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

In: Severance Payment and Labor Mobility

Author

Listed:
  • Shinya Ouchi

    (Kobe University)

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.

Suggested Citation

  • Shinya Ouchi, 2018. "Why Should the Monetary Compensation System Be Introduced in Japanese Dismissal Regulation?," Economics, Law, and Institutions in Asia Pacific, in: Tatsuo Hatta & Shinya Ouchi (ed.), Severance Payment and Labor Mobility, chapter 0, pages 3-15, Springer.
    • Handle: RePEc:spr:eclchp:978-981-13-2149-8_1
    DOI: 10.1007/978-981-13-2149-8_1
    as

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