragraph, the employer must pay or return any undisputed portion of this within the period referred to in the preceding paragraph.