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In Japan’s courts, even verbal job offers count

by Hiroshi Miyauchi

Reader B writes: “A while ago I applied to a large international bank via a recruiting agency, and after a successful interview, I was offered a job. I accepted the position, sent in my references and was told to wait.

“Three weeks later, I received an email from the recruiter that said the recruiter had found a candidate with more experience and better language ability, and had decided to employ this person instead. They made a point of mentioning that this was unusual, apologized and promised to let me know about any further positions that come up.

“The offer I received was verbal, but I have evidence through email that it did occur. Due to the offer, I ended up not renewing my current job contract and am currently out of work. What are my options? Is this legal?”

The first question to address is whether a labor contract was concluded by the act of making the nonwritten job offer (saiyō naitei)?

Since there are a number of situations in which job offers are made, it is difficult to give a conclusive answer. However, a 1979 precedent from the Supreme Court says, “Taking into consideration that there was no other declaration of intent planned other than the job-offer notice, a labor contract with the projected hire date being the date of the start of labor and with the right of termination reserved by the employer has been established by the notice.”

This means that even with a job offer prior to a paper contract, a labor contract may be effectively concluded nonetheless, with the caveat that if a situation emerges before the projected hire date where there are reasons to withdraw the offer, the employer can do so.

True, job offers are usually made in writing, but verbal ones are equally as binding (though proving that a verbal offer was made and the content of the offer could be problematic in some cases). In B’s case, if no further steps to formalize the deal were expected to be taken after he accepted that offer, a court may decide that the labor contract was legitimately concluded at the time B agreed to the proposal.

So, if a labor contract was effectively concluded by the job offer, in what circumstances would the employer be able to break that contract?

The employer would need to have a very good reason. The Supreme Court has said that a withdrawal can be considered legal if “conditions that were not known and that could not have been expected to be known” come to light after the offer was made, and where it can be recognized that the withdrawal is “objectively reasonable and just, according to general social norms.”

Examples of such a situation include cases where the would-be employee failed to graduate from school or where the company discovered that the applicant had falsified important information in the papers he submitted. Even if an employer was to suddenly find themselves in dire financial straits, that itself would be insufficient to satisfy the aforementioned criteria.

In B’s case, the offer appears to have been withdrawn simply because the employer found a more suitable candidate. However, such a withdrawal, apparently made at the employer’s convenience and with scant regard for the hopeful candidate, is unlikely to be considered reasonable and just.

So, lastly, what kind of measures can be taken by victims of illegal withdrawals of job offers?

The first step would be to demand that the employer honor the labor contract and pay the monthly salary promised under that contract. If the employer refuses, you could consider filing a lawsuit in court or taking your case to a labor tribunal.

In past cases like this where the outcome has favored the plaintiff, courts have tended to also grant compensation for the applicant’s mental distress and the payment of lawyers’ fees.

In cases where the applicant has been deprived of their opportunity to acquire a new job or to renew their previous job because of the illegal withdrawal, demands for lost revenue may also be considered.

Hiroshi Miyauchi is an attorney with the Foreigners and International Service Section at Tokyo Public Law Office, which handles a wide range of cases involving foreigners in the Tokyo area (www.t-pblo.jp/fiss) FISS lawyers address readers’ queries once a month. Phone 03-6809-6200. Send your questions to lifelines@japantimes.co.jp.

  • phu

    “Even if an employer was to suddenly find themselves in dire financial straits, that itself would be insufficient to satisfy the aforementioned criteria.”

    This is part of the reason the idea of doing business in Japan seems ludicrous to many foreign companies. The labor laws make it impossible, in many cases, to protect the company itself from bankruptcy.

    This is not a common problem for established corporations, but most companies are small companies, and despite the demonization the unethical behavior of larger firms often engenders, sometimes a company needs to fire people or lay them off, or cancel offers extended in good faith, in order to keep paying its vendors and remaining employees. It’s just one of the unfortunate realities of business.

    Not allowing this means business owners are going to need a lot more incentive than just a cut to the already-high corporate tax rate to risk establishing themselves in Japan.

  • Steve Jackman

    Haha, good luck getting justice in a Japanese court as a foreigner litigating against a Japanese company. You don’t know the meaning of the word “corruption”, until you’ve tried it. The judges, court clerks and even your own lawyers (under pressure from the judge) will conspire, lie and falsify materials to deny you due process and ensure any foreigner who has the gall to sue a Japanese party loses. Also, always make sure to make copies of all evidence you give your lawyers for your own records, since they’ve been known to mysteriously “lose” important evidence given to them by their own foreign client.