Keiyaku shain 契約社員

An employee on a fixed-term contract. Also written contract employee, fixed-term employee, yuki koyo.

Keiyaku shain means contract employee, and in practice it means fixed term. Companies use it for specialists hired for a project, for staff re-employed after retirement, for roles they are unsure they will keep, and sometimes as an extended trial before offering regular status. Pay can be high, but the contract usually comes without the retirement allowance and promotion track that seishain receive.

The Labour Standards Act caps a single fixed-term contract at three years, or five years for highly specialised workers who meet set criteria and for workers aged 60 or over. There is no cap on the number of renewals, but the Labour Contract Act gives renewed staff real protection. Under Article 19, if a contract has been renewed so often that ending it looks like a dismissal, or the employee has a reasonable expectation of renewal, the employer needs objectively reasonable grounds not to renew. Ending a contract before its term is even harder: Article 17 requires "unavoidable reasons", a stricter test than for dismissing a regular employee.

After a total of more than five years, the five-year conversion rule lets the employee demand an open-ended contract.

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.