A collective agreement is what a union and an employer sign at the end of bargaining. In Japan it is usually concluded company by company with an enterprise union, and covers pay, hours, bonuses, transfers, union activity at work, and procedures for consultation on restructuring. Under the Trade Union Act it is valid only if it is in writing and signed or sealed by both sides. A fixed term can be no longer than three years. An agreement without a fixed term can be ended by either side with 90 days' written notice.
The parts of an agreement that set standards for working conditions have direct legal effect. A term in a union member's individual contract that breaches those standards is void and replaced by the standard in the agreement. The agreement also ranks above the employer's work rules: work rules that conflict with an applicable collective agreement do not apply to the employees it covers.
As a rule it binds only the union's members. There is one important extension. Where three quarters or more of the workers of the same kind regularly employed at a workplace are covered by one agreement, it applies to the remaining workers of that kind at the workplace as well. A rarely used provision allows a regional extension by ministerial or prefectural decision.
A collective agreement is not the same as a labour-management agreement such as the 36 Agreement. A union can sign both, but they do different jobs.
What it means for a foreign employer
- Inherited agreements bind the buyer. In a share acquisition, the target's collective agreements stay in force, including clauses requiring union consultation or consent before transfers or dismissals.
- Consent clauses are the ones to find. A clause requiring the union's agreement before dismissals can make a restructuring dismissal invalid if it is ignored.
- Lowering terms by agreement is possible but contested. The Supreme Court has held that an agreement can bind members to less favourable terms, unless the union departed from its purpose in concluding it, for example to single out particular members.
- Do not sign casually. Minutes and memoranda signed by both sides in bargaining can themselves be collective agreements.
Sources
- Trade Union Act, Articles 14 to 18.
- Labour Standards Act, Article 92; Labour Contract Act, Article 13.
- Supreme Court, Asahi Fire and Marine Insurance (Ishido) case, 27 March 1997.