What Are the Options When Faced With Employees in Japan Who Appear to Be Performing Lowly?
Hideki Thurgood Kanoh of Anderson Mori & Tomotsune explains the complexities of handling employees whose performance is deemed as being low.
Hideki Thurgood Kanoh
View firm profileIn this interesting video, Thurgood Kanoh describes very well how it is not easy to terminate employees in Japan. A case would need to satisfy several elements to enable unilateral termination to be legal within employment law in the country.
- Performance appraisal – an employee would need to score “D”, the lowest score.
- How did the employee “achieve” a “D” rating?
- The alleged “poor performance” may not be attributable to her or him.
- Has the company given a reasonable period of time for the employee to improve?
- Has the employee been subject to a performance improvement programme (PIP), or were they transferred from the position in which there was supposed poor performance to another position to enable the possibility of increased performance?
If these factors are not all met in terms of proving that no remedy can be found, options of the business involved include moving the employee to another position within the firm, peaceful settlement, and taking the risk of terminating the employee regardless. Moving the employee to another role is seen, in Japan, as providing them with a reasonable opportunity to continue working for the same organisation and to show improvement in terms of performance. They may be better at a different job for any number of reasons.
Other possibilities such as peacefully reaching an agreement with the employee for them to resign, or simply terminating their contract, are opposing attitudes with the same outcome of the employee no longer remaining employed by that employer. If an agreement is reached, it will involve a payout, with regards to which:
“The law does not mention anything. … There is no standard.” (23:56)
Therefore, it may be worked out in any one of a variety of ways. One year’s service may “equate” to one month’s salary, for example. If the employee is a member of a labour union, or if they are represented by a lawyer, the payout will most likely be far higher. This process would also result in the firm’s costs and time-spent being much greater. Peaceful resolution would be preferred in the case of pursuing ending the employment of the employee, even if the cost grows, as the comparable costs of fighting union or pure legal representation will be larger.
If an employee is terminated wrongfully, at least in the eyes of the law, which may indeed be correct as the employee may, for instance, only be performing lower than the company would like, that employee, then ex-employee, would be able to seek legal assistance and would have a strong case against the firm, which could be far worse for the business than any of the other options that were available.
Therefore, if the organisation decides that they want to terminate the employee’s contract, the advice of Thurgood Kanoh is:
“I would recommend that your company should try to come up with some ‘sweetener’ and enter into a resignation agreement.” (31:07)
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