JAPAN Trends and Developments Contributed by: Shiro Kato and Chihiro Shimaoka, Nagashima Ohno & Tsunematsu
an “employee” and the company must comply with those laws. Therefore, before entering into a contract with an athlete, a company must deter - mine whether the athlete is to be hired as an “employee” or under some other form of con -
• whether the person is required to comply with the company’s specific directions and super - vision in the performance of the work; • whether there is any obligation relating to the working hours and place of work; and • whether the person is allowed to have anoth - er person perform the work in substitution. In addition to these factors, who bears the cost of equipment used in the work, whether or not the person is restricted from working for other companies, and various other factors, such as withholding tax and social security coverage are also taken into account in determining whether a person is an “employee” . Impact of Athlete Being Classified as an “Employee” Regulations on dismissal When a company unilaterally terminates a con - tractual relationship with an athlete who is an “employee” , this constitutes a dismissal and various regulations on dismissals apply under labour laws. In particular, if a dismissal lacks objectively reasonable grounds and is not con - sidered appropriate in general societal terms, it is treated as an abuse of rights and is invalid under Article 16 of the Labour Contracts Act. In addition, an employer cannot dismiss an “employee” while the “employee” is absent from work for medical treatment due to an injury or ill - ness sustained in the course of employment, or within 30 days thereafter under Article 19 of the Labour Standards Act. An employer must pro - vide at least 30 days’ advance notice to dismiss an “employee” under Article 20 of the Labour Standards Act and, at the “employee’s” request, must deliver a certificate stating the period of employment, type of occupation, position in the business, wages, and the reasons for the dis -
tract based on, among other things: • the purpose of the engagement; • the role expected of the athlete; • the nature of the services; and • the sports activities to be performed.
It should be noted that, whether the athlete is an “employee” of the company does not depend on the name of the contract, but on its substance, based on specific facts regarding the relation - ship between the company and the athlete. So how do you generally determine whether a person is an “employee” ? Under Japanese labour laws, an “employee” is defined as a per - son who is employed by an employer to perform work and is paid a wage. Based on this definition, the important factors in determining whether a person is an “employee” are: • whether the person is employed by an employer, ie, whether they are working under the direction and supervision of the employer; and • whether the person is receiving remuneration in return for work. The first factor can be further subdivided into: • whether the person has the freedom to accept or refuse requests for work and instructions to perform the work;
174 CHAMBERS.COM
Powered by FlippingBook