Glossary

Forms of Employment within the Japanese Labor Market

1.Regular employee

Term
Indefinite-term

Working conditions
In accordance with the rules of employment.

Characteristics of Japanese labor market
・Long-term employment is assumed based on a labor contract without a definite period.

・In general, the contract ends at retirement age (at the age of 60 in most cases).
Retired employees are often reemployed as contract employees or others until the age of 65.

2.Contract employee

Term
Definite-term

Working conditions
In accordance with the rules of employment.
The conditions are also incorporated in the labor contract.

Characteristics of Japanese labor market
・The term of the contract is up to three years in most cases. The employee retires when the term of the contract expires, although the worker may be employed continuously by renewing the contract. In the majority of such cases, the term of the contract is one year.

・The contract may be changed to a labor contract without a fixed term if desired by an employee continuously working for the same company after five years.

3.Dispatch employee

Term
Definite-term

Working conditions
In accordance with the labor contract concluded between a staffing company and a temporary employee based on the staff dispatch contract between the company receiving the temporary employee and the staffing company.

Characteristics of Japanese labor market
・A staffing agency dispatches contract employees to their clients.

・Under dispatch contracts, the term of employment is either definite (three months, one year etc), or indefinite.  

・Definite-term employment regulations prohibit a dispatch employee from working at the same position within an organization for more than three years.  

To extend beyond this term,
(1) employees must be allocated to a different section within
the dispatch destination once the three year limit has been reached*, or (2) they must obtain indefinite employment status at the dispatch source.
* It is assumed that the destination company will obtain permission to extend the period of employment. 

4.Part-time worker

Term
Definite-term

Working conditions
In accordance with the rules of employment.The conditions are also incorporated in the labor contract.

Characteristics of Japanese labor market
・A short-term, temporary, supplementary form of employment.

・In general, temporary work done by students is referred to as “arbeit,” and work by workers for a specific period over specified work hours is referred to as “part-time work”
(although they are not specifically differentiated).

・ Young people making a living by working as temporary staff, not as regular employees, and who are not students or housewives are called “free arbeiters (freeters).”Part-timers may in theory work the equivalent of a full-time schedule.

5.Subcontracted employee

Term
Definite-term

Working conditions
In accordance with the labor contract between a subcontracting company and a subcontracted worker.
(The contract specifies the product, time of delivery, etc. for each detail of work)

Characteristics of Japanese labor market
・The subcontracted worker concludes an agreement with companies, etc. to perform the subcontracted operation. No labor contract is concluded between the outsourcing company and the outsourced (contractor) company.

・The outsourcing company provides instructions for the operation to the outsourced company and does not directly instruct the subcontracted workers.

(note) Any statements made herein are made solely for provision of information. DIP has neither verified nor is it responsible for the accuracy of such information.