On September 8, 2017, Japan's Labour Policy Council announced its opinion that the "Outline of Legislation for the Promotion of Work Style Reform" ("Outline") is reasonable, in response to the Ministry of Health, Labour and Welfare's ("MHLW") request for review. Going forward, the MHLW will prepare draft legislation based on the Outline and will begin preparations for submitting the legislation at the next session of the Diet. The Outline is based on the "Action Plan for the Realization of Work Style Reform" (discussed in the April 2017 issue of this newsletter) but is more detailed than the action plan. Below are the Outline's key provisions.

  1. Limits on Overtime: The Outline, as a general rule, limits overtime to 45 hours per month and 360 hours per year. Even in the case of special, temporary circumstances, overtime for any individual month must be less than 100 hours, the monthly overtime average over multiple months may not exceed 80 hours, and annual overtime may not exceed 720 hours.
  2. Expanding the Scope of the Discretionary Working System for Management-Related Work: The Outline expands the scope of the Discretionary Working System for Management-Related Work, which is one of the systems under which employees are deemed to have worked the number of hours prescribed by the labor–management agreement regardless of the actual number of hours worked. The discretionary working system now applies to making development proposals that involve problem-solving and discretionary implementation of PDCA (plan-do-check-act) cycles.
  3. Establishing a Sophisticated Professional System: The Outline includes a plan to establish a "Sophisticated Professional System," which would exempt employees engaged in certain specialized work from regulations on working hours while strengthening measures for the protection of employee health, such as obligating employers to provide such employees with at least 104 days of annual leave. For more details regarding the proposed system, please see the March 2015, May 2015, and August 2015 issues of this newsletter.
  4. Securing Fair Working Conditions Regardless of Employment Type: The Outline sets out rules intended to eliminate unreasonable differences between the working conditions of regular employees and those of part-time employees, fixed-term employees, and dispatched employees. The Outline also imposes a heavier burden on employers to explain working conditions to employees.

Although the Outline will not be submitted to the Diet as a bill and enacted until next year at the earliest, most of the Outline has been scheduled to come into force on April 1, 2019, which gives an indication of the timing of future legislation. Companies should pay close attention to the Outline, as it will have significant implications for labor management and will reveal future legislative trends.