On April 1, 2015, the Act on Special Measures concerning
Fixed-Term Employees with Expert Knowledge, etc. (the
"Act") came into force. The Act provides for certain
exceptions to the "rule of conversion into indefinite-term
contracts." This rule, contained in the Labor Contract Act,
provides that an employee may convert a fixed-term contract into an
indefinite-term contract if the fixed-term contract has been
renewed for five years or more in the aggregate. Specifically, the
Act exempts from this rule (i) certain employees with a high level
of expert knowledge, skill, or experience ("High-Level
Experts"), and (ii) employees who are continuously employed
after they have reached retirement age ("Continuously Employed
Elderly Employees"). Those exemptions apply only if the
employer obtains approval of the employer's plan concerning
employment management measures that enable employees to fulfill
their potential effectively from the Minister of Health, Welfare
and Labor.
To be considered as a High-Level Expert, an employee must engage
in projects with a fixed term of more than five years and have both
an annual income of at least 10.75 million yen and a high level of
expert knowledge, skill, or experience. Employees with a "high
level of expert knowledge, skill, or experience" include (i)
employees with a Ph.D., (ii) certified public accountants, (iii)
medical practitioners, (iv) attorneys, (v) qualified IT
strategists, actuaries, or systems analysts, and (vi) employees who
are experienced systems engineers, etc.
Under the Act, the right to convert a fixed-term contract into an
indefinite-term contract is not available to employees except
during the following time periods: in the case of High-Level
Experts, a period of up to 10 years during which the employee
engages in the project, and, in the case of Continuously Employed
Elderly Employees, the period during which an employee is
continuously employed after he or she has reached retirement
age.
Employers that employ any employees to which this exemption
applies are advised to consider utilizing the system under the
Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
