Tell the Labor Contract Act from the Labor Standards Act by how each is enforced: civil effect between the parties, or penalties and supervision.
State who holds the employment relationship and who holds the relationship of work instructions in worker dispatch, and tell dispatch apart from a contract for work.
Separate the procedure that makes overtime possible from the systems that change how working hours are determined.
The Labor Contract Act労働契約法 sets the basic rules for how a labor contract between a worker and an employer is formed, changed and ended.
A labor contract rests on the principle of agreement: the worker and the employer form and change it by agreeing as equals. A dismissal that lacks an objectively reasonable cause and is not seen as appropriate by general social standards is void as an abuse of rights. The Act also sets the conversion rule: once a fixed-term contract has been renewed past a combined 5 years, the worker can apply to switch to a contract with no fixed term.
How to rememberAs the word "contract" in the name suggests, think of it as special rules that apply civil-law contract thinking to the relationship between employer and employee.
Exam points
Mix-upThe Labor Contract Act労働契約法 is a set of civil rules between workers and employers, and in principle it carries no penalties for violations. The law that enforces minimum working conditions through penalties and government supervision is the Labor Standards Act労働基準法.
The Labor Standards Act労働基準法 sets minimum standards for working conditions such as wages, working hours, days off and leave, and punishes employers who violate them.
Minimum standards under the Labor Standards Act (examples)
Working hours: in principle up to 8 hours a day and 40 hours a week
Breaks: at least 45 minutes when work exceeds 6 hours, and at least 1 hour when it exceeds 8 hours
Days off: in principle at least 1 day each week
Annual paid leave
How wages are paid
Any part of a labor contract that sets conditions below these standards is void, and the legal standard applies in its place. The statutory working hours are in principle 8 hours a day and 40 hours a week, and having people work beyond them requires a separately defined procedure. Labor Standards Inspection Offices are set up in each region to check that the standards are kept.
AnalogyIt is like a line drawn under working conditions that says "never go below here", and a company that crosses it gets penalized.
How to rememberThink of "standards" as a ruler: one law that measures the minimum line for every company with the same ruler, whatever its circumstances.
Exam points
ExamThe law that sets the minimum level employers cannot go below across employment conditions as a whole, including wages, leave and working hours, is the Labor Standards Act労働基準法.
The Worker Dispatch Act労働者派遣法 covers worker dispatch, in which a worker employed by a dispatching agency (a staffing company) works under the direction of a client company (where the work is actually done), and sets rules for running such businesses properly and protecting dispatched workers.
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The dispatching agency and the client company sign a worker dispatch contract, and it is the dispatching agency, as the employer, that pays the worker. A contract for work, by contrast, is one where the contractor directs its own workers to finish the job; if the ordering party gives instructions directly to the contractor's workers, it becomes disguised contracting, which is dispatch in substance but escapes dispatch rules. Double dispatch, where a client sends a dispatched worker it has received on to yet another company, is prohibited.
AnalogyPicture someone who stays on the books of their own office but goes out to another site and works under the site manager's directions. Their pay still comes from their own office.
Exam points
ExamOnly the dispatching agency has an employment relationship with a dispatched worker; with the client company, the worker has a relationship of work instructions指揮命令関係, since the client directs the work. The person who approves the hours worked each day is also the client company's manager, who gives those instructions.
ExamExcept for temp-to-perm dispatch紹介予定派遣, which assumes later direct hiring, the dispatching agency decides which worker to send, and the client company can only state conditions such as the skills the work needs.
ExamWhether an arrangement is a contract for work or dispatch depends not on where people work but on who directs the workers. If the ordering party under a contract for work instructs the contractor's workers directly, it is illegal disguised contracting偽装請負.
An Article-36 agreement36協定 is a written labor-management agreement between an employer and a workers' representative that allows overtime work beyond the statutory hours, or work on days off.
Default: up to the statutory hours
Labor and management put the agreement in writing
File with the Labor Standards Inspection Office
Overtime and holiday work within the agreement
Only after filing can overtime and holiday work take place within the range the agreement sets.
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On the workers' side, the agreement is signed by a labor union organized by a majority of the workers, or, if there is none, by a person representing a majority of the workers. The agreement states things such as the reasons for overtime and holiday work and the upper limit on hours. Making people work beyond the agreement's range violates the Labor Standards Act.
AnalogyThe door to overtime is locked by default, and it opens only after the company and the workers' representative make a key together and register it with the authorities.
How to rememberThe "36" is an article number: the agreement is set out in Article 36 of the Labor Standards Act, which is why it is called a "saburoku" (three-six) agreement in Japanese.
Exam points
ExamPutting an Article-36 agreement36協定 in writing between labor and management is not enough; overtime or holiday work becomes allowed only once it has also been filed with the Labor Standards Inspection Office労働基準監督署.
A flextime systemフレックスタイム制 fixes the total working hours for a set period (the settlement period) and lets workers decide their own daily start and end times within that total.
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Many workplaces set core time, when everyone must be at work, and flexible time before and after it, when people can choose when to arrive and leave. What workers can move is the time of day they work, and they still have to meet the total hours for the settlement period.
AnalogyIt is like a club that only fixes the total practice time for the month: apart from the session when everyone gathers, members choose when to come and go.
How to remember"Flex" means "able to bend". What bends is the time you arrive and leave; the total hours for the period do not.
Exam points
ExamWhen core timeコアタイム is set, workers can choose their arrival and departure times only within the flexible timeフレキシブルタイム before and after it, and core time itself is not part of that choice.
A discretionary work system裁量労働制 leaves how the work is done and how time is allocated to the worker's discretion, and deems the worker to have worked the hours agreed between labor and management, regardless of the actual hours.
It is limited to the scope the law defines: specialized work where the method must be left to the worker, such as research and development or information system design, and work planning, drafting and researching the business. If the deemed hours are set at 7 a day, the worker is treated as having worked 7 hours that day whether the real figure was 5 or 9. Introducing it requires steps such as a labor-management agreement or a resolution of a labor-management committee.
AnalogyIt is like a job where you are trusted with how to finish it, counted as "one day's work" rather than by the time it took.
Exam points
Mix-upA flextime systemフレックスタイム制 adds up the hours actually worked over the settlement period. A discretionary work system裁量労働制 counts working hours by a figure set in advance, not by the actual time.
Flextime system vs. Discretionary work system
Aspect
Flextime system
Discretionary work system
Key differenceHow hours are counted
Actual hours are totaled over the settlement period
The set hours are deemed worked
What the worker decides
Start and end times
How to do the work and allocate time
Eligible work
Any type of work
Only the specialized and planning work the law defines
The minimum wage最低賃金 is the lowest wage amount set by the state under the Minimum Wage Act, and employers must pay at least that amount.
Even if labor and management agree on a wage below the minimum, that part is void and the contract is treated as made at the minimum wage. Minimum wages include the regional minimum wage, set for each prefecture, and the specific minimum wage, set for particular industries. They apply whatever the form of employment, including part-time and casual workers.
AnalogyIt is like a floor laid under wages. Whatever is promised, wages cannot drop below it.
Exam points
Mix-upThe minimum wage最低賃金 sets only the lower limit of the wage amount, and its basis is the Minimum Wage Act. The law that sets minimum standards for working conditions as a whole, covering working hours and days off as well as wages, is the Labor Standards Act労働基準法.
The Labor Contract Act rests on the principle of agreement between labor and management and makes a dismissal without an objectively reasonable cause void.
The Labor Standards Act draws the minimum line for working conditions, and overtime and holiday work are allowed as exceptions only after an Article-36 agreement is signed and filed.
In worker dispatch, the worker's employment relationship and the relationship of work instructions sit with two different companies.
Where an agreed wage is below the minimum wage, that part is void and the minimum wage amount applies instead.