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The Diet enacted a new labor standards law Friday that sets out clear guidelines on the dismissal of employees.

The House of Councilors approved the legislation with the support of the ruling coalition, the Democratic Party of Japan and the Liberal Party. The law has already cleared the House of Representatives.

It will be enforced within half a year of its promulgation.

The Health, Labor and Welfare Ministry initially sought to give employers wider discretionary powers to dismiss workers, with the initial draft submitted by the government simply noting that “employers can dismiss employees.”

The government retreated from this stance amid objections from the DPJ. The legislation now states that dismissal “without objectively rational reasons and not in line with accepted social customs” would be illegal.

In another major revision to employment practices, the new law extends the maximum length of temporary employment contracts from one year to three years.

Labor organizations have objected to this provision, arguing that extending these contracts would lead to more labor market instability.

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