This summary of age discrimination law in Japan has been prepared by Anderson Mori & Tomotsune

Overview

There are no laws which specifically address age discrimination.  While the Labour Standards Act (the "LSA") includes a provision which states that "[e]mployers shall not engage in discriminatory treatment with respect to wages, working hours or other working conditions by reason of the nationality, creed or social status of any employee" (Article 3 of the LSA), it is silent on including "age" as a ground for discrimination.  Nevertheless, discriminatory treatment based on the age of an employee can be null and void because it is antagonistic to public order and morals (Article 90 of the Civil Law), and it can be the basis of a tort action (Article 709 of the Civil Law).

Furthermore, Article 10 of the Employment Measured Act (the "EMA") specifically addresses the issue of age for the purpose of promoting employment for people of all age groups.  Among other things, Article 10 prohibits age-based restrictions when recruiting and hiring.  It also requires employers to provide employees with equal recruitment and hiring opportunities regardless of their age pursuant to the provisions of the Ordinance of the Ministry of Health, Labour and Welfare.  However, there are certain exceptions to that requirement which may apply.

Who’s covered?

Article 10 of the EMA applies to people of all age groups.

What enforcement/remedies exist?

Japanese law does not regulate age discrimination.  If an employer does not comply with Article 10 of the EMA and implements age restrictions with respect to its recruiting and hiring practices, such an employer cannot be punished, because criminal or civil enforcement is beyond the scope of the EMA   However, the Minister of Health, Labour and Welfare can impose certain measures on an employer such as issuing administrative guidance and advice or a recommendation (Article 33 of the EMA).  Moreover, based on Article 5-5 of the Employment Security Act, the Public Employment Security Office (or a fee-charging employment placement business provider (Yuryo-shokugyo-shokai-jigyosha)) can restrict the employer from publishing its job openings. Employees have no remedy for violations of Article 10 of the EMA.

How common are claims?

Age discrimination claims are rarely filed.

What claims are most common?

As above.

What are the trickiest issues for employers?

It seems that any age discrimination case on the basis of Articles 90 or 709 of the Civil Law have been allowed, thereby finding that certain acts taken by the employer are null and void.

Are there any specific exceptions in your laws?

The exceptions to the application of Article 10 of the EMA are as follows (Article 1-3 of the Ordinance for Enforcement of the EMA):

  • When recruiting and hiring applicants for non-fixed term employment contracts, the employer can stipulate that the applicant should be within the retirement age limit of 60 or above, depending on the retirement age adopted by the employer, in order to be eligible for the role;

  • In cases where age restrictions are established under the provisions of the LSA and other applicable laws and regulations, the employer can recruit from a certain age group in accordance with the applicable laws;

  • When recruiting and hiring people without job experience (i.e., graduates, etc.), for non-fixed term employment contracts, the employer can restrict the age limit and employ only young individuals thereby providing them with training, and establish their careers on a long term basis;

  • In the case where employers have very few people in a certain age group and in a specialised occupation when compared with employees from other age groups in the same specialised occupation, the employer can recruit and hire employees from a certain age group on a non-fixed term employment basis in order for the employer to function in a smooth manner and carry forward the acquired skills and knowhow to the next generation of employees and in order to bridge the gap;

  • In cases where there are specific needs in the field of arts and entertainment, the employer can recruit an individual who fits the role; and

  • In cases where an employer recruits and hires only those individuals who are 60 years or older or those who are subject to measures to promote employment of a certain age group (limited to cases where the government policies are utilised).

Retirement ages

Article 8 of the Act on Stabilisation of the Employment of Elderly Persons (the "Act") prohibits the stipulation of a retirement age which is below 60.  According to the Working Conditions Comprehensive Survey, which was conducted in 2017 by the Ministry of Health, Labour and Welfare (the "MHLW"), approximately 77% of companies have established 60 as their retirement age.

However, to ensure stable employment until the age of 65, Article 9, Paragraph 1 of the Act requires employers who stipulate a retirement age to: (i) increase their established retirement age up to 65; (ii) establish a continuous employment system up to the age of 65 (this continuous employment system pursuant to which the employer continues to employ a current employee after he/she reaches retirement age if that employee wishes to continue being employed.)[1]; or (iii) abolish their established retirement age.  According to the MHLW, as of 2017, approximately 80% of employers that had stipulated a retirement age of 60 have now extended it to have a continuous employment system as mentioned in item (ii) above.  Many such employers have implemented a system to conclude a one-year-term employment contract after the employee reaches the retirement age of 60.

Employers are not prohibited from changing an employee's working conditions (e.g., working days, wages, etc.) after he/she reaches retirement age.  However, Japanese law prohibits different working conditions between indefinite-term employees and definite term employees or part-time employees which result in unreasonable treatment towards the definite term employees (Article 20 of the Labour Contract Act (the "LCA"), and Article 8 of the Act on Improvement, etc. of the Employment Management for Part-Time Workers (the "Part-Time Workers Act").  Employees may seek remedies under the law for violations.  If an employee's working conditions are changed to the disadvantage of such a worker and antagonistic to Article 20 of the LCA or Article 8 of the Part-Time Workers Act after he/she reaches retirement age, such changes will be deemed to be null and void by Japanese courts, and such employee shall be awarded compensation for the damages suffered (Nagasawa Transport Case - Judgement of the Supreme Court June 1, 2018, in this case, the plaintiffs claim against its employer is based on Article 20 of the LCA).

Interesting cases

In one case, a company set lower wages for an employee who was more than 60 years old, but the wage difference was not the basis for the claim in tort (Judgment of the Tokyo District Court on August 25, 2016). 

The defendant company in this case operated a business that managed cars which were owned by customer companies and used by their directors and officers.  The plaintiff was hired to work as a vehicle administrator in the defendant company after he had retired from another company.  When the plaintiff was hired, the defendant company had the following two categories for vehicle administrators: (i) indefinite-term employee, but with an established retirement age of 60 (hereafter "Type A"), and (ii) definite-term employee with the last contract term ending on the employee's 65th birthday (hereafter "Type B").  At the defendant company, there were 557 Type A employees, who were all below the age of 60, and 56 Type B employees, who were all above the age of 60.  The annual wages of Type B employees were approximately 74-81% of the wages of Type A employees.  The plaintiff was a Type B employee.

Based on the wage differences, the plaintiff instituted a lawsuit against the defendant company on the premise that the difference in wages of Type A and Type B employees had no reasonable basis and claimed that he suffered damages as a result of receiving wages which were lower than those received by Type A employees.  As a remedy, the plaintiff sought the payment of difference in amount of wages between Type A and Type B employees.  The court, however, denied the plaintiff's damages claim for the following reasons:

  • If the court found that the wage difference constituted discrimination because it was unreasonable in light of social norms, then it would be the basis for a claim in tort against the defendant company.

  • Generally speaking, the employer determines the working conditions of its employees, and employers are accorded substantial discretion in making such decisions.

  • From the perspective of effective and efficient business management, the defendant company needed its vehicle administrators to be young or middle-aged people. The defendant company, thus, adopted a lifetime employment system to encourage long-term employment.  In consideration of those facts, the court decided that it was reasonable for the company to treat its young and middle-aged employees more advantageously.

  • In Japan, the wage levels of individuals who have reached retirement age are generally set considerably lower than the wage levels for individuals who have not reached retirement age.

  • When the Plaintiff joined the defendant company, he was aware that he was hired under the working conditions of a Type B employee.

  • It was difficult to find the wage difference between Type A and Type B employees to be unreasonable in light of the social norms prevalent in the country.


[1] If, before April 1, 2013, an employer set certain eligibility requirements for participation in the continuous employment system under a labour-management agreement and introduced its own system based on such requirements, the employer can, until March 31, 2025, continue to apply such requirements only to those employees who have reached a certain age (Such age shall be set at 61 from April 1, 2013, to March 31, 2016, at 62 from April 1, 2016, to March 31, 2019, at 63 from April 1, 2019, to March 31, 2022, and at 64 from April 1, 2022, to March 31, 2025.).  This is an interim measure taken for the purpose of avoiding the occurrence of a period during which the employment of certain employees may discontinue and no pension will be paid to such employees as a result of increasing the age at which employees can start to receive old-age employees' pensions.