Understanding international labor and employment policy: a primer for multinational employer operating in a global economy.

• Author: Higashizawa, Noriko

FOREIGN companies hiring personnel in Japan may soon come to realize that many of their beliefs about Japanese employees do not exist. There is a stereotype that Japanese are non-litigious. This stereotype is inapplicable when it comes to employees asserting their legal rights in the workplace. As "at will" employment is not recognized in Japan, hiring the right employees is a key concern of employers. This paper will briefly discuss certain matters that employers need to consider when hiring a Japanese workforce. In Part I, we will give a brief introduction on how wage and discrimination claims are handled in the absence of class action lawsuits. Part II addresses the changing role of unions in Japan, including recent trends. Part III discusses the impact of social media in the work force and ways in which Japanese employers are addressing social media and privacy issues in the workplace.

1. Wage and Discrimination Claims in Japan

   1. Labor Dispute Methods

1. Class Action Lawsuits

   In Japan, class action lawsuits do not exist for group proceedings. Rather, group proceedings are required to be maintained on procedural methods that are accepted for normal litigation. A common method is joinder of claims, and a rarely used method is representative actions. (1)

   Joinder of claims is a procedure for consolidation of litigation between several parties into one single action, and parties are joined as a result of the intentions of the plaintiffs or the court. In particular, if rights or obligations that are the subject matter of the suits are common to two or more persons or are based on the same factual or statutory cause, these persons may sue or be sued as co-parties. The same shall apply where rights or obligations that are the subject matter of the suits are of the same kind and based on the same kind of causes in fact or by law. (2) Normally, this procedure is used for joining actions with a relative small number of parties such as, for example, the joining of two or more joint debtors. The benefit is to have one uniform judgment for similar types of cases, especially since the litigation proceedings are not separate litigations in practice, but are cases where a few lawyers are jointly retained to handle the proceedings. The weaknesses of joinder are that the group characteristic of this kind of procedure is only de facto and the court will have ultimate discretion to allow or deny it. For example, where evidence among the plaintiffs is different, the court can resolve them in separate litigation proceedings. Further, each party in principle is free to settle, and there are no particular restrictions preventing a party from withdrawing its claims. When this procedure is adopted, the lawyers retained in the litigation must obtain authorization from each individual party.

   2. Civil Litigation or Labor Mediation

   A civil lawsuit is one method to resolve individual labor disputes. In general, a dismissed employee initiates a legal action against his or her employer, raises certain claims for damages or remedies available under the laws and seeks a "provisional disposition order" to preserve his or her employment status (chii-hozen karishobun). A provisional disposition order is similar in effect to a preliminary injunction. Japanese courts nearly always grant this type of provisional disposition order and as a lawsuit may not be resolved for months or years, the employer could be required to continue paying an unwanted employee a salary with little economic recourse for repayment even if the employer ultimately prevails.

   In 2001, an extra-judicial procedure to assist resolution of individual labor disputes was introduced under the Law on Promoting Resolution of Individual Labor Disputes. Under this law, both parties to a labor dispute can consult with a regional office of Labor Bureau, and the Labor Bureau may give its advice or instruction to facilitate dispute resolution between the parties or arrange for a conciliation proceeding as necessary. (3) If there is no prospect of resolving the dispute, the party initiating the conciliation proceeding is free to initiate a civil action against the opposing party.

   In April 2006, a labor mediation process (rodo-shinpan) was introduced in the district courts to settle labor disputes, especially between individual workers and companies. Under this system, a mediator from management, another from labor and a judge convene to hear cases. The process, in principle, consists of three sessions with arguments mainly presented orally and with written submission of briefs. The process usually ends in three to four months. Unlike civil lawsuits, the mediators and judge may orally question the parties. If the parties do not settle the matter or reject a mediation proposal, the panel renders a decision. If either party files an objection to this decision, the decision will lose its effect and the normal civil litigation process will begin. The cost to use this system is relatively inexpensive.

   2. Burden of Proof

1. Wage Claims

   Japan is notorious for the long hours of work that companies expect from their employees. Unfortunately, this service overtime is unpaid overtime that a company expects and often demands from employees. However, under the Labor Standards Act ("LSA"), employers are required to pay 125% of an employee's base hourly wage for overtime work and 135% if...