13 April, 2018
Amendments to the Labour Contract Act (roudou keiyaku hou) came into force on 1 April 2013. Among other things, the amendments have introduced a provision allowing an employee who has been continuously employed on a fixed-term employment contract by the same employer for a total of more than five years to apply to convert his/her fixed-term employment contract into an indefinite-term employment contract.
The calculation of such period includes any fixed-term employment contract period (including any extension periods) where the fixed term contract (or extension period) has commenced on or after 1 April 2013. Any period of employment under a fixed-term employment that commenced before such date is excluded.
For example, if an employer hired a one year fixed-term employee on 1 April 2013 and extended the employment period each year over the subsequent four years, such fixed-term employee will have the right from 1 April 2018 to convert his/her fixed-term employment contract into an indefinite-term employment contract if the employer extends the fixed-term contract again on 1 April 2018.
Employers of fixed-term employees therefore need to be aware of the risks involved in the case of extending employment terms for more than five years.
For further information, please contact:
John Maxwell, Partner, Linklaters
john.maxwell@linklaters.com
