1.1. Termination (Employer-Initiated)

In Japan, labor laws heavily favor employee protection, making it difficult for employers to terminate employees without just cause. The key legal framework includes:

• Labor Standards Act (LSA): This is the primary law governing employment in Japan. It outlines the rights of employees and the obligations of employers.
• Employment Contracts: Termination must comply with the terms outlined in the employment contract.
• Unfair Dismissal Protections: Employers cannot terminate employees without a valid reason. Examples of valid reasons include:
  • Serious misconduct (e.g., theft, violence).
  • Poor performance (though this is difficult to prove in practice).
  • Economic necessity (e.g., company restructuring or bankruptcy).

Notice Period for Termination

• Employers must provide at least 30 days' notice before terminating an employee. If they fail to do so, they must pay the employee 30 days' worth of salary as a substitute for notice (known as "notice pay").
• Exceptions: Immediate termination is allowed in cases of gross misconduct, but this is rare and must be justified.

Prohibited Terminations

• Employers cannot terminate employees under the following circumstances:
  • During maternity leave or within 30 days after its conclusion.
  • For discriminatory reasons (e.g., gender, nationality, union membership).
  • Retaliation for whistleblowing or filing a complaint.

---

1.2. Resignation (Employee-Initiated)

Employees in Japan have the right to resign at any time, but they must follow proper procedures to avoid legal or financial complications.

Notice Period for Resignation

• Under the Civil Code of Japan, employees are required to give at least 14 days' notice before resigning.
• However, many companies request a 30-day notice period in their employment contracts or internal rules. While this is not legally binding, it is considered a professional courtesy to comply with company policies.

Immediate Resignation

• Employees can resign immediately if the employer agrees or if there are extenuating circumstances (e.g., harassment, unsafe working conditions).

---

2. Financial Implications

2.1. Severance Pay

• Not mandatory: Japanese labor law does not require employers to provide severance pay unless it is stipulated in the employment contract or company policies.
• Voluntary severance packages: In cases of voluntary resignation or company restructuring, employers may offer severance packages as a goodwill gesture.

2.2. Unemployment Insurance (Koyo Hoken)

• If you lose your job (whether through termination or resignation), you may be eligible for unemployment benefits under the Hello Work system (Japan's public employment service).
• Eligibility:
  • You must have been enrolled in unemployment insurance for at least 6 months in the past year.
  • For voluntary resignation, there is a 3-month waiting period before benefits begin.
  • For involuntary termination, benefits start immediately after processing.
• Benefit amount: Typically 50-80% of your average daily wage, depending on your age and income.

2.3. Final Paycheck

• Employers are required to pay all outstanding wages, including unused paid leave, within 7 days of the resignation or termination date, unless otherwise agreed.

---

3. Standard Procedures

3.1. For Termination (Employer-Initiated)

1. Notice of Termination:
   • Employers must provide written notice at least 30 days in advance or pay notice compensation.
2. Consultation and Documentation:
   • Employers often consult with labor unions or legal advisors to ensure compliance.
   • A termination letter or separation agreement is typically issued.
3. Final Pay and Benefits:
   • Employers must settle all outstanding wages, unused paid leave, and any severance pay (if applicable).
4. Unemployment Insurance:
   • Employers must provide a certificate of separation (離職票, "Rishokuhyo") for the employee to claim unemployment benefits.

3.2. For Resignation (Employee-Initiated)

1. Notice of Resignation:
   • Submit a resignation letter (退職願, "Taishoku Negai") to your supervisor or HR department. This can be done verbally, but written notice is preferred for record-keeping.
2. Handover of Duties:
   • Employees are expected to complete a smooth handover of their responsibilities, including training replacements or documenting ongoing projects.
3. Exit Interview:
   • Some companies may conduct an exit interview to gather feedback.
4. Return of Company Property:
   • Employees must return any company property (e.g., ID cards, laptops) before their last working day.
5. Final Pay and Benefits:
   • Ensure you receive your final paycheck, including unused paid leave.

---

4. Cultural Considerations

4.1. Resignation Etiquette

• Face-to-Face Communication: In Japan, it is customary to inform your direct supervisor of your intention to resign in person before submitting a formal resignation letter.
• Timing: Avoid resigning during busy periods (e.g., fiscal year-end in March) as it may inconvenience your team.
• Professionalism: Maintain a polite and respectful tone throughout the resignation process. Burning bridges is highly discouraged in Japan's interconnected professional networks.

4.2. Termination Sensitivity

• Termination is culturally sensitive in Japan, as losing a job can carry a social stigma. Employers often try to avoid outright dismissal by encouraging employees to resign voluntarily (e.g., through "early retirement" offers).

4.3. Lifetime Employment Culture

• While lifetime employment is no longer as common as it once was, many Japanese companies still value long-term loyalty. Resigning too soon after joining a company may be viewed negatively.

---

5. Practical Tips

1. Understand Your Contract:
   • Review your employment contract and company policies to understand your rights and obligations regarding termination or resignation.
2. Seek Legal Advice:
   • If you believe you are being unfairly dismissed, consult a labor lawyer or contact your local Labor Standards Inspection Office (労働基準監督署, "Rodo Kijun Kantokusho").
3. Prepare Financially:
   • If resigning voluntarily, ensure you have sufficient savings to cover the 3-month waiting period for unemployment benefits.
4. Use Hello Work:
   • Register with Hello Work for job placement assistance and unemployment benefits.
5. Maintain Professional Relationships:
   • Even after leaving, maintaining good relationships with former colleagues and supervisors can be beneficial for future career opportunities.

---

6. Key Takeaways

• Termination: Employers must provide just cause, 30 days' notice, or notice pay. Unfair dismissal is prohibited.
• Resignation: Employees must give at least 14 days' notice but should aim for 30 days as a courtesy.
• Financial Implications: Understand your eligibility for unemployment benefits and ensure you receive your final paycheck.
• Cultural Norms: Respect Japanese workplace etiquette by resigning professionally and maintaining good relationships.

By following these guidelines, you can navigate the process of termination or resignation in Japan smoothly and in compliance with both legal and cultural expectations.