Introduction
In Japan, companies consistently having 10 or more employees are legally required to prepare and submit Work Rules (Employment Regulations) to the Labour Standards Inspection Office.
For smaller organizations, while not mandatory, having well-drafted rules is strongly recommended as a safeguard against potential disputes.
As workplace issues such as harassment and labor conflicts continue to attract attention, Work Rules are no longer just compliance documents; they are an essential foundation for protecting your company and maintaining a healthy work environment.
This month, we would like to highlight some of the key risks associated with not having work rules in place.
Please note that the examples provided here are limited, and in practice, various other risks may arise depending on the circumstances of each workplace.
1. Disciplinary measures may be unenforceable
Actions such as suspension or dismissal may be judged invalid if not clearly provided for in the rules or if employees were not properly notified.
2. Unclear standards of conduct
Without written guidelines, even reasonable instructions may be perceived as unfair treatment, leading to
disputes. For instance, issuing a warning to an employee concerning their appearance or work attitude, when not grounded in the code of conduct stipulated in the Work Rules, runs a risk of being regarded as harassment or discrimination.
3. No framework for managing side jobs
Secondary employment can pose risks such as overwork, conflicts of interest, or data leaks. Rules requiring prior approval enable effective management of such conditions.
4. Challenges in applying retirement policies
Without explicit provisions, employees may remain indefinitely, resulting in rising costs and stalled workforce renewal.
5. Uncertainty in handling medical leave
Lack of clarity on leave duration and return-to-work conditions may create unnecessary conflict.
6. Loss of access to subsidies
Many government subsidies require properly established Work Rules as a prerequisite.
7. Difficulty addressing underperformance
Salary reductions or demotions cannot be enforced without clear legal basis in the rules.
A salary reduction that is not clearly stipulated in the Work Rules or Employment Contract is often deemed unlawful in the event of a labor dispute.
Conclusion
For businesses with 10 or more employees, Work Rules are a legal requirement. For smaller companies, they are a best practice for risk management.
More importantly, drafting Work Rules only after issues arise will more than likely be seen as an “unfavorable change” for employees and will also be considered legally invalid.
Therefore, preparing Work Rules in advance ensures better compliance and smoother labor relations to protect the company and build trust with the employees.
We recommend that businesses, regardless of size, take timely steps to establish and review these regulations.
ARK Social Insurance And Labor Advisors Corporation provides full support in creating new Work Rules and re-evaluating existing ones. Please feel free to contact us for further assistance.
https://www.ark-outsourcing.com/contact/
https://www.ark-outsourcing.com/contact/
Query on the phone+81-3-6821-9455