Employers in Japan are being urged to prepare for an increase in the number of fixed-term employees applying for permanent employment contracts as the Conversion Rule nears its fifth birthday.
April 1, 2018, will mark five years since rule on conversion of fixed-term employment to permanent employment was enacted to stabilize the employment of fixed-term employees.
Under the legislation, employees can apply for permanent employment if they meet requirements – first, they must have worked for the same employer for at least five years, although this can be under multiple fixed-term employment contracts.
Eligible employees must also apply for a permanent employment agreement before the expiration of their fixed-term employment contract with which the combined contract term exceeds five years.
In a blog post published on Lexology, international law firm Jones Day offered a brief overview of what Conversion Rule means for employers.
“If an eligible employee makes a timely application, a permanent employment contract between the eligible employee and the employer will become effective the day following the expiration date of the last contract,” the firm’s lawyers explained.
“The employment conditions of the permanent contract will be identical to those in the last contract, unless otherwise provided for in a collective agreement, work rules, or employment contract,” they continued.
While the five-year mark is still some time away, employers are being urged to begin their preparations now.
“Since it will take some time to prepare for the Conversion Rule, we recommend that all employers promptly begin their preparations, including revising any applicable rules,” wrote the Jones Day lawyers.
“In addition, employers should take into account that an employer may not legally refuse the renewal of an employment contract with an employee before he or she becomes an eligible employee.”
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