Can a company dismiss or demote an employee who is pregnant or on maternity or childcare leave? Dismissal restrictions and the ban on adverse treatment in Japan, for employers and HR

Question

阿部国際法律事務所 · Accepted Answer

An employee generally cannot be dismissed during maternity leave and for 30 days after it (Labour Standards Act, Art. 19). Adverse treatment because of pregnancy, childbirth or childcare leave is prohibited, and a dismissal during pregnancy or within a year after birth is void unless the employer proves it was unrelated (EEO Act, Art. 9(4)).

During maternity leave and for 30 days after it ends, an employer generally may not dismiss the employee (Labour Standards Act, Article 19(1)). Dismissal, demotion, pay cuts and other adverse treatment because an employee became pregnant, gave birth, took maternity leave, or applied for or took childcare leave are also prohibited (Equal Employment Opportunity Act, Article 9(3); Childcare and Family Care Leave Act, Article 10). A dismissal during pregnancy or within one year after childbirth is void unless the employer proves that it was not based on pregnancy, childbirth or a related reason (Equal Employment Opportunity Act, Article 9(4)). Even where the stated reason is poor business results or poor performance, the timing and the reasons need to be handled with great care.

Typical situations

- An employee who has just announced a pregnancy has had poor performance for some time, and management is considering asking them to resign or dismissing them.
- The position of an employee returning from childcare leave has been filled, and the company wants them to come back in another department or at a lower grade.
- The company is downsizing a department, and one of the employees affected is on maternity leave.
- A manager said that a pregnant employee "can't handle responsible work any more", and the employee has complained to the internal help desk.

1. No dismissal during maternity leave and for 30 days afterwards

An employer must not dismiss a woman during the maternity leave she takes under Article 65 of the Labour Standards Act, or during the 30 days after it (Article 19(1)). This applies even if the reason has nothing to do with pregnancy or childbirth. The exceptions are narrow, such as where the business cannot continue because of a natural disaster or other unavoidable cause, and even then the reason must be certified by the competent administrative authority (Article 19(1) proviso and (2)).

A violation is punishable by imprisonment of up to six months or a fine of up to JPY 300,000 (Article 119(i)).

The length of maternity leave is fixed by law. If the employee requests it, she must be allowed to rest from six weeks before the expected date of birth (14 weeks for multiple births). She generally may not be put to work for eight weeks after childbirth (Article 65(1) and (2)). After six weeks, she may do work that a doctor has confirmed is safe, if she requests it (Article 65(2) proviso). A pregnant employee who asks to be moved to lighter work must be moved (Article 65(3)).

2. No adverse treatment because of pregnancy or childbirth

An employer must not dismiss or otherwise treat an employee adversely because she became pregnant, gave birth, requested or took maternity leave, or for other reasons related to pregnancy or childbirth specified by ministerial ordinance (Equal Employment Opportunity Act, Article 9(3)). Adverse treatment is generally understood to include not only dismissal but also demotion, pay cuts, refusal to renew a fixed-term contract and disadvantageous transfers.

In addition, a dismissal of an employee who is pregnant, or within one year after childbirth, is void (Article 9(4)). The only exception is where the employer proves that the dismissal was not based on pregnancy, childbirth or the other reasons in Article 9(3) (Article 9(4) proviso). In other words, the burden of proof is on the employer during this period. If the company relies on poor performance or misconduct, records of guidance and evaluations from before the pregnancy was announced become crucial.

3. No adverse treatment because of childcare leave

An employee may in principle take childcare leave until the child turns one (Childcare and Family Care Leave Act, Article 5(1)). In cases set out by ministerial ordinance, such as where the parent has applied for a nursery place but cannot get one, the leave can be extended to 18 months and then to two years (Article 5(3) and (4); Enforcement Regulations, Articles 6 and 6-2). There is also "postnatal paternity leave" of up to four weeks within eight weeks of the child's birth (Article 9-2).

An employer generally may not refuse an application for childcare leave (Article 6(1)). A labour-management agreement can only exclude certain employees, such as those employed for less than one year (Article 6(1) proviso). The employer must not dismiss or otherwise treat an employee adversely because they applied for or took childcare leave (Article 10).

4. Measures employers must take, and administrative action for violations

When an employee reports that they or their spouse is pregnant or has given birth, the employer must inform the employee individually about the childcare leave system and take measures such as an interview to confirm whether they intend to take leave (Childcare and Family Care Leave Act, Article 21(1)).

Employers must also take measures, such as setting up a system to handle consultations, to prevent the working environment from being harmed by comments or conduct in the workplace about pregnancy, childbirth or childcare leave (Equal Employment Opportunity Act, Article 15; Childcare and Family Care Leave Act, Article 25). This is commonly called "maternity harassment" or "paternity harassment" prevention. Adverse treatment because an employee sought advice is also prohibited.

If an employer violates these rules and does not follow a recommendation from the Minister of Health, Labour and Welfare, the company's name may be made public (Equal Employment Opportunity Act, Article 36; Childcare and Family Care Leave Act, Article 56-2).

5. Practical points

- If a dismissal is held void, the employer will usually be required to pay wages for the period since the dismissal. Both reinstatement and back pay become issues.
- Even where the employee "agreed" to a demotion or resignation, courts look closely at whether the agreement was given freely. How the change was explained, and whether the employee was given time to consider it, will be examined.
- If an employee on maternity leave is included in a downsizing, the selection criteria should be objective, and the company should be able to show that pregnancy and childbirth played no part.
- During childcare leave, employment insurance pays a childcare leave benefit. It is based on 67% of the daily wage at the start of leave for the first 180 days, and 50% after that (Employment Insurance Act, Article 61-7(6)). There is also a separate postnatal leave support benefit (Article 61-10).

What you can do now

- Check that your work rules and childcare leave rules on pregnancy, childbirth and childcare leave reflect the current law.
- Prepare a procedure and forms for informing employees individually and confirming their intentions when they report a pregnancy or birth.
- Before deciding on any demotion, pay cut, transfer or contract renewal for an employee who is pregnant or on maternity or childcare leave, have HR and legal review the reasons and the records.
- Keep records of guidance and evaluations on performance and conduct for all employees, whether or not they are pregnant.
- Train managers on what they must not say about pregnancy, childbirth and childcare leave, and on the internal help desk.

When to consult a lawyer

- You are considering dismissing, not renewing the contract of, or demoting an employee who is pregnant or on maternity or childcare leave.
- An employee returning from leave does not accept their new placement or terms and has objected in writing.
- The Prefectural Labour Bureau has contacted you about advice, guidance or a recommendation, or about dispute resolution assistance or conciliation.
- You have received a letter from the employee's lawyer or a union claiming confirmation of employment status or unpaid wages.

Frequently asked questions

Q. Can we include an employee on maternity leave in a redundancy dismissal because of poor business results?
During maternity leave and for 30 days afterwards, an employee generally cannot be dismissed, even for redundancy (Labour Standards Act, Article 19(1)). The exceptions are limited to cases such as where the business cannot continue, and certification by the competent administrative authority is required.

Q. Can we place an employee returning from childcare leave in a different department?
A transfer is not automatically unlawful. However, demotion or a disadvantageous transfer because of childcare leave is prohibited (Childcare and Family Care Leave Act, Article 10). Check whether the duties, pay or commute become worse, and whether you can explain the business need.

Q. Can we dismiss an employee for long-standing poor performance after they announce a pregnancy?
A dismissal during pregnancy or within one year after childbirth is void unless the employer proves it was not based on pregnancy, childbirth or a related reason (Equal Employment Opportunity Act, Article 9(4)). Without records of guidance and evaluations from before the announcement, that proof will be difficult.

Q. Can fixed-term employees take childcare leave?
Yes. They can apply unless it is clear that their contract will end before the child reaches 18 months (Childcare and Family Care Leave Act, Article 5(1) proviso). If a labour-management agreement excludes employees with less than one year of service, that agreement applies.

Q.Can a company dismiss or demote an employee who is pregnant or on maternity or childcare leave? Dismissal restrictions and the ban on adverse treatment in Japan, for employers and HR

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