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วารสารกฎหมาย ศาลอุทธรณ์คดีชำานัญพิเศษ

3. The employer should base decision on reasonable criteria in selecting
employees to be discharged. This may include consideration of their salary,

benefits, age and other factors, and

4. The employer must make reasonable efforts to explain and obtain the consent
of the trade union or workers regarding the dismissals. The employees
must have the situation sufficiently explained to them in advance.

It is still premature to draw conclusions as to whether the COVID-19 outbreak

could be an «economic reason» justifying a workforce reduction. It is very difficult
to meet these four requirements because Japanese courts are strict when deciding whether
to accept the validity of dismissal of regular workers. Particular attention would need

to be paid to whether the employer’s financial health is declining and will continue to
decline due to the COVID-19 outbreak. If so, the COVID-19 outbreak may potentially
satisfy the requirement of “economic necessity” of the «four factor test.» However,

an employer would still need to satisfy the other requirements in order to proceed with
the termination of employment. For example, employer must try other measures less
26
severe than dismissal, such as job rotation and soliciting voluntary resignation in order

to meet the requirement of making good faith efforts to avoid dismissals.

Because of the sudden and unforeseeable outbreak of pandemics that caused
huge economic loss to many businesses, the requirements of the four-factors test might
be met. Specifically, courts may recognize the dire situation that employers now find

themselves in, with many employers facing possible bankruptcy. As a result, courts may
allow employers more flexibility to reduce workforce than under the ordinary

circumstances.

(b) Dismissal of Non-regular employees

With respect to non-regular employees, such as employees that are employed
on basis of fixed-term contracts, the courts have followed the general attitude regarding

26 The number of workers predicted to be dismissed nationwide exceeds 40,000. Results of the “Survey on
the Impact that Spreading Novel Coronavirus Infection has on Work and Daily Life” (August 26, 2020), The Japan
Institute for Labour Policy and Training; https://www.jil.go.jp/english/special/covid-19/survey/documents/20200826.
pdf

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