Japanese labour law sets many hard rules and then allows the employer to depart from them if the employees at the workplace agree in writing. That agreement is a labour-management agreement. The counterparty is a union representing a majority of the workers at the workplace, or, if there is none, a representative elected by the majority. The best known is the 36 Agreement on overtime, but there are many others.
Under the Labour Standards Act they include agreements to deduct anything other than tax and social insurance from wages, to manage employees' savings, to use flextime, monthly or annual variable working hours, deemed hours for work outside the office or specialist discretionary work, to stagger break times, to fix the timing of part of the annual leave, to allow leave in hourly units, and to pay premium overtime above 60 hours as substitute leave. The Childcare and Family Care Leave Act uses the same device to exclude certain employees from leave rights. Some must be filed with the Labour Standards Inspection Office, including the 36 Agreement, annual variable hours and flextime with a settlement period of more than one month. Others, such as the wage deduction agreement, need only be signed and kept.
The legal effect is specific. A labour-management agreement removes the illegality: overtime under a valid 36 Agreement is not a crime. It does not by itself oblige any employee to do anything. That obligation has to come from the work rules or the contract. The Supreme Court confirmed this structure for overtime in the Hitachi Musashi Plant case in 1991.
What it means for a foreign employer
- List which ones you need. A subsidiary that deducts a staff canteen fee or a company social club fee from pay without a wage deduction agreement is in breach.
- The representative must be valid. An agreement signed by a manager, or by someone the country head picked, may be void, and so is everything that rests on it.
- Agreements are per workplace. Each office needs its own agreements and its own representative.
- Keep the work rules in step. An agreement on flextime or hourly leave without matching provisions in the work rules leaves the system half built.
Sources
- Labour Standards Act, Articles 18, 24, 32-2 to 32-4, 34, 36, 37, 38-2, 38-3 and 39.
- Act on Childcare Leave, Caregiver Leave and Other Measures, Articles 6 and 12.
- Supreme Court, Hitachi Musashi Plant case, 28 November 1991.