The rule is mechanical. The employer either tells the employee at least 30 days before the dismissal date, or pays notice allowance of at least 30 days' average wages, or combines them, so that 10 days' notice plus 20 days' pay is valid. Average wages are calculated from the pay of the previous three months. The allowance must be paid by the time the dismissal is announced if it replaces notice.
There are two kinds of exception. First, the employer can dismiss without notice if the head of the Labour Standards Inspection Office certifies either that a natural disaster or similar event has made the business impossible to continue, or that the dismissal is caused by the employee's own serious misconduct. The certificate is not automatic; the inspectors examine the facts, and it is normally sought before the dismissal. Second, Article 21 excludes some workers: day labourers employed for under a month, people on contracts of two months or less, seasonal workers on contracts of four months or less, and probationers in their first 14 days. Once those periods are exceeded, the notice rule applies.
An employee who is dismissed can ask for a written statement of the reasons, and under Article 22 the employer must provide one. Breaching the notice rule is a criminal offence under Article 119, punishable by up to six months' imprisonment or a fine of up to 300,000 yen, and a court can order an additional payment up to the unpaid amount.
What it means for a foreign employer
- Pay in lieu does not buy validity. Paying 30 days and walking someone out of the building still leaves the dismissal open to challenge as an abuse of rights.
- Summary dismissal needs the certificate. Even for gross misconduct, the safe course is to apply to the inspection office first. A disciplinary dismissal without notice or certification is a separate breach.
- The reasons letter becomes evidence. Whatever you write when asked for reasons will be read by the tribunal. Get it reviewed by Japanese counsel.
- Long-tenured staff expect more than the statute. Thirty days is a legal floor, not a market norm for senior exits, which are usually negotiated.
Sources
- Labour Standards Act, Articles 12, 20, 21, 22, 114 and 119 (penalty as worded since the penal reform in force 1 June 2025).
- Labour Contract Act, Article 16.