What the court decided
The employee was an instructor at Kyodo Kumiai Globe, a supervising organisation for foreign technical intern trainees in Kyushu. He visited host companies at least twice a month each, drove trainees, gave day-to-day guidance and interpreted when problems arose. He booked his own visits, chose when to take breaks, could go straight from home to clients and back, and did not receive instructions or report during the day. At month end he submitted daily reports showing start and finish times, breaks, visits and tasks.
He claimed overtime pay. The employer said his field work fell under Article 38-2 of the Labour Standards Act, because his hours were difficult to calculate. The Fukuoka High Court disagreed, relying on the daily reports. The Supreme Court, Third Petty Bench, overturned that part and sent it back. The High Court had not examined whether the reports' accuracy was actually guaranteed; that the employer could in theory check with clients, or sometimes paid overtime from the reports, was not enough.
A supplementary opinion noted that remote and telework arrangements make the question harder to answer by rule of thumb, and each case turns on its facts.
Why it matters
Since the 2014 Hankyu Travel Support ruling, many advisers assumed any reporting system defeats deemed hours. This ruling keeps the rule alive for genuinely self-managed field work, but does not widen it.
Action for employers
- Audit who is on deemed hours. Keep it for roles where staff truly set their own schedule and are not directed during the day.
- Do not rely on daily reports either way. If you pay overtime from reports, be clear when and why.
- Treat telework separately. Constant connection and specific instructions usually make hours calculable.
- Budget for back pay risk. If the rule fails, overtime claims go back three years.
Sources
- Labour Standards Act, Article 38-2.
- Supreme Court, Third Petty Bench, judgment of 16 April 2024, Case No. 2023 (Ju) 365 (Kyodo Kumiai Globe case).
- Supreme Court, Second Petty Bench, Hankyu Travel Support case, 24 January 2014.