Why Should the Monetary Compensation System Be Introduced in Japanese Dismissal Regulation?

Shinya Ouchi ()
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Shinya Ouchi: Kobe University

Chapter Chapter 1 in Severance Payment and Labor Mobility, 2018, pp 3-15 from Springer

Abstract: Abstract The Labor Contract Act limits the employer’s right of dismissal, but this rule has been criticized in some regards. First, the terms used in the Act are so ambiguous that such circumstances have deprived both parties of predictability. Second, the Act provides that a dismissal should be invalid if it is abusive. In this case, the employer has no option to terminate an employment relationship by payment of monetary compensation. It is said that this is one of the main sources of the Japanese labor market rigidity. In order to mitigate this situation, a monetary compensation system should be introduced in the Japanese rules of dismissal.

Keywords: Dismissal regulations; Article 16 of the labor contract act; Reinstatement; Monetary compensation; Abusive doctrine; Labor market (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:eclchp:978-981-13-2149-8_1

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DOI: 10.1007/978-981-13-2149-8_1

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