“Discipline” (chōkai) — a miserable word if there ever was one. Being scolded as a child is part of growing up, but for us adults, being disciplined can be a particularly humiliating experience. But how much more humiliated would we feel if the grounds for the discipline were arbitrary, unfair or out of proportion? Do employers even have the legal right to discipline their employees? If so, are there any restraints, or can they discipline at will?

Labor law scholars split into two camps regarding the right to discipline. One advocates a theory called koyūkensetsu, asserting that the right to discipline is inherent to the practice of running a business. The other, keiyakusetsu, claims that the right derives solely from an agreement or contract between employer and employee. Without specifying any legal basis for the right to discipline, courts have proceeded on the assumption that employers have that right and have turned their attentions to drawing the line between legitimate and illegitimate disciplinary measures.

In the well-known Fuji Kosan case, the Supreme Court Petty Bench ruled on Oct. 10, 2003, that employers must stipulate in advance the disciplinable offenses, as well as the type and degree of discipline, in the shūgyō kisoku official work rules (see also “Work-rules verdict jars with laws aimed at leveling playing field for employees,” Labor Pains, Sept. 18). This is covered by Articles 89 and 91 of the Labor Standards Law. (Note that in the law, chōkai is called seisai, or “sanction.”)

Courts set the bar lower for disciplinary measures other than dismissal, of course, and there are many types of sanctions: ordering the writing of a shimatsusho apology letter, for example, a simple pay cut, demotion, suspension (with or without pay) and, ultimately, the dreaded “disciplinary dismissal.” The last exempts an employer from paying some or all of any promised severance package and from giving a month’s notice or pay in lieu, as is required for ordinary dismissals.

The bar for a disciplinary dismissal (chōkai kaiko) is much higher than for a regular dismissal. The gravity of the offense must be so serious as to merit what is considered in Japan to be a “vocational execution.”

Article 15 of the Labor Contract Law, enacted in 2007, requires that all disciplinary measures be “objective, rational and based on offenses that are sufficiently grave according to social norms.” If not, they are deemed “an abuse of the right to discipline” (chōkaiken ranyō hōri) and are therefore invalid.

The first case in which this legal principle came up involved Daihatsu Motor Co. The district and high courts overturned parts of the discipline against the plaintiff, but the Supreme Court Petty Bench on Sept. 16, 1983, overturned the lower courts’ rulings and validated all the chōkai, including the disciplinary dismissal. This case is exceptional since usually it is quite difficult to get away with a disciplinary dismissal.

Let’s examine the facts of the case.

Plaintiff X worked for Daihatsu Motor. He also participated in demonstrations against the Japan-U.S. treaty to return Okinawa. He was arrested and detained during a demo on suspicion of “assembling with offensive weapons.” After his release, he returned to work but refused to appear before his boss to explain what had happened. The company suspended him with pay, but X showed up and tried to enter the factory floor, leading to repeated kerfuffles with security guards. Daihatsu suspended him without pay for 20 days (the first disciplinary action contested in the case).

X returned to the factory and again pushed his way in, this time injuring a security guard. He then leafleted and protested in front of the company. So management suspended him without pay for a further 20 days (the second disciplinary action).

After the 20 days were up, the company ordered him to remain home but with pay. X came back to the workplace, got into a fight with another guard and ended up causing the plant’s conveyor belt to cease operation for three minutes. X returned again on a later date, attacking and injuring yet another guard. The firm then hit him with a disciplinary dismissal.

The lower and high courts both said the first penalty was valid but overturned the second one and the dismissal. Daihatsu Motor appealed to the Supreme Court, which ruled that all three disciplinary steps were legitimate.

The court’s thinking was as follows: Abuse of the right to discipline only exists when the disciplinary action lacks objective, rational grounds or is considered beyond ordinary social norms, based on the circumstances of the offense. From that perspective, circumstances such as injuring a guard are more severe than the original offense that prompted the first discipline. The actions were also after the first discipline, meaning the employee showed no effort to rectify his behavior. Therefore the second discipline was objective and rational.

The plaintiff also injured multiple guards and caused the plant’s conveyor belt to stop. This was sufficient to warrant a disciplinary dismissal. The lower court noted that the stoppage caused little actual damage, but the Supreme Court said that any kind of obstruction of business causing concrete damage must be taken seriously. X’s actions caused disorder in the company and grossly violated workplace rules. Therefore, the court decided the disciplinary dismissal had sufficient objective and rational grounds.

What do readers think of the Supreme Court overturning lower court rulings to recognize all three disciplinary actions? One thing that can be said is that employees are at an overwhelming disadvantage if they try to take on their employer head-on. The company can take refuge in vague notions such as “corporate order” and “workplace rules.” Mr. X was able to evade vocational execution in the two lower courts, but the Supreme Court dropped the trapdoor.

This case unfortunately might send a message to workers that if they stand up against the company, they risk facing disciplinary dismissal. This ruling could have a chilling effect and terrify workers into shutting the heck up rather than addressing unfair, unethical or even illegal behavior — hardly conducive to a healthy relationship between labor and management.

Hifumi Okunuki teaches constitutional and labor law at Daito Bunka University and Jissen Women’s University, among others. She also serves as paralegal for Zenkoku Ippan Tokyo General Union. On the third Tuesday of each month, Hifumi looks at a famous case in Japan’s legal history to illustrate an important principle in labor law. Send your comments and story ideas to community@japantimes.co.jp .

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