Protecting businesses from employment risks, with particular focus on termination and resignation disputes
Employment issues between companies and employees, as well as disputes among employees, are an unavoidable part of business management.
If handled incorrectly, these matters can result in significant legal and financial consequences.
As employee expectations become more diverse and labor laws continue to evolve, some companies find that their internal rules and management practices have not kept pace with current requirements. Furthermore, a major revision of the Labor Standards Act is scheduled for 2026.
Common employment issues include unpaid overtime, dismissal, requests for voluntary resignation, workplace harassment such as power harassment and sexual harassment, and disputes concerning the calculation of working hours.
Japanese labor law provides strong protections for employees, meaning that companies must exercise particular care when addressing employment disputes.
Legal counsel therefore plays an important role not only in resolving disputes after they arise, but also in developing preventive measures to reduce employment-related risks.
MAXWIN Law Office has seen an increasing number of inquiries from corporate clients concerning employee departures and termination.
Under Japanese law, the threshold for dismissing an employee is high, and the applicable requirements are governed by laws including the Labor Standards Act and the Labor Contract Act.
It can therefore be difficult for management to determine independently whether a dismissal is legally justified.
Where objectively reasonable grounds are lacking, a dismissal may be found invalid as an abuse of the employer’s right to dismiss, potentially placing a significant burden on the company.
Some foreign companies may assume, based on practices in other countries, that employment can be terminated relatively easily. In Japan, however, such an approach can lead to labor tribunal proceedings and substantial settlement or compensation payments.
When advising a company that wishes to end an employee’s employment, we first explain the procedures that should be followed and the legal risks associated with dismissal without appropriate steps.
We may then advise the company to carefully document matters such as violations of work instructions, performance concerns, improvement guidance, and other relevant facts so that there is a clear and objective record supporting any future action.
Where it is difficult to proceed through a formal dismissal process, the company may instead consider encouraging the employee to resign voluntarily.
Because the final decision remains with the employee, such discussions may involve proposed financial terms or other conditions.
In some cases, accepting part of the employee’s position and reaching an agreed resolution can help prevent the dispute from escalating further.
MAXWIN Law Office advises companies on how to approach voluntary resignation discussions, how to structure proposed terms, and how to conduct negotiations with employees in a practical and legally appropriate manner.