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Unlimited Term Employment Contract for Foreign Workers in Japan

There are several types of employment contracts in Japan, that are; one-year contract, a three-year contract, a five-year contract, and an unlimited term contract.

Foreigners are less likely to be offered permanent contracts as they tend not to remain in Japan or working with the same company for a lifetime of employment.

However, you can apply for an unlimited term contract even though you are a foreigner.

When to apply an unlimited employment contract
If you are employed under a one-year, three-year, or five-year contract, you can upgrade your contract into an unlimited contract on the first day of your sixth year of employment. Your employer must accept the application and must give you an unlimited term contract after this current contract expires. You can apply from the start of any contract which will carry you into the sixth year and you will receive an unlimited term contract at the end of that contract.

Notes: Not all employers adopt this regulation especially if you are working on academics institutions such as a university. Some employees of universities are not entitled to apply until the beginning of their tenth year.

Below are the professions that should follow the ten-year contract rule.

The profession that stated on Research and Development Law Article 15.2 (Kenkyu Kaihatsu Kyouka Ho):

  • Researcher or engineer (including assistant for experiment or research in science and technology or development in science and technology) who concludes the limited-term labor contract with a research and development agency or a founder of a university etc.
  • Those who are engaged in the management of experiment or research concerning science and technology, development concerning science and technology, planning for spreading or implementing of the achievements, fundraising, acquisition of the intellectual property or utilization, etc. (which requires expertise and professional expert) and concludes the limited-term labor contract with a research and development agency or a founder of a university, etc.
  • Researcher or engineer for science and technology who is entirely engaged in experiment or research concerning science and technology, development concerning science and technology or planning for spreading or implementing the achievements upon the contract including an agreement, etc. between an organization other than the research development agency and the university such as an experiment research agency and the research development agency or the universities such as an experiment research agency and who concludes the limited-term labor contract with any agency such as the said experiment research agency other than the research development agency or the universities.

University Teachers as stated on Ninki Ho Article 4:

  • Teachers who work at the educational/research institution where securing various human resources is strongly required in the light of the characteristics of the field or method is taken in the education/research conducted by the institution in case the education/research is advanced, interdisciplinary or comprehensive and so on.
  • Assistant Professor.
  • Teachers whose job conducting the education/research in fixed-term based on the specific plan the university decides or participates in.

The two above laws are an exception and do not cover all limited-term contract teachers, but only limited-term contract teachers at universities whose job has a research element.

For more in-depth information on this topic, please read the article from the Japanese General Union about Special Exception to Unlimited-term Conversion: The “Ten-Year Rule”

Applying for Unlimited Term Employment Contract

How to Apply
The application is simple. Once you become eligible, you can give your employer an application that must be accepted. You can download an application that the union has made or you can simply ask your employer.

What to do if my employer rejects the application and decides that there will be no unlimited contracts after the fifth year of employment?
Basically, your employer must accept your application for the unlimited contract as stated on the notice posted by the Ministry of Labour in February 2019:

“It is not desirable for the employer considering the spirit of the Labor Contract Act to terminate the employment contract just before the worker gets the right to apply for the conversion to unlimited-term contract in order to purposefully evade the application of the conversion rule.”

Japanese Ministry of Labour on February 2019

The employers are prohibited to do the below actions to avoid the unlimited-contract:

  • Unilateral establishment of the contract-term upper limit (e.g. 5 years) in the working regulations just before the contract-term of the worker exceeds 5 years which gives the worker the right to apply for the conversion to unlimited-term contract and terminating the contract before the worker gets the right based on this working regulation.
  • Setting the contract-term upper limit, setting the cooling period formally, promising re-employment after the cooling period to the worker and then terminating the contract.

Below are the things that should be noted when you are applying for the unlimited term employment contract:

  • The law is clear in that there should be no worsening of working conditions when converting to an unlimited term contract. Therefore, your employer can’t add any clauses to make the unlimited contract less desirable.
  • Getting the unlimited term employment contract doesn’t mean you can’t be fired. No, it simply means that an employer can no longer just wait till your contract has expired to get rid of you; now they must have a socially acceptable reason.
  • The Labour Contract Law, which the unlimited term contract is based on, contains no language regarding age. Therefore, even if you are over the retirement age, you can still apply and the employer still must accept the application How long you can remain on an unlimited term contract (if you are over or close to the retirement age at the time of application) after it is accepted is not 100% clear, but the ministry has stated that the retirement age cannot nullify your rights to have some benefit under the law.
  • As for part-time workers, getting an unlimited contract does not mean that you got a full-time contract. It simply means that the only difference between your current job now and when it becomes unlimited is that the end date will be removed.

Please be aware that this article has been written based on Labour Rights Education Seminar Booklet written by Japanese General Union

Notes for the readers:
Please use this article only as a reference, not as a legal guideline. Therefore, will take no responsibility or liability, so far as legally possible, for any consequences of your actions.

This article is written in January 2020.

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