what happens in a dismissal

What Happens in a Dismissal

01. Voluntary Resignation

The principle of freedom of occupational choice(Article 22 of the Constitution) grants a worker the right to resign without specific legal encumbrances and the company cannot compel them to stay.  A worker is entitled to voluntarily resign by providing two weeks' notice(Article 627 of Civil Code), notwithstanding any provision in the contract or employment rules requiring a longer period (however, providing less than the required notice period may affect severance pay or other benefits).

	by employee	by company
notice period :	2-week prior	30-day prior
restrictions :	n/a	legal restriction

02. Severance Package

Prior to implementing a reduction in force, foreign companies often present enhanced severance packages to employees identified for potential termination, seeking their consensual termination of employment.  At this point in time, just a package presented, employees do NOT have to leave unless signed. From a legal perspective, this action constitutes an inducement to elicit consensual termination of employment and does NOT amount to a termination by company.  Therefore, the employee is under no legal obligation to accede to this proposal; however, in instances where mutual agreement is not attained, the company frequently proceeds with termination.

Severance Package ≠ dismissal

03. Termination

The company may exercise their right of termination to terminate an employment contract; however, in Japan, terminations by company are subject to and restricted by the doctrine of abuse of the right, even in the case of foreign company (for details, see the page of doctrine and precedents).  In addition, from a schedule perspective, the termination must be carried out either by providing at least 30 days' advance notice or by payment of termination allowance in lieu of such notice(Article 20 of Labor Standards Act).  An employee who has been given dismissal notice or has been dismissed may request the company to issue a certificate giving the grounds for dismissal (Article 22, paragraph (1) and (2), of Labor Standards Act).

working for foreign company in Japan
hired abroad and working in Japan	all subject to Japanese Labor Laws
with non-Japanese nationality

04. Legal Procedure

In the event of dismissal, the following three courses of legal action may be considered. However, in the case of foreign companies, a final resolution mostly requires lawsuit.

・Labor Tribunal	Completed in 3 court hearings, but the company can file a challenge against the Labor Tribunal decision: it often results in merely adding procedures prior to full litigation.
・Civil Provisional Remedies	A petition will be dismissed when the court finds that the employee has certain assets and therefore, preservation is not warranted.
・Civil Litigation	It is the most common legal action and it may be concluded by a settlement before a judgment is rendered.

05. Judgement

In a successful wrongful termination action, the court typically issues a declaratory judgment affirming the plaintiff's continued employment status and contractual rights, while simultaneously ordering the defendant company to remit back pay for the period from termination to judgment.