Five-year conversion rule 無期転換ルール

A fixed-term employee's right to an open-ended contract after five years. Also written muki tenkan rule, indefinite-term conversion, Article 18 conversion.

The rule is simple to state. Once an employee's fixed-term contracts with the same employer add up to more than five years, with at least one renewal, the employee may ask for an open-ended contract. The employer is deemed to accept. The new contract starts when the current one ends, and unless the parties agree otherwise, every term except the end date stays the same. Conversion gives job security, not seishain status: pay, duties and benefits do not change automatically.

Breaks can reset the count. A gap of six months or more between contracts starts the clock again, and a shorter gap is enough where the earlier contracts totalled less than a year. There are two main exceptions. Researchers and teaching staff at universities and research institutions have a ten-year period instead of five. Under a separate special measures act, highly skilled professionals on fixed-duration projects can be exempt for up to ten years, and workers re-employed by the same employer after retirement are exempt, but only if the employer has had a plan approved by the prefectural labour bureau.

Since April 2024, employers must tell eligible employees at each renewal that they can apply, and what their terms would be after conversion.

What it means for a foreign employer

Sources

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General information for employers, not legal advice. Thresholds and dates are checked against the sources listed and dated above; confirm anything you act on with a Japanese employment lawyer or a licensed labour and social security attorney.