Increasing Litigation Relating To Article 20 Of The Labor Contract Act

Article 20 of the Japanese Labor Contract Act ("Article 20"), which was enacted in April 2013, prohibits employers from establishing unreasonable differences between the working conditions of fixed-term employees and indefinite-term (namely, permanent) employees, taking into account the following circumstances: the content of the employees' duties and the responsibility that accompanies those duties ("content of duties, etc."); the extent of changes in the content of duties, etc.; the location of work; and any other relevant circumstances. Recently, there has been an increasing number of cases brought by employees against employers invoking Article 20.

In the recent Nagasawa-Unyu decision, a regular employee was rehired as a fixed-term employee upon reaching the age of retirement. The Tokyo District Court held that there was an unreasonable difference in the amount of wages paid to fixed-term employees and indefinite-term employees because the content of duties,