Article 65, paragraph 3 of the Labor Standards Act of Japan allows pregnant employees to request a transfer to lighter activities. In addition, Article 9, paragraph 3 of the Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment ("Equal Opportunity Act") forbids employers from treating female employees disadvantageously as a result of them making a request to transfer to other light activities. 

In the Hiroshima Chuo Hoken Coop - C Coop Hospital case, the appellant asserted that she was unlawfully demoted as a consequence of her request to transfer to other light activities when she was pregnant, in violation of Article 9, paragraph 3 of the Equal Opportunity Act. The appellant also asserted that it was unlawful for her employer to prevent her from returning to her former position once she returned from child care leave. 

The Supreme Court found that Article 9, paragraph 3 of the Equal Opportunity Act is a mandatory statute and that a demotion arising out of a pregnant employee's request to transfer to light activities is in violation of the Act, unless either:

  • there are objectively rational reasons that make it possible to recognize that the pregnant employee voluntarily agreed to the demotion, or
  • it is difficult for the employer to transfer the employee to light activities without demotion because of the necessity of a smoothly functioning business or an appropriate allocation of human resources,

in which case the Court may find in favor of the employer where the demotion does not substantially violate Article 9, paragraph 3 of the Equal Opportunity Act. 

In this case, the Supreme Court found that there were no objectively rational reasons that would explain why the appellant would voluntarily agree to the demotion, and thus the first criterion was not satisfied, but it was not clear from the record whether there are any facts that would satisfy the second criterion. Accordingly, the Court remanded the case to the original court for adjudication

The Supreme Court's decision in Hiroshima is noteworthy because this is the first case in which the Supreme Court sets out the criteria used to determine whether a demotion in connection with a pregnant employee's transfer request may violate Article 9, paragraph 3 of the Equal Opportunity Act.