Dismissing an employee in Japan

A reasonable cause is required

Under Article 16 of the Labour Contracts Act, a dismissal that lacks an objectively reasonable cause and is not socially acceptable is invalid. One mistake is rarely enough; courts look at the whole situation.

You must also list the grounds for dismissal in your work rules.

Notice or pay in lieu

• Give at least 30 days’ notice, or
• Pay at least 30 days’ average wages instead (解雇予告手当), or
• Combine them — for example, 10 days’ notice plus 20 days’ average wages
• If the employee asks, give a written statement of the reason without delay

Labour Standards Act Articles 20 and 22.

Dismissals the law forbids

• During leave for a work injury or maternity leave, and the 30 days after
• Because the employee reported the company to the Labour Standards Inspection Office
• Because of union membership, gender, marriage, pregnancy or childbirth
• Because the employee asked for or took childcare or family-care leave

Fixed-term contracts and redundancies

• Ending a fixed-term contract early needs an unavoidable reason — stricter than for permanent staff
• Not renewing a contract renewed 3+ times, or held over 1 year, needs 30 days’ notice
• Redundancies are judged on necessity, efforts to avoid them, fair selection and explanation
• Encouraging someone to resign is allowed only if they decide freely

Clear contracts help from day one — see Employment contracts. For a foreign employee, the visa side also changes; see Hiring foreign employees.

FAQ

Sources

• Rules on ending employment contracts (労働契約の終了に関するルール) — Ministry of Health, Labour and Welfare

This page is a plain-English summary, not legal advice. The official Japanese guidelines always take priority.