Labor & Employment Law

Employer Duty of Care in Japan: Mental Health & Multi-Employer Liability Explained

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read
Slide summarizing Osaka High Court decision on employer duty of care for mental health in multi-employer setups, highlighting overwork risks and compliance steps for US firms in Japan.

TL;DR

  • Osaka High Court (Oct 14 2022) held a primary employer liable for a worker’s depression caused by 300+ monthly hours across two jobs.
  • Liability turned on foreseeability of total hours and the employer’s control over scheduling.
  • Employee preference for long hours cut damages by 40 %, but did not cancel the duty of care.
  • US companies in Japan should tighten policies on secondary employment, track total hours, and train managers on mental-health obligations.

Table of Contents

  1. The Employer’s Duty of Care in Japan (Anzen Hairyo Gimu)
  2. The Case: Osaka High Court, October 14 2022
  3. Key Legal Issues and Analysis
  4. Implications for US Businesses in Japan
  5. Conclusion

The landscape of work is evolving globally, and Japan is no exception. While traditional lifetime employment models are still present, factors like economic pressures, demographic shifts, and a government push for flexible work styles are leading to increasingly complex employment arrangements. This includes a rise in concurrent employment (副業・兼業 - fukugyō/kengyō), where employees hold positions with multiple companies. While potentially offering benefits, these arrangements can create significant challenges for employers, particularly concerning the management of working hours, employee well-being, and legal liability when things go wrong.

A critical area of concern is the employer's responsibility for employee health, especially mental health, when an employee works excessively long hours across multiple jobs. A landmark decision by the Osaka High Court on October 14, 2022 (Reiwa 3 (Ne) No. 2534), provides crucial insights into how Japanese courts may assess employer liability in such situations, focusing on the employer's duty of care.

The Employer's Duty of Care in Japan (安全配慮義務 - Anzen Hairyo Gimu)

A fundamental concept in Japanese labor law is the employer's "Duty of Care" (安全配慮義務 - Anzen Hairyo Gimu). Enshrined in Article 5 of the Labor Contract Act, this duty obligates employers to take necessary measures to ensure the safety and health of their employees while they are working. This is a broad obligation extending beyond physical safety to encompass mental health. It includes managing workloads, preventing harassment, and generally creating a working environment where employees' life and health are not unreasonably jeopardized.

This duty complements the specific regulations found in the Labor Standards Act (労働基準法 - Rōdō Kijun Hō), such as limitations on working hours (Article 32) and the requirement for statutory days off (Article 35). Critically, Anzen Hairyo Gimu requires employers to proactively consider potential risks and take preventative measures. A breach of this duty can lead to civil liability for damages if an employee suffers harm, including mental health disorders, as a result of the working environment.

While the US has specific frameworks like OSHA for workplace safety and the ADA for disabilities, the Japanese Anzen Hairyo Gimu is a more encompassing contractual obligation derived from the employment relationship itself, placing a broad positive duty on the employer to ensure employee well-being, including protection from overwork-related health issues.

The Case: Osaka High Court, October 14, 2022

This case involved a complex web of employment relationships and tragically resulted in an employee's mental health deterioration.

The Facts:

  • The employee (X), a qualified hazardous materials handler, initially worked late nights and early mornings at a gas station under a fixed-term contract with Company Y1, starting February 2014. Company Y1 was acting as a subcontractor; the gas station's night operations were managed by Company C, which itself was contracted by the main operator, Company A, and potentially a competitor, Company B.
  • Crucially, from March 2014, employee X also entered into a separate fixed-term contract directly with Company A to work additional hours during non-late-night periods at the very same gas station.
  • Company Y1's internal work rules prohibited employees from taking up secondary employment without prior company approval.
  • The combined working hours for X across both Company Y1 and Company A became extremely long. For instance, monthly hours reached approximately 271, 270, and eventually over 303 hours in the months leading up to July 2014. Furthermore, from early February 2014 onwards, X effectively had no days off.
  • The court acknowledged that X had actively sought and desired these increased working hours.
  • X had a history of receiving treatment for anxiety and related symptoms since their late teens and had informed a manager at Company Y1 about this pre-existing condition and the possibility of needing occasional late arrivals due to it.
  • X resigned from the position with Company A at the end of June 2014. Company Y1 later notified X that their contract would not be renewed beyond March 2015.
  • In March 2015, X was diagnosed with severe depression with psychotic symptoms, followed by a diagnosis of adjustment disorder in November 2015.
  • The local Labor Standards Inspection Office approved workers' compensation (労災 - Rōsai) benefits for X in November 2015, recognizing the condition as work-related stemming from employment with Company Y1. (Note: Company Y2 later acquired Company A).
  • X sued Y1 (and Y2 as successor to A), seeking damages primarily based on a breach of the duty of care (Anzen Hairyo Gimu).

Lower Court and Appeal:

  • The Osaka District Court initially dismissed X's claims entirely.
  • X appealed to the Osaka High Court.

Osaka High Court Decision and Reasoning:

The High Court partially reversed the lower court's decision, finding Company Y1 liable for breaching its Duty of Care, while upholding the dismissal of claims against Company A (and its successor Y2).

  1. Violation of Labor Standards Act Principles: The court first recognized that the situation – extremely long hours and a complete lack of days off for months – clearly violated the spirit and intent of the Labor Standards Act's provisions on working hours (Art. 32) and mandatory rest days (Art. 35).
  2. Company Y1's Liability (Found Liable): The court held Y1 breached its Anzen Hairyo Gimu towards X. The key factors were:
    • Knowledge/Foreseeability: Y1's area manager knew, or reasonably should have known, about X's working hours for Y1. Given that X also worked for Company A at the same physical location and considering the known contractual links (A contracted C, C subcontracted Y1), the court reasoned that Y1 could and should have made inquiries with Company A to ascertain X's total working hours. The court explicitly distinguished this from typical cases of unrelated secondary employment where the primary employer might have no easy way of knowing the employee's total workload. Y1 became aware of the concurrent employment by March 2014.
    • Ability to Control: Y1 had practical control over X's schedule through its shift system and general supervisory authority. Y1 could have intervened to prevent the excessive hours, for instance, by refusing to approve shifts requested by X that would lead to overwork.
    • Failure to Act: Despite knowing about the concurrent employment and the potential for excessive hours, Y1 failed to take concrete steps to investigate X's total workload with Company A or effectively mitigate the risks. Simply asking X to quit the job at A was deemed insufficient without ensuring the dangerously long hours ceased. This failure constituted the breach of the duty of care.
    • Employee's Request: The court stated that X's own desire to work the long hours did not negate Y1's duty of care. Y1, as the employer with knowledge and control, retained its obligation to protect X from the health risks of overwork. X's preference was considered relevant only when determining the level of damages (i.e., for assessing comparative negligence).
  3. Company A's Liability (Found Not Liable): The court found that Company A (and its successor Y2) did not breach a duty of care towards X. The reasoning included:
    • Secondary Nature of Employment: The court viewed X's work for A as occurring primarily outside of X's main working hours with Y1, essentially in X's "private time." Therefore, A was not obligated to proactively investigate X's working hours with Y1.
    • Employee Initiative: X had specifically requested the increased working days from Company A.
  4. Comparative Negligence: While finding Y1 liable, the court reduced the damages awarded to X by 40%. This reduction was based on the principle of comparative negligence (過失相殺 - kashitsu sōsai), acknowledging that X actively sought and contributed to the situation of working excessive hours.

This judgment navigates complex territory at the intersection of evolving work patterns, employer responsibilities, and mental health.

1. Duty of Care Across Multiple Employers:

The core issue is the extent of an employer's duty of care when an employee works for others. The Osaka High Court suggests liability hinges significantly on foreseeability and control. Company Y1 was liable because the concurrent employment was happening at the same location under related contracts (making total hours knowable) and Y1 controlled X's primary shifts (giving it control over workload).

The reasoning for absolving Company A appears less robust. While X worked for A during non-Y1 hours, the extreme total hours and lack of rest days created a holistic risk. The court's distinction – suggesting A had less duty because its work was in X's "private time" and initiated by X – seems inconsistent with how X's initiative was treated regarding Y1's liability (where it only impacted damages, not the duty itself). The commentary around the case rightly questions whether this distinction between a "primary" and "secondary" employer holds up logically when the overall risk stems from the combined workload. This area remains complex, especially as non-traditional work like platform-based gig work becomes more common, further blurring lines of employer control and knowledge.

2. Anzen Hairyo Gimu and Mental Health:

The case reaffirms that the employer's duty of care in Japan strongly encompasses protecting employees from mental health risks associated with overwork. Long working hours are a well-recognized risk factor for depression and other mental health conditions in Japan, and employers are expected to manage workloads accordingly. The Ministry of Health, Labour and Welfare (MHLW) has issued guidelines on preventing workplace harassment ("power harassment") and managing mental health, which often intersect with issues of overwork. Furthermore, the approval of X's workers' compensation claim underscores the administrative recognition of a link between X's work (specifically for Y1) and the mental health breakdown, even if the standard for civil liability requires separate proof.

3. Impact of Employee Preference for Long Hours:

The court's handling of X's desire to work long hours is noteworthy. For Company Y1, it did not eliminate the duty to prevent harm but significantly reduced the damages via comparative negligence. This suggests that while employers cannot simply defer to an employee's potentially harmful choices regarding work hours, the employee's own actions and preferences can substantially impact the final financial outcome in a legal dispute. This raises questions about how to balance employee autonomy with the employer's protective duties, a tension likely to increase with more flexible work arrangements.

4. Fukugyō/Kengyō (Concurrent Employment) Guidelines:

The Japanese government has been promoting concurrent employment. MHLW guidelines exist to help navigate this. These guidelines acknowledge that potential problems arise if an employer, knowing the employee's total workload is excessive, fails to take any considerate action, leading to health impairment. They also suggest that employers can, typically through work rules, prohibit or restrict concurrent employment if it demonstrably interferes with the employee's ability to perform their duties for the primary employer (e.g., due to fatigue caused by excessive total hours). The Osaka High Court case provides a judicial perspective aligning with this, suggesting that knowledge of excessive total workload (actual or constructive) can trigger the duty of care, irrespective of which "job" technically causes the fatigue.

Implications for US Businesses in Japan

This ruling and the surrounding legal context offer important considerations for US companies employing staff in Japan:

  • Policies on Concurrent Employment: Establish clear policies regarding secondary employment. This might include requiring disclosure, an approval process, or setting guidelines on permissible types or total hours of outside work to manage risks related to fatigue, conflicts of interest, and duty of care.
  • Working Hour Management: Diligently track and manage working hours for all employees, particularly non-exempt staff, to comply with the Labor Standards Act and mitigate risks of overwork. This includes overtime and holiday work.
  • Duty of Care Training: Train managers on the concept of Anzen Hairyo Gimu, emphasizing its application to both physical and mental health. Equip them to recognize signs of employee distress or overwork and understand reporting/intervention procedures.
  • Addressing Known Concurrent Work: If management becomes aware that an employee is working significant hours elsewhere, especially if it's operationally related or impacts performance/well-being, a duty to inquire further about the total workload and associated health risks may arise, as suggested by the Y1 liability finding. Document any discussions and actions taken.
  • Employee Preference vs. Employer Duty: Understand that an employee's stated willingness to work long hours does not absolve the company of its fundamental duty of care to prevent harm from overwork, although it might be a factor in assessing damages later.
  • Mental Health Awareness: Recognize the strong legal protections and societal awareness surrounding work-related mental health issues in Japan. Foster a workplace culture where employees feel safe to discuss workload concerns.

Conclusion

The Osaka High Court's decision serves as a significant reminder that the employer's duty of care (Anzen Hairyo Gimu) in Japan is a substantial obligation that extends to protecting employees from the risks of overwork, even in complex multi-employer situations. While the specifics of liability may depend on factors like foreseeability and control, employers cannot ignore the potential health consequences stemming from excessive total working hours once they become aware, or reasonably should be aware, of the situation. As concurrent employment becomes more prevalent, companies operating in Japan must proactively manage working hours, implement clear policies, and prioritize employee well-being – both physical and mental – to meet their legal obligations and mitigate potentially significant liability risks. The employee's own choices may influence damage calculations, but the fundamental duty to provide a safe working environment remains firmly with the employer.