"Justifiable cause required"--A proposal to introduce legislation designed to clarify and stipulate the rules and regulations by which companies may dismiss their employees

In last December's JLF Volume 9, we reported on moves to legislate the rules and regulations by which companies may dismiss their employees. At a meeting of the Labor Policy Council's Labor Conditions Subcommittee, held in mid-October, the Ministry of Health, Labour and Welfare submitted a proposal to legislate such dismissal rules and regulations.

The Ministry also proposed to incorporate into the Labor Standards Law stipulations that compel companies to show "justifiable cause"when dismissing their employees, and to include a section on dismissals in a company's work rules. The aim is to prevent problems from occurring when a labor contract expires.

According to the conference minutes, members representing the labor side stated that, since the so-called legal principles concerning the abuse of the right of dismissal and the four requirements for resolution and dismissal have not yet been legalized, such rules and regulations should be made thoroughly known as something for which employers should naturally be held responsible. The members also proposed that the announcement of the causes for dismissal and the period of announcing the impending dismissal be reexamined, and urged that the rules regarding changes in labor conditions and their procedures, as well as rules pertaining to the procedures and requirements for temporary assignments, transfers, and reassignments also be reexamined.

Members representing the employer side, meanwhile, acknowledged that judicial precedents establishing the legal principles governing abuse of the right of dismissal was as necessary as rules and regulations. However, they opposed the legislation of the four requirements for resolution and dismissal, and the stipulation of dismissal rules and procedures in the Labor Standards Law, which is a penal law. The reason, they claimed, was that they constituted administrative interference with the autonomy of the labor and management. The members also saw little or no need to discuss the procedures and requirements for temporary assignments, transfers, and/or reassignments, since they found few or no problems with the current status.

The proposal to stipulate a section on dismissals in a company's work rules was made from the perspective of preventing disputes from arising and expediting the dispute settlement process. It is designed to reexamine the existing Labor Standards Law that features "matters regarding retirement" only.

The Subcommittee's point at issue that is drawing notice is that, if a court rules a dismissal as invalid, the plaintiff will not only be allowed to return to his or her former post, but that a settlement may also be reached with monetary compensation for damages.

It appears that examinations of the dismissal rules and procedures have entered the final, crucial stage. It will be interesting to observe how the parties will adjust and coordinate conflicts between labor and management, and how the three parties involved--labor, management plus the government--will resolve them by overcoming the differences in their views and expectations.