Japan’s employment laws, as Japanese companies apply them to non-Japanese

On one of the topics I mentioned yesterday.

People coming from overseas are ordinarily clueless about the informal system of employment relations in Japan. Even as a lawyer back home, I was taken aback by some of the peculiarities. And through experience here, how very little of the rules are honored. It’s not even “more honored in the breach”—it’s how the whole thing is abused and laughed at in the hands of people with power.

I’ve mentioned before, but Arudou Debito has put out a handbook, along with Higuchi Akira, that explains the basics of the actual law.

I’m just paraphrasing here—you really should buy the book—but the duo describe two of the main employment statuses here:

sei sha’in or regular employment,


keiyaku sha’in or contract employment.

Sei sha’in is also referred to as “kikan no sadame nai” (without an end date). It is continuing employment for which you can only be dismissed for cause. If you want to leave your job, you give notice.

Keiyaku sha’in is “kikan no sadame ari” (having an end date). This is strange. It is considered “part time work”, even if your contract states 40 hours a week. And it isn’t “at will” employment like we know in Amerca, where your employer can send you out the door for cause or for no cause at all.

It isn’t something that you can casually leave either, with notice like regular employment! The employer is agreeing to employ you for a set period, and you, in turn, are agreeing to perform the work for that period!

Besides these two types, are two others referred to as being:

haken roudousha – a dispatch employee


gyomu itaku – a subcontractor

With dispatch, your actual employer is the American equivalent of a temp agency. Except in an American temp agency, the idea is that you aren’t really “on the rolls” when you aren’t working, and in the Japanese one you are still technically “on the rolls” but not earning any money. The dispatch company sends you to a client, who uses your services. But your employer is still the dispatch company. On paper, the dispatch contract is supposed to be for a fixed period, like contract work. But in reality, client companies screw with that all the time it seems.

A subcontractor in Japan is fundamentally the same as in America. You are “independent” (not an employee), and allegedly you set your own work rules and work independently. It’s as if you are selling your services at arms length.

Back in October, I had blogged that relationship trumps contract, which in turn trumps law. Here was the chart:

And if we rank the value of employment STATUSES like this:


I can now describe what goes on in Japan.

For the ordinary enfranchised Japanese, sei sha’in is without question. After all, that’s the law. And usually, a Japanese who is on the outs with management “simply” has his life made difficult in the sei sha’in roles until he “realizes” he should “think about his future” and find another job. But for the majority of everybody else, it’s just another day.

The contract employment relationship usually appears with Japanese in disenfranchised groups (young people, women, indigenous minorities). Allegedly this provides all this “flexibility” and freedom to pursue “lifestyle choices”, but in fact it’s just a way for the sei sha’in to create and exploit a disposable workforce.

By the way, there are elite workers who receive a contract. I am sure that baseball managers here work on contract. But it’s a contract for multimillions in dollar value, so it’s hardly an example of the class.

When it comes to foreigners (“non-Japanese”), about the highest level ordinarily obtainable is this contract status.

As one example, poster J. Hart on debito.org points out a situation where he had been employed on a series of thirteen annual contracts, before being “non renewed”. Thirteen! Even Japan’s Labor Contract Law says that the use of the contract system is not supposed to be abused in this way (if a person is receiving a series of short-term contracts, they are supposed to be accorded sei sha’in status). I think this is Article 17 part (b) of the Labor Contract Law, but I leave it to reader to do their own research.

J. Hart, though sounds like a foreigner, so . . .

when the law says that someone renewed on contract 13 times (!) should be accorded sei sha’in status, and isn’t, we easily see that RELATIONSHIP trumps CONTRACT trumps LAW. WHO you are matters more than the fact that we have a contractual dealing with you, and never mind the fact the law suggests you should already be sei sha’in.

Another example comes from the world of the English assistant language teacher or “ALT”. ALT is a strange creation, since most of these people work as an assistant to an English teacher who is a Japanese person. But the Japanese person doesn’t really know English, and, so, who is the teacher? Who is the assistant? But that’s another post.

In the ALT world, a handful of Japanese created dispatch businesses out of supplying ALTs to Japanese junior and senior high schools. What goes on is that the native English speaker is sent, via the Haken dispatch system, to the school on behalf of the dispatch company.

For example, for several years a website called http://www.hvk.org (now defunct) had a post up (as recently as November) showing how Interac-LDS Blogspot.com has had a post up showing how Selnate Corporation of Provo, Utah had made a big business in Japan of providing dispatch ALTS to junior and senior high schools around Japan, through its “Interac” subsidiary. PDF of this here: Teaching English in Japan.

According to the Latter Day Saint’s (Mormon) own website, a man named Niiyama Yasuo was at the head of that dispatch empire.

The allegation is that Selnate/Interac took $5,000 as a dispatch “fee” per worker, while it paid the dispatch ALT worker $25,000 a year. So a 17% cut of someone else’s work, just for the “right” to be the assistant to a Japanese language teacher who in all likelihood was not fluent and could not explain grammar and usage except out of a book. And then, basically be a revolving door employee. (Let’s not mention that a Japanese Mormon is, in the meantime, getting rich of it all.)

Things like this.

Sound like fair dealing? Or sleazy smells and corruption?

Another one:

GABA is an English conversation outfit based in Tokyo but with branches throughout Japan. In their business model, the people who work for them (or rather, do work at their facilities) are subcontractors, itaku, not employees. Even though GABA controls almost everything about the work they do to what they wear.

Again, General Union in Osaka took up the matter to get a determination whether the people who are doing what they do at GABA for GABA are employees or subcontractors.

The arrogance of it all, that foreign workers in Japan are even forced to take it to this level. Sure, “it goes on everywhere”. But I know that in New Jersey, criminal penalties are attached to instances where an employer tries to disguise employees as “independent contractors”.

So yes, it might go on everywhere. But usually the stakes to the cheating employer are much greater.

Again? Fair dealing? Or sleaze and corruption?

If you notice the pattern, there is a “push down” by Japanese employers of people who aren’t Japanese, down that hierarchy of:


People who should be sei sha’in end up either on keiyaku, haken or even, incredibly, argued about that they are really itaku. And no one ends up in jail over it,like they would in New Jersey.

3 thoughts on “Japan’s employment laws, as Japanese companies apply them to non-Japanese

  1. Just two points: Keiyaku sha’in can indeed quit during the course of their contract. I have been in that status, and have quit. I have also worked with many other keiyaku sha’in who have quit in the middle of their contract. It is not an issue.

    As for a keiyaku sha’in becoming a sei sha’in: Japanese labor law specifies that, after being employed for three consecutive years at a company as a “part time” or “full part time” worker, if the employee requests to be made sei sha’in the company is legally obligated to make them one. However, the employee has to ask. The company cannot unilaterally make a part-time or full-part-time worker a regular employee. For just one reason, the employee may not want to be a regular employee, especially if they are someone’s dependent (for tax, insurance and pension reasons).

  2. LB, thanks for your comment.

    Here is what the Labor Contract Act of 2007, as translated at the following site, http://www.jil.go.jp/english/laborinfo/library/documents/llj_law17.pdf has to say about labor contracts.

    Who knows how the Japanese interpret the actual (Japanese language) statutory law, but to me the act says two things:

    1) If you agree to a keiyaku position, you are really obligated to perform it to the end. That’s Article 3’s discussion about good faith. I know “breach” here is about as everyday as it gets. But the law holds workers to a standard. I’ve heard two anedotes where a prospective employer did ask if an applicant had finished a contract.

    2) Article 17 says nothing about having to ask to be made a “sei sha’in”. Only that repeated renewals are discouraged.

    Here are the cut-and-pastes:

    “(Principles of a Labor Contract)
    Article 3.
    (1) A labor contract shall be concluded or changed between a worker and an employer by agreement on an equal basis.
    (2) A labor contract shall be concluded or changed between a worker and an employer while giving consideration to the balance of treatment according to the actual conditions of work.
    (3) A labor contract shall be concluded or changed between a worker and an employer while giving consideration to the harmony between work and private life.
    (4) A worker and an employer shall comply with the labor contract and shall exercise their rights and perform their obligations in good faith.
    (5) Neither worker nor employer shall, when exercising his/her right under the labor contract, abuse such right.”

    “Article 17.

    (1) With regard to a fixed-term labor contract, an employer may not dismiss a worker until the expiration of the term of such labor contract, unless there are unavoidable circumstances.

    (2) With regard to a fixed-term labor contract, an employer shall give consideration to not renewing such labor contract repeatedly as a result of prescribing a term that is shorter than necessary in light of the purpose of employing the worker based on such labor contract.”

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