On January 22, 2016, the Ministry of Employment and Labor published two sets of guidelines called "Guidelines on Rules of Employment," and "Guidelines on Fair Personnel Management," respectively.
The Guidelines on Fair Personnel Management are aimed primarily at performance management, and in particular the proper standards and process for performance-based dismissals. They offer principles and practices to apply to basic personnel-management subjects such as compensation, promotions and raises based on fair evaluations, improvement of workers' competence, and providing outplacement support for employees who voluntarily resign when requested to do so.
In addition, the guidelines recommend taking various measures to avoid performance-based dismissals—such as a reshuffling personnel and providing job training—and using fair and objective performance evaluations to justify dismissing employees for poor performance or lack of ability to perform the job.
The Guidelines on Rules of Employment are intended to clarify when an amendment to a company's Rules of Employment that is adverse to the employees can nonetheless become effective even without the normally required collective workforce consent, under a judicially crafted exception for changes that are "reasonable in light of socially accepted norms." This is an important issue because many businesses are eager to (i) change their compensation systems from purely seniority-based to performance-based; and (ii) adopt a "salary peak" to reduce the burden of retaining older employees, which they are required to do under a recent amendment to the law that requires companies to raise their internal mandatory retirement ages to 60. Entities in the public sector are already litigating these issues (see below).
Labor organizations have expressed strong opposition to both sets of guidelines, accusing the government of simply trying to make it easier and more convenient to dismiss employees. Whereas the business community has welcomed the effort at reform, characterizing the guidelines as necessary given current economic conditions and declining employment.
However, these guidelines are simply an expression of the official views of the administration. They do not change the law and are not legally binding on the courts, which hold the ultimate authority to decide disputes over the law in these areas. And the guidelines do not add much to the existing principles governing these areas; they primarily attempt merely to clarify existing laws and precedents.
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