Reader DD writes: “I am currently unemployed. My last day as an employee of my previous company (Company A) was July 31. My reason for leaving was 1) management had decided to shut down the Tokyo team, and 2) I was going to join a competitor (Company B).
“My first meeting with Company B was at the end of June, and they gave me a verbal agreement along with a rough draft of the employment contract to view in early July, which I perused through and found agreeable. I returned the contract to Company B promptly upon their request and was instructed to wait for a final draft to be delivered from the States. I am still waiting.
“My question is, what rights do I have in this situation? Am I entitled to the lost wages from Aug. 1, housing reimbursements and visa renewal as promised by Company B?”
As with any legal agreement, an employment contract is generally not complete until the final deal is reached between the employer and employee. Such an agreement usually takes the form of a written contract signed by both parties, and either party can break off and walk away from negotiations at any point before the deal is inked.
In reality, however, job offers are made in advance of starting work, and there may be an extended period of time between when the job was offered and the moment the contract is actually signed. This interval can be substantial, as is typically the case with the recruitment of new graduates in Japan, whether from high schools or universities. Here, students are expected to go job-hunting at least a year before graduating, in the hope of being handed an informal job offer (naitei) that is supposed to turn into an employment contract upon successfully finishing school or college. In some cases job offers are made more than one year before graduation.
During this “gap” period, various things could occur that affect this employment. The employer’s business may face a downturn, due to internal or external factors, such as a financial crisis. Or there may be a big shift in its corporate strategy, changing the attributes of the human resources they require. In other words, there are various reasons for an employer to change its mind between a job offer and the starting date of the employment. If this leads to cancellation of the job offer, it will result in loss of income for an extended period of time for those in between jobs and a huge loss of opportunity in terms of job-hunting for new graduates. The question is: Can employers take back job offers?
Regarding the legal nature of a job offer, Supreme Court precedents have confirmed that a job offer is indeed an employment contract, sealed with the initial application of the potential employee and the consequent job offer by the employer. This means that canceling a job offer is legally equivalent to terminating an existing employee, requiring “rational and socially acceptable grounds.”
Employers often list conditions for possible cancellation in the job offer in writing, but existence of such a list does not give employers carte blanche to cancel the contract unilaterally without reasonable grounds. For example, a downturn in business is not an acceptable reason in most cases, as the employer is responsible for foreseeing its performance prior to offering the job. The applicant’s failure to graduate by an agreed time, on the other hand, is considered an acceptable ground for cancellation of the offer.
Regarding the delay in the start of work, employers are also bound by the date stated in the job offer. If the starting date is clearly defined in the job offer, employees are legally entitled to receive a salary from that date, even if the actual date that work starts is postponed due to circumstances on the employer’s side.
In summary, a job offer is in principle legally binding, and the employees are protected from unreasonable cancellation or delay of the employment.
DD’s case is a bit more complicated. According to his explanation, Company B only presented a draft contract, with the caveat that they would need to get approval from their headquarters. Legally it would be difficult to say that there was a job offer equivalent to a concluded employment contract in this case.
If the communications between DD and Company B objectively show that there was 1) a concrete and definite agreement on the employment and its conditions, 2) the approval by the headquarters was only a technicality and 3) that the local subsidiary who produced the contract had its own decision-making authority over its employment, there may be a chance that DD could claim there was an employment agreement made between them.
Lastly, Company B may legally be responsible for cooperating in the renewal of your visa (or residential status, more exactly) if DD can prove the existence of a solid job offer (via the three points above), but strictly speaking it would be a false application on the company’s part if it stated to Immigration that DD was their employee, while in reality the company was denying it. In conclusion, it would be impossible to renew the visa without a contract to show to Immigration as proof of employment.
Yuichi Kawamoto is an attorney with the Section of Legal Assistance for Foreigners at Tokyo Public Law Office, which handles a wide range of cases involving foreigners in the Tokyo area. TPLO lawyers address readers’ legal concerns on the second Tuesday of the month. Website: www.t-pblo.jp/slaf. Phone: (03) 5979-2880. Send questions to email@example.com