Extract

With a focus on instances of judicially created norms, this chapter will analyze the limitations on an employer’s right to refuse the renewal of fixed-term employment contracts under Japanese labor law. Part II will provide an overview of the legal status of fixed-term employment contracts and will identify problems with statutory law before the amendments to the Labor Contract Act in 2012. Additionally, Part II will provide a comparative analysis of Japanese law with regards to fixed-term employment contracts. Part III of this chapter will describe case law that effectively restricted an employer’s right to refuse the renewal of employment contracts under certain circumstances. Part IV will then examine new provisions of the Labor Contract Act, which codifies existing case law, point out its significance and examine remaining issues with respect to changes in Japan’s labor market that influenced the amendment. To conclude, Part V will highlight the significance of judicially created legal norms regarding the limitations on an employer’s right to refuse the renewal of fixed-term employment contracts. According to a basic principle of contract law, pacta sunt servanda, the parties to a fixed-term employment contract must maintain contractual relationships until the expiration of the contract. Therefore, unless there is a compelling reason for an exception, neither party may terminate the contract before the end of the contract period.