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Home > Archives > Q & A

Q & A

Human Resource Management
Q3: What sort of legal issues do Japanese subsidiaries of overseas corporations face with regard to labor?
A3:

First, mandatory worker protection legislation such as the Labour Standards Law, the Occupational Health and Safety Law, and the Minimum Wage Law applies, as a general principle, to all enterprises located in Japan, regardless of whether they are owned by Japanese or foreign nationals, and regardless of whether they are incorporated in Japan or overseas. However, the question of which country's laws apply with regard to employment contracts is left to the discretion of the parties to the contract, as a general rule, so long as there is no violation of public policy or of mandatory laws or regulations covering international labor relations. Consequently, whether the laws of Japan or of the country in which the headquarters of an overseas corporation is located apply depends on which country's standards are used as the basis for drawing up the employment contract. There is a large number of judicial precedents in which the selection of governing law was not touched on but the laws of Japan were held to apply in cases where the employee's actual place of work is normally in Japan. There have also been cases, in which mandatory provisions such as the Labour Standards Law and the employment contract are both involved, where the connection between the selection of governing law by the parties to the contract and the scope of application of the mandatory provisions became an issue.

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