Leave for a Strike? Japan's Supreme Court on Annual Leave and Workplace Industrial Action (November 19, 1991)

On November 19, 1991, the Third Petty Bench of the Supreme Court of Japan delivered a significant judgment in a wage claim case, often referred to by commentators as the "Tsudanuma Train Depot Case" (津田沼電車区事件). This ruling explored the complex interplay between an employee's right to take paid annual leave (年次有給休暇 - nenji yūkyū kyūka or 年休 - nenkyū) and their participation in industrial action, specifically a strike, occurring at their own workplace. The decision delves into whether leave, even if previously requested and factually approved, can be considered a legitimate exercise of the annual leave right if then used with the intent to disrupt the workplace's normal operations through strike participation.

The Factual Backdrop: A Strike and a Pre-Approved Leave Day

The plaintiff, X, was an employee of Company Y (formerly Japanese National Railways, JNR, which later became the JNR Settlement Corporation following reforms). In November 1985, X worked in the driving and inspection section of the T Train Depot, under the C Railway Management Bureau. X was also an executive committee member of the T branch of the A Labor Union.

Key circumstances leading to the dispute were:

• Workplace Context: The T Train Depot encompassed several departments, including X's inspection section and the mainline train operations section. While these departments had different core tasks, they were closely interconnected in ensuring passenger train operations. The manager of the T Train Depot was responsible for administering paid annual leave and for deciding whether to exercise the employer's right to change the timing of an employee's requested leave (時季変更権 - jiki henkōken). For the purposes of labor-management agreements on overtime (under Article 36 of the Labor Standards Act), the entire T Train Depot was treated as a single workplace.
• The Union's Strike Action: The A Labor Union, with objectives that included opposing the then-impending privatization of JNR, decided to conduct a 24-hour strike. This strike was advanced from its originally scheduled date and took place from noon on November 28, 1985, to noon on November 29, 1985. The industrial action was centered at the A Labor Union's T branch (X's workplace) and its C Operating District branch, primarily targeting passenger train crew members operating services west of C City. This strike resulted in significant disruptions, including numerous cancellations and delays of passenger trains on both days.
• X's Leave Request and Subsequent Actions:
  • On November 21, 1985, well before the final strike date was set, X had submitted a request for a half-day of paid annual leave for the afternoon of November 28.
  • On November 27, the A Labor Union finalized its decision to bring the strike forward to commence at noon on November 28. X became aware of this revised strike schedule through internal union communications.
  • After learning of the advanced strike timing, X confirmed with an assistant stationmaster (助役 - joyaku) that the leave request for the afternoon of November 28 had, in fact, been approved by the management. X then chose to maintain this leave request and did not report for duty on that afternoon.
  • During this period of absence from work on the afternoon of November 28, X actively participated in the strike:
    • From around 11:55 AM, X attended a union members' assembly held near the A Labor Union's T branch office.
    • At a strike rally conducted on the T Train Depot premises from after 4:00 PM to after 6:00 PM, X stood before the union members alongside another union executive and led them in protest chants (シュプレヒコール - shupurehikōru).
    • Around 1:00 PM, at the T Train Depot's instructor's office, X, along with other union officials, loudly confronted and berated an assistant stationmaster concerning the management's decision to assign instructors to operate trains as a countermeasure to the strike. This action by X was found to have obstructed the assistant stationmaster in the performance of official duties. The courts found that X played an active role in this industrial action.
• Company Y's Response and X's Claim: Company Y did not recognize X's absence on the afternoon of November 28 as legitimate paid annual leave. Instead, it treated the absence as unauthorized (欠勤 - kekkin) and made a corresponding deduction from X's wages. X subsequently filed a lawsuit to recover the amount of the wage cut and also sought an additional "punitive" payment (附加金 - fukakin, a specific remedy under the LSA for certain wage violations).

The Lower Courts: Leave for Disruptive Strike Not Genuine

Both the Chiba District Court (first instance) and the Tokyo High Court (on appeal) ruled against Plaintiff X.

• Chiba District Court: Dismissed X's claim. The court reasoned that it was evident X had no intention of complying had the depot manager exercised the right to change the timing of the leave. It found that X maintained the leave request specifically with the intent of participating in the industrial action at X's own workplace (the T Train Depot). Furthermore, this industrial action, both in its intent and its actual consequences, was of a scale and manner that disrupted the normal operations of the depot. Therefore, the court concluded that X's actions were, in substance, participation in a strike under the guise of taking annual leave, and not a genuine exercise of the right to paid annual leave.
• Tokyo High Court: Upheld the District Court's decision. It added that even if an employee, acting independently of any union directive, takes paid annual leave with the intention of participating in industrial action at their own workplace, if that industrial action is of such a scale or nature as to disrupt the normal operations of that workplace, then paid annual leave is not legitimately established.
  Plaintiff X appealed this decision to the Supreme Court.

The Supreme Court's Decision: Upholding the Denial of Leave

The Supreme Court dismissed X's appeal, affirming the judgments of the lower courts.

The Court's central reasoning was: "X, with the intent of participating in the said industrial action and disrupting the normal operation of their workplace, the T Train Depot, took advantage of the fact that the authorities had factually approved their earlier request for annual leave, maintained this request, and left the workplace. Such a departure from the workplace, given that the paid annual leave system presumes the existence of a normal work system for operating a business subject to the Labor Standards Act and grants leave within that framework, runs contrary to the purpose of the paid annual leave system. It cannot be said to be a genuine exercise of the right to paid annual leave. Therefore, paid annual leave was not established on the day X designated. The High Court's judgment, which is recognized as being to the same effect, can be affirmed as correct."

Deconstructing the "Purpose of the Annual Leave System"

This decision by the Supreme Court navigates the tension between the established "principle of free use of annual leave" and the integrity of workplace operations during industrial disputes.

• The Principle of Free Use: As established in earlier landmark Supreme Court rulings (notably the 1973 "Shiraishi Forestry Office Case" and "Kokutetsu Koriyama Kojo Case"), the general principle is that "the purpose for which annual leave is used is a matter outside the purview of the Labor Standards Act, and how leave is used is the worker's freedom, not subject to employer interference." This principle generally means employers cannot deny leave based on why the employee wants it.
• Departure from Previous Rulings on "Leave Struggles"? The commentary highlights that earlier Supreme Court discussions (often obiter dicta, or non-binding remarks) had addressed union-directed "leave struggles" (休暇闘争 - kyūka tōsō). For instance, the 1973 judgments suggested that a concerted leave-taking struggle by all workers simultaneously to disrupt operations was essentially a strike in disguise and not genuine leave. Later, in the 1986 "Yubari Minami High School Case," the Court indicated that the aim of such concerted leave actions was to disrupt operations by ignoring the employer's right to change leave timing, thereby undermining the annual leave system's premises.
  The Tsudanuma case, however, presented a nuanced scenario: it was not a case of a union directive ordering employees to take leave as part of a struggle. Instead, X spontaneously decided to maintain an individually requested and factually approved leave day to actively participate in a strike that subsequently coincided with that leave day at X's own workplace. The commentary suggests this ruling set a new precedent for such cases of individual, spontaneous use of leave for strike participation at one's own establishment.
• The "Normal Work System" Premise: The Supreme Court's key justification was that X's actions, driven by the intent to disrupt operations at the T Train Depot, violated the "purpose of the paid annual leave system." This purpose, according to the Court, is to grant leave within the framework of a normally functioning work system.
• Ambiguities and Criticisms: The judgment's reliance on the "normal work system" premise has faced scrutiny. The commentary points out a lack of clarity: What precisely defines this "normal work system"? If industrial action occurs in one part of a workplace, does this automatically invalidate all annual leave taken by any employee on that day, irrespective of their union affiliation or involvement? What level of activity constitutes "participation in industrial action at one's own workplace" for the purpose of negating leave?
  A more fundamental critique, noted in the commentary, questions the very basis for denying leave establishment when the employer did not exercise their right to change the timing. If leave was factually approved (or, more accurately, if the employee designated the timing and the employer did not validly change it), the employee's obligation to work on that day should have been extinguished. If so, that employee could not logically be considered "on strike" in terms of withholding labor for which they were scheduled. While their participation in rallies or other protest activities during their leave time could be evaluated under other legal frameworks, their entitlement to paid annual leave for that day should, from this perspective, remain intact.

Subsequent Developments and the Ongoing Debate

• The "Kokutetsu Nogata Jidosha Eigyosho Case" (1996): A later Supreme Court case involved bus drivers who took paid annual leave and participated in a workplace meeting during a strike by day-shift workers at their depot. In that instance, the Supreme Court upheld a lower court decision that had invalidated both wage cuts and disciplinary actions against the drivers. Although the outcome in Nogata favored the employees, legal commentators generally view the underlying judicial framework as consistent with the Tsudanuma decision. The differing results are often attributed to the specific facts, particularly the greater degree of operational separation between the work of the bus drivers (who were on leave) and the work of the day-shift employees who were the primary targets of the strike in the Nogata case, compared to the more direct involvement and intent to disrupt found in Tsudanuma.
• The Enduring Academic Discussion: The question of using annual leave for industrial action continues to be debated. The commentary author expresses support for a broader application of the "free use of annual leave" principle, arguing that the employer's primary recourse should be the lawful exercise of their right to change leave timing (jiki henkōken). The rationale is that the purposes of annual leave are manifold, encompassing not only rest and recuperation but also providing opportunities for diverse social and cultural activities. Excluding participation in industrial action from this broad spectrum of activities, it is argued, lacks compelling justification. While the doctrine of "abuse of rights" could theoretically apply to an employee's exercise of their right to designate leave timing (for example, if done in a way that makes it impossible for the employer to exercise their right to change timing), if the employer can still exercise their right to change timing (even if post-hoc), then the scope for an abuse of rights claim by the employer may be limited.

Conclusion: Balancing Rights in a Contentious Arena

The Supreme Court's judgment in the Tsudanuma Train Depot Case underscores the judiciary's attempt to balance an employee's statutory right to paid annual leave with the employer's interest in maintaining normal business operations, especially in the context of industrial action occurring at the employee's own workplace. By focusing on the employee's intent to disrupt operations and finding this contrary to the underlying "purpose of the paid annual leave system," the Court denied the establishment of leave, even though it was factually approved and the employer had not exercised its right to change the timing. This decision highlights that while the use of annual leave is generally at the employee's discretion, this freedom is not considered absolute when juxtaposed with actions aimed at disrupting the very operational framework within which the leave system is designed to function. The precise boundaries of this principle, particularly in distinguishing legitimate leave from participation in industrial action, remain a nuanced and debated area of Japanese labor law.