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back to index backGLOBALtalk July,  2014


Japan: Proposed amendments to rules on labour dispatch

In March 2014, the Ministry of Health, Labor and Welfare introduced legislation to amend the Worker Dispatch Act. For companies who receive dispatched employees, the main proposed changes to be aware of are:-

- Rules on the permissible dispatch period:

----- The so-called "26 designated fields of services", which are not subject to a strict time limitation under the current Act, will be abolished;

----- Instead, except for certain types of work (the exceptional areas described below), the acceptable dispatch period for the same dispatched worker in the same business unit of the same workplace is up to 3 years;

----- As a general rule, a receiving company can receive dispatched workers at the same workplace for up to 3 years;

----- If the receiving company obtains comments from a representative employee (or a union) representing a majority of the employees, the 3 year period (above) can be extended for another 3 years (and the same applies thereafter) subject to the proviso that the receiving company cannot continue to receive the same dispatched worker for over 3 years in the same business unit of the same workplace. If a receiving company extends the 3 year dispatch term, it must inform its representative employee (or union) representing a majority of the employees about certain matters such as the reasons for the decision promptly after the determination is made.

----- The following are exceptional areas to which the general 3 year rule will not apply (some of these rules are already in the current Act):

---------- if a dispatched employee is employed by a dispatch service provider as a non-fixed term employee (e.g., not a register type dispatched worker), no dispatch time restriction is imposed;

---------- for services relating to incorporation, conversion, expansion, reduction or winding down of a business ("Projects") scheduled to be completed within a specific time frame, the acceptable dispatch period is until completion of the Project;

---------- for services provided for up to 10 days per month, where 10 days represents less than half the normal working days of ordinary employees at a receiving company, the acceptable dispatch period is unlimited;

---------- for the temporary replacement of a worker leaving due to maternity leave, child care leave or nursing leave, the dispatch period is unlimited; and

---------- for a dispatched employee who is designated by ministerial ordinance to be entitled to certain treatment for job security purposes (currently unclear).

- Amended requirements for a receiving company to offer a direct employment relationship

----- A receiving company is required to exercise efforts to directly employ a dispatched worker (except for those falling within the exceptional areas described above), if the receiving company directly hires a new employee for the same job duties in the same work unit in which the same dispatched worker continued to work for over 1 year and the dispatched worker requests to be employed by the receiving company; and

----- A receiving company is required to inform a dispatched worker about terms of employment and other requirements if the receiving company wishes to hire an employee who will work at the place where the dispatched worker is working.

----- The amendment will abolish the current obligations under the Worker Dispatch Act that require a receiving company to offer a direct employment relationship to a dispatched worker if the receiving company has failed to comply with the set time restrictions.

For companies who send dispatched employees, the main proposed changes to be aware of are:-

- Direct Employment Offers

----- The amendments also introduce a requirement that dispatching agencies secure employment for dispatched workers who are expected to work for the Receiving Company, at the same business unit of the same workplace for three years. In such cases, the dispatching agency should make sure that the dispatched worker will be (i) dispatched to other receiving companies, (ii) be given an opportunity to be hired by the dispatching company as a permanent employee or in a position similar after the three-year term passes.

----- While this amendment will be burden for dispatching agencies, it will be beneficial for dispatched workers.

- Elimination of Tokutei Roudousha HakenService Provider License

----- One type of dispatched workers service providers license that is easier to obtain and less regulated (tokutei roudousha haken) will be eliminated and all dispatching agencies will be subject to the other license (ippan roudousha haken) procedures, which impose stricter requirements on applicants.

Source: DLA Piper - GAI




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