In a shukko, the employee stays on their original employer's books but goes to work at another company, often a group subsidiary, a supplier or a customer. The host company directs their daily work. Pay may come from either side, with costs recharged between them. The assumption is that the employee eventually returns.
Japanese companies use shukko for many things: building skills, staffing subsidiaries, deepening ties with partners, and, for older employees, easing them out of the main company without dismissal.
Courts have held that an employer can order a shukko without the employee's individual consent if the work rules or a collective agreement provide for it and the terms protect the employee. The order is still invalid if it is an abuse of the employer's rights. Tenseki, a full transfer in which the employee leaves one company and joins another, always needs the employee's consent.
What it means for a foreign employer
- Read "seconded to" on a CV carefully. A candidate on shukko is still employed by the parent. Their pay, their return path and the parent's view of the move are all part of what you are negotiating against.
- A shukko late in a career can be a quiet exit. A senior manager sent to a small affiliate in their fifties may be open to a move.
- If you use secondment yourself, put it in the work rules. Without that basis, you need each employee's agreement.
Sources
- Labour Contract Act, Article 14 (secondment orders and abuse of rights); Supreme Court, Shin Nippon Steel case (2003).