1. Accounting (Source: Keiei Zaimu Magazine)
On September 7th, the Justice Ministry’s Legislative Council approved “Summary of company legislative revision”, which includes “Resolution of twisted incentive”. Heretofore, management personnel who are subject to audits have rights of “Appointment & Dismissal of auditors” and “Decision of remunerations for auditors”, but this revision aims to transfer these rights (excluding the decision of remunerations) from management to auditing officers. However, future action on the issue of remunerations is pending.
2. Labor Management（New Rules for Fixed-term Employment Contract Workers ）
In order to address concerns about sudden refusals to renew fixed-term employment contracts after repeated renewals, and to provide better employment security to fixed-term contract workers, the Labor Contract Act has been amended, and the following three regulations have been newly stipulated for appropriate administration of fixed-term employment contracts:
① Transitions from fixed-term contracts to indefinite-term contracts
② Regulation concerning contract renewals (legislation of “doctrine regarding refusal of renewal”)
③ Prohibition of setting unreasonable working conditions for fixed-term contracts by reason of limited duration of such contracts
< Effective date >
② : August 10th, 2012 (date of promulgation)
①and ③: From the date specified by a Cabinet Order within a period not exceeding 1 year from the date of promulgation.
Below are the details of each regulation:
① Transitions from fixed-term contracts to indefinite-term contracts: Labor Contract Act, Article 18
If a fixed-term contract is repeatedly renewed for a total duration exceeding 5 years (*1), the employer must implement a necessary system to promote the transition of such an employee, upon application, from fixed-term employment to indefinite-term employment (*2) .
(*1) In principle, precedent contract periods are not aggregated if there is a more than a 6-month gap between the expiration date of the previous contract and the start date of the current contract.
(*2) The same working conditions under the original fixed-term contract shall apply unless otherwise provided.
② Regulation concerning contract renewals (legislation of “doctrine regarding refusal of renewal”): Labor Contract Act, Article 19 (presently Article 18 until items 1 and 3 come into effect).
The Supreme Court precedent, “doctrine regarding refusal of renewal”, has been legislated (*).
(*) Where a fixed-term employment contract is not substantially indistinguishable from indefinite-term contracts, or there is a reasonable expectation that the employment relationship would continue due to the fact that the contract has been renewed repeatedly, such a contract is deemed as an indefinite-term contract. Moreover, if sufficient grounds do not exist for the refusal of renewal, and if such a refusal would be considered inappropriate in general social terms, the same principle applies.
③ Prohibition of setting unreasonable working conditions for fixed-term contracts by reason of limited duration of such contracts: Labor Contract Act, Article 20
If working conditions for a fixed-term contract worker differ from those for indefinite-term contract workers only because the worker is employed under a fixed-term contract, such a difference must not be considered unreasonable in terms of the duties involved in the work, the scope of personnel relocations, etc.
For more details, please contact our HR Consulting Group.
3. This Week’s Words of Wisdom
Friendship built by drinking last only a night.
(Friedrich Von Logau, German poet)
I think it’s hard to develop a relationship of trust in a day.