JAPAN Law and Practice Contributed by: Hiroaki Matsui, Yukitsuna Takekoshi, Mari Ueki and Satoru Makino, AI-EI Law Firm
1. Opening an HR Internal Investigation 1.1 Circumstances In Japan, an employer typically initiates an HR internal investigation when it receives a whistle-blowing report or consultation from employees regarding an HR issue (eg, harassment). Investigations are also triggered when the regulatory authority starts an inspection or a third party brings a lawsuit against the employer. 1.2 Bases Usually, the employer carries out an HR internal inves - tigation based on the employment contract and the Work Rules, which require employees to comply with the employer’s instructions and orders. Furthermore, in its judgment of 13 December 1977 (Minshu Vol 31, No 7, p1037, Employee v Fuji Heavy Industries Ltd ), the Supreme Court ruled that an employer can carry out a fact-finding investigation in the event of a viola - tion of a company’s order – regardless of the exist - ence of the Work Rules’ description – so that it can clarify the content and nature of the violating conduct (as well as the rules it is in violation of) and issue the instructions required to restore the company’s order, or implement sanctions against the violator. In addi - tion, company directors owe a duty of care, which includes carrying out necessary fact-finding on impor - tant issues. 1.3 Communication Channels An employer with more than 300 employees is required to establish a whistle-blowing channel through which employees may report violations of laws and their concerns (Article 11, paragraph 1 of Act No 122 of 2004 – the “Whistle-Blower Protection Act”). A per - son monitoring such whistle-blowing channel should treat the report and its information anonymously if the whistle-blower’s report was submitted anonymously (Article 11, paragraph 2 of the Whistle-Blower Protec - tion Act and its guidelines). 1.4 Responsibility There are no specific rules in Japan regarding who is responsible for carrying out an HR internal investiga - tion. In the case of organisational misconduct or a huge violation, the board of directors usually appoints outside counsel or an outside investigation committee to carry out an objective investigation. Conversely, in
the case of a relatively small matter, the HR depart - ment or its counsel may carry out an HR internal investigation. If the investigation involves a legal or accounting mat - ter, a professional expert (eg, a licensed lawyer and/or accountant) may be involved at an early stage. If the investigation is triggered by a whistle-blower’s report, the investigator handling such information must be designated by the company based on the Whistle- Blower Protection Act, and they cannot share informa - tion about the whistle-blower outside the team. 1.5 Obligation to Carry Out an HR Internal Investigation According to the relevant Japanese laws, an employ - er is responsible for taking preventative measures against harassment, including sexual harassment, maternity harassment and power harassment; more - over, the employer should carry out an HR internal investigation if an act is perceived as harassment. In addition, if an employer perceives a risk of violation of the law, based on a whistle-blower’s report, the employer should carry out an HR internal investiga - tion and take corrective and preventative measures as well. If the employer does not carry out any investiga - tion and/or take any preventative measures, it will be in violation of its duty of care towards its employees under Article 5 of Act No 128 of 2007 (the “Labour Contracts Act”) and/or in violation of the related direc - tors’ duty of care. 1.6 Prohibition on Carrying Out an HR Internal Investigation There are situations in which an HR internal inves - tigation is not appropriate, and in such cases the employer may take alternative measures instead. By way of example, if an HR department is suspected of committing organisational misconduct or an HR employee/officer may have committed harassment internally, it would be more appropriate for the board of directors or an auditor to carry out an investigation instead of an HR internal investigation taking place. 1.7 Other Cases An employer has the discretion to decide whether and when to carry out an HR internal investigation, based on the content and severity of the risk it per -
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