Answer ... See question 4.5. Under Article 5 of the Employment Contract Law, with an equivalent provision in the Industrial Safety and Health Law, the employer has a duty to provide a safe and proper working environment to its employees and can be held liable for breach of that duty. Today, workplace bullying and ‘power harassment’ must be very carefully handled in Japan. Many employers have either turned a blind eye to such behaviour or found it difficult to distinguish between acts of power harassment and appropriate employer guidance in the course of the company’s business. The dividing line between bullying and a strong management style is sometimes blurred. A 2012 Ministry of Health, Labour and Welfare (MHLW) report entitled “Report by the Working Group Roundtable regarding Workplace Bullying and Harassment” defines ‘power harassment’ as “an act by an employee using his position of seniority or relationship with a co-worker which causes such co-worker mental or physical stress or a degradation of the working environment beyond the appropriate scope of the company’s business”. The MHLW report categorises power harassment in six categories, from assault and battery to intimidation, defamation, insults, ostracism, ordering an employee to perform menial tasks far below the employee’s ability, invasion of privacy and so on. The Law on the Comprehensive Promotion of Labour Measures and the Stabilisation of the Employment of Employees and the Enrichment of Their Working Lives, Etc, revised in 2019, seeks to tackle workplace harassment and prevent bullying/power harassment in particular. The amendments came into force in June 2020, but the obligation to take measures to prevent power harassment described below will only be a best efforts obligation until April 2022 for small and medium-sized enterprises. The law defines ‘power harassment’ as “remarks or behaviour by people taking advantage of their superior position that go beyond business necessity, thereby harming the workplace environment”. Employers are obliged to take HR management action and preventive measures to combat power harassment, including setting up structures necessary to offer internal consultation services and respond to claims. Employers must provide training to develop their employees’ awareness and understanding, and ensure that the relevant employees pay attention to their verbal and physical behaviour. Employers are prohibited from dismissing employees reporting harassment cases (or cooperating in an investigation or consultation process) or from treating them unfavourably. The director-general of a Prefectural Labour Bureau can give advice, instructions or recommendations to assist with the dispute resolution; and employers that fail to comply with a recommendation and a related administrative notice can be publicly named and shamed. Guidelines issued by the MHLW elaborate on the measures to be taken.
The representative director is theoretically in charge of eliminating any form of harassment and securing a proper environment. In this context, the risk and liability is not only for the representative director (or individual perpetrators); from a legal perspective, in addition to being liable for any systemic power harassment, the company may be held liable for any specific actions which constitute power harassment by a manager over a subordinate, because the company will be considered to have failed in its duties to supervise and create a safe environment for the employees. Claims can be based on tort, breach of employment contract and so on, and lead to criminal penalties or claims under the Workmen’s Accident Compensation Law. That said, most cases are dealt with internally without legal action in Japan (although settlements can be costly). Similar rules apply to sexual harassment. Detailed internal rules and grievance procedures can be established to deal with these situations.
The Whistleblower Protection Act (WPA) protects those who expose corporate or government misconduct from unfair treatment and retribution (eg, dismissal, demotions or salary cuts). Under the act, a ‘public interest disclosure’ involves the disclosure of relevant disclosure information by a worker to his or her employer, a government agency or official with relevant jurisdiction or any other person, to prevent a matter from occurring or worsening. Disclosures cannot be made for illegitimate purposes. ‘Relevant disclosure information’ means information regarding criminal conduct or statutory violations relating to the protection of consumer interests, the environment, fair competition and generally the life, body and property of the general public, and workplace health and safety. However, further to June 2020 amendments to the WPA, due to become effective by June 2022 at the latest, companies that employ more than 300 employees in Japan will have to establish a whistleblowing system and designate a person responsible for whistleblowing-related matters. The detail of the system and requirements will be announced through explanatory guidelines to be issued in 2021 by the MHLW. The requirements will likely include:
- a proper policy;
- a helpline;
- disciplinary sanctions in case of breach of the internal whistleblowing rules;
- rules prohibiting retaliation and the inappropriate treatment of whistleblowers; and
- rules dealing with confidentiality and information leakage.
A person in charge of whistleblowing matters must be appointed under the amended WPA.
