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05. Pay Equity Laws
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05. Pay Equity Laws

Extent of Protection

The Reform Act amended the Part-Time/Fixed-Term Employment Act and the Worker Dispatch Act, which came into effect in April 2020, has introduced the requirement for workers to receive fair and equal treatment, irrespective of their job status. Furthermore, the Act prohibits any irrational disparity between ‘regular’ and ‘non-regular’ employees.

With regards to part-time/fixed-term employees, an employer is prohibited from differentiating the base salary, bonus and other benefits, in such a manner that there exists an unreasonable difference between part-time/fixed-term employees and  regular employees. The reasonableness is determined based on: (i) the content of the assignments and the level of responsibility thereof; (ii) the scope of possible changes of such duties and the position; and (iii) other relevant factors, as may be deemed appropriate in light of the nature of such treatment.

An employer is prohibited from discriminating against part-time/fixed-term employees, as compared to regular employees, with regards to their duties and their positions, for the sole reason of being categorised as part-time/fixed-term employees. An employer is required to provide opportunities to utilise welfare facilities that are available to its regular employees, and designated under the government ordinance, to its part-time/fixed-term employees. An employer is obliged to explain to its part-time/fixed-term employees the contents and reasons for any differential treatment compared to its regular employees. An employer is further prohibited from any disadvantageous treatment of an employee who requests such an explanation.

With regards to dispatch employees, the dispatching company is obliged to ensure the equal or balanced treatment of dispatched workers, wherein the non-dispatched workers are treated equally or as a result of satisfying the requisite conditions, affording fair and equal treatment protections, in accordance with the provisions established under a labour-management agreement. The dispatching company is obliged to explain to the dispatch employees the contents of treatment and working conditions at the time of hiring and the commencement of the dispatch. Furthermore, the dispatching company is also required to explain to the dispatch employees the contents and reasons for differential treatment with the equivalent employees at the recipient company. The dispatching company is further prohibited from any disadvantageous treatment of an employee who requests such an explanation.

The guidelines corresponding to the amended Act, set out the basic criteria for salaries and benefits, education, training and welfare entitlements, together with concrete examples of reasonable and unreasonable treatment, differentiating between regular and non-regular employees.

Remedies

A non-regular employee may bring a claim against the employer by filing a civil lawsuit before the appropriate court, or through a petition for proceedings before the appropriate labour tribunal.

The amended Act developed administrative Alternative Dispute Resolution (administrative ADR) mechanisms to cover situations of equal treatment of non-regular employees (part-time/fixed-term employees and dispatch employees), in order to provide assistance to non-regular employees to settle disputes in a prompt and efficient manner, and without the involvement of court proceedings. Furthermore, the amended Act allows for the relevant administrative authorities to issue administrative advice, guidance and/or recommendations against the employer with regards to the treatment of the fixed-term employees, in addition to that of the part-time employees and the dispatch employees.

Non-compliance of administrative advice, guidance and/or recommendations may be subject to publication. An employer is further prohibited from any disadvantageous treatment of an employee who makes a request for such administrative ADR and/or administrative measures.

The amended Act does not impose statutory sanctions or penalties with regards to non-compliance of equal treatment of non-regular employees. The amended Act only provides for the administrative advice, guidance and/or recommendations.

Enforcement/Litigation

To date, we do not have any noteworthy enforcement pronouncements or ongoing litigation relating to the equal pay practices which came into force in April 2020, to report.

Other Requirements

Japanese law does not impose upon employers, any mandatory obligations to undertake positive actions with respect to pay discrimination, gender equality or equal pay.

 

 

 

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