You Can Hire Someone in Japan. Letting Them Go Is Another Story.

You can hire someone in Japan. Letting them go is another story entirely.

Japan's labor law places a high bar on dismissal. Termination requires objectively reasonable grounds — and must be considered appropriate in light of general social norms. A dismissal that fails either test can be ruled invalid.

Even with a valid reason, the process is rarely quick or simple. Courts tend to look at whether the company gave warnings, offered guidance or training, and considered alternatives such as reassignment before deciding to dismiss.

Probation Is Not a Free Exit

Many foreign managers assume a probation period works as an easy way out. In Japan, it doesn't quite work that way. Dismissal during probation is judged somewhat more flexibly, but it still needs reasonable grounds.

Why It Matters

For foreign companies used to at-will employment, this is one of the biggest operational shocks of entering Japan. It affects how you write employment contracts and work rules, how you run performance reviews, and how carefully you choose your first hires.

Build your hiring decisions carefully. Exits are expensive here.

Natsuki Suzuki is the founder of BANTO, which provides back-office support — accounting, HR and payroll, and administration — to overseas companies and their Japan entities. She spent 15 years in Europe and brings both sides of the cultural equation to every engagement.