Labor & Employment Law

LGBTQ+ Workplace Inclusion in Japan: Legal Gaps and Corporate Best Practices

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read
Slide summarizing Japan's legal gaps on LGBTQ+ employment protections, key 2023 court rulings, and corporate best practices for inclusive workplaces
TL;DR
Japan still lacks a national anti-discrimination statute protecting LGBTQ+ workers, leaving a patchwork of local rules and case law. U.S. and multinational employers should therefore go beyond legal minimums: add SOGI to internal policies, offer partner benefits, provide gender-neutral facilities, and engage in dialogue-based reasonable accommodation. Recent court decisions (e.g., the 2023 Supreme Court METI restroom case) and the 2023 Understanding Promotion Act signal rising expectations, while power-harassment guidelines already oblige employers to prevent “outing” and SOGI harassment. Inclusive practices are now a core ESG benchmark in Japan.

Table of Contents

  • The Legal Landscape: A Patchwork of Protections and Gaps
  • Key Challenges and Legal Issues in the Workplace
      1. Hiring and Advancement Barriers
      2. Navigating Gendered Workplace Norms and Facilities
      3. Workplace Harassment: SOGI Harassment and the Harm of "Outing"
  • The Emerging Discussion on "Reasonable Accommodation"
  • Corporate Best Practices: Filling the Legislative Void
  • The Path Forward for Inclusion in Japan

The global conversation around LGBTQ+ (Lesbian, Gay, Bisexual, Transgender, Queer/Questioning, and others) rights and workplace inclusion has gained significant momentum in recent years. For multinational corporations, fostering a diverse and inclusive environment is not only a matter of social responsibility but also a key driver of talent acquisition, innovation, and brand reputation. As businesses navigate the complexities of different cultural and legal landscapes, Japan presents a unique scenario – a society with growing awareness but a legal framework that is still catching up to international trends in LGBTQ+ protections.

This article explores the current legal situation concerning LGBTQ+ rights in Japanese employment, examines key challenges faced by individuals and companies, and discusses emerging best practices for U.S. businesses aiming to create truly inclusive workplaces in Japan.

Unlike many Western nations, Japan currently lacks comprehensive national legislation explicitly prohibiting discrimination based on sexual orientation or gender identity (SOGI) in employment. This absence forms the backdrop against which LGBTQ+ individuals navigate their professional lives.

  • National Level – The "Understanding Promotion" Act: In June 2023, Japan enacted the "Act on Promotion of Public Understanding of LGBTQ" (LGBT理解増進法 - LGBT Rikai Zōshin Hō). However, this law has been met with mixed reactions. It primarily focuses on promoting understanding and calls for non-discriminatory efforts by the government, local authorities, and businesses, rather than establishing legally binding anti-discrimination provisions or creating new rights. It does not, for instance, explicitly prohibit discrimination in hiring, promotion, or other terms of employment based on SOGI, nor does it provide clear legal recourse for victims of such discrimination.
  • Interpreting Existing Laws: Attempts to extend the protections of existing laws, such as the Equal Employment Opportunity Act (EEOL), to cover SOGI discrimination have generally been unsuccessful. The EEOL primarily addresses discrimination based on "sex" (biological sex), and courts have been hesitant to interpret this to include sexual orientation or gender identity.
  • Local Government Initiatives: In the absence of robust national legislation, some prefectural and municipal governments have taken the lead. Tokyo, for example, enacted an ordinance in 2018 that explicitly prohibits discrimination based on sexual orientation and gender identity, representing a more progressive stance. Several other local governments have introduced partnership systems that recognize same-sex couples, though these systems primarily offer limited administrative benefits and do not confer the same legal rights as marriage.
  • Constitutional Debates: There are ongoing legal challenges arguing that the lack of legal recognition for same-sex marriage or protections against SOGI discrimination violates constitutional guarantees of equality. While lower courts have issued varying opinions – some finding the denial of marriage equality unconstitutional – the Supreme Court has yet to make a definitive ruling on these broader issues that would directly reshape employment law nationwide.

The lack of comprehensive legal protection gives rise to a range of challenges for LGBTQ+ employees in Japan. These issues span from hiring to daily workplace experiences and are increasingly being discussed in legal and academic circles.

1. Hiring and Advancement Barriers:

LGBTQ+ individuals often face hurdles even before entering the workforce. Traditional resume formats in Japan long included mandatory gender selection, which could be problematic for transgender or non-binary individuals. While the Japan Industrial Standards (JIS) resume format example removed the gender field in 2020 and the Ministry of Health, Labour and Welfare released a new model resume in 2021 suggesting an optional gender field, company-specific application forms may still pose challenges.

Once employed, concerns about discrimination in promotions, assignments, or even dismissal due to SOGI remain. While overt discrimination may be difficult to prove without explicit legal prohibitions, a workplace culture that is not openly inclusive can lead to LGBTQ+ employees feeling marginalized or fearing that their SOGI could negatively impact their career progression. Denying benefits typically offered to spouses of employees (such as family allowances, leave, or housing) to same-sex partners is another area of concern, although some progressive companies are voluntarily extending such benefits.

2. Navigating Gendered Workplace Norms and Facilities:

Workplace rules and the use of facilities designed around a strict gender binary can create significant difficulties, particularly for transgender and gender non-conforming individuals.

  • Dress Codes and Appearance: Company dress codes that are rigidly gendered can be a source of stress and discrimination. Forcing employees to adhere to dress standards that do not align with their gender identity can be challenged, though the legal outcomes have varied. For example, in a case decided by the Tokyo District Court on June 20, 2002, a company's disciplinary dismissal of a transgender woman for not complying with a業務命令 (gyōmu meirei - work order) to refrain from wearing female attire at work (prior to her intended transition at work) was found to be an abuse of rights and thus invalid.
  • Restroom and Changing Room Access: The use of gender-segregated facilities, such as restrooms and changing rooms, is a particularly sensitive and frequently litigated issue. A landmark decision by Japan's Supreme Court on July 11, 2023, in a case involving a transgender employee at the Ministry of Economy, Trade and Industry (METI), ruled that restrictions placed on her use of women's restrooms on her floor were illegal. The Court emphasized the importance of an individual's right to live according to their self-identified gender. This decision is significant, though its direct applicability and impact on private-sector employers are still being assessed. Lower court decisions have shown varying degrees of support for transgender individuals' right to use facilities aligning with their gender identity, often weighing the transgender employee's needs against the concerns or "privacy" of other cisgender employees. The Tokyo District Court ruling on December 12, 2019 (the first instance of the aforementioned METI case) and the Tokyo High Court ruling on May 27, 2021, grappled with these balancing acts.

3. Workplace Harassment: SOGI Harassment and the Harm of "Outing"

Harassment based on sexual orientation or gender identity (SOGI harassment) is a serious concern. This can range from offensive jokes and derogatory comments to more severe forms of bullying and exclusion.

  • "Outing" as a Form of Harassment: "Outing" – the act of disclosing an individual's SOGI without their consent – is increasingly recognized as a particularly egregious form of harassment that can have devastating consequences for the individual's personal and professional life.
  • Legal Recognition and Responses:
    • The revised guidelines accompanying Japan's Power Harassment Prevention Act (enacted in 2019 for large companies, 2022 for SMEs) explicitly include SOGI harassment and outing as examples of workplace power harassment (パワハラ - pawahara). This means employers have a legal obligation to take preventive measures.
    • In a significant development, a case in March 2022 saw a worker whose SOGI was outed by their superior, leading to mental health issues, being recognized for rōsai (労災 - workers' compensation). This marked a crucial acknowledgment of the severe harm outing can cause.
    • While sexual harassment guidelines (under the EEOL) state that they apply regardless of the victim's SOGI, they are primarily focused on unwanted sexual conduct. SOGI harassment that is not overtly sexual in nature (e.g., persistent misgendering, mockery of gender expression) might not always fit neatly under traditional sexual harassment frameworks, making the specific inclusion under power harassment guidelines more impactful.
  • Constitutional Right to Privacy: Unwanted disclosure of SOGI can also be considered a violation of the constitutional right to privacy. While not always directly translating into employment law remedies, this principle underpins the severity with which outing is viewed.

The Emerging Discussion on "Reasonable Accommodation"

While Japan does not have a broad legal mandate for "reasonable accommodation" for LGBTQ+ employees in the same way it exists for employees with disabilities, the concept of providing appropriate consideration and making adjustments is gaining traction, particularly in discussions surrounding transgender employees.

The METI restroom case, for instance, implicitly touched upon the employer's responsibility to find workable solutions. The legal discourse suggests that a one-size-fits-all approach is inadequate. Instead, a process of dialogue between the employer and the LGBTQ+ employee is often emphasized as crucial for identifying and implementing necessary adjustments. This could involve:

  • Allowing the use of restrooms that align with an employee's gender identity.
  • Offering gender-neutral restroom options if available and desired.
  • Flexibility in dress codes.
  • Ensuring IT systems and official documents can correctly reflect an employee's affirmed name and gender, even if legal gender recognition has not been completed (which itself has stringent requirements in Japan, including surgery, though these are being challenged).

The key is to balance the needs of the individual employee with the operational requirements of the business and the concerns of other employees, though the Supreme Court's METI decision signals that blanket denials based on abstract concerns of other employees may not be justifiable.

Corporate Best Practices: Filling the Legislative Void

In the absence of comprehensive national anti-discrimination laws, many companies in Japan, particularly multinational corporations and those with a strong focus on ESG (Environmental, Social, and Governance) principles, are voluntarily adopting LGBTQ+ inclusive policies and practices. These proactive measures are crucial for creating a welcoming and supportive environment.

Common best practices include:

  1. Clear Anti-Discrimination Policies: Explicitly including sexual orientation and gender identity in company-wide non-discrimination and anti-harassment policies.
  2. LGBTQ+ Awareness Training: Conducting regular training for all employees, including management, to foster understanding, challenge biases, and promote respectful communication.
  3. Employee Resource Groups (ERGs) and Ally Networks: Supporting or encouraging the formation of LGBTQ+ employee networks and ally groups to provide peer support, raise awareness, and offer feedback to management.
  4. Inclusive HR Systems and Benefits:
    • Reviewing and revising HR policies, including recruitment materials, to be gender-neutral and inclusive.
    • Extending spousal benefits (e.g., leave, health benefits where company-provided, congratulatory payments) to employees with same-sex partners, where legally feasible and as a voluntary measure of equality.
    • Providing support for transgender employees undergoing gender transition, such as flexible leave for medical appointments or processes for changing names and gender markers in company records.
  5. Confidential Consultation Services: Establishing confidential channels for employees to seek advice or report concerns related to SOGI issues without fear of reprisal.
  6. Gender-Neutral Facilities: Where possible, providing gender-neutral or all-gender restroom options.
  7. External Engagement and Benchmarking: Participating in initiatives like the "PRIDE Index" (an annual evaluation of Japanese companies' LGBTQ+ inclusion efforts) to benchmark progress and demonstrate commitment.

The business case for such initiatives is compelling. Inclusive workplaces are better able to attract and retain diverse talent, foster greater employee engagement and productivity, enhance innovation through diverse perspectives, and improve the company's brand image among customers and stakeholders.

The Path Forward for Inclusion in Japan

The landscape of LGBTQ+ rights in corporate Japan is one of gradual evolution. While national anti-discrimination legislation specifically protecting LGBTQ+ individuals in employment is still absent, a combination of local government ordinances, emerging case law (particularly around harassment and facility access), and, significantly, proactive corporate initiatives are slowly driving change.

For U.S. companies operating in Japan, this means that relying solely on the current national legal minimums may not be sufficient to create a truly inclusive environment or to meet global corporate standards for diversity and inclusion. A proactive approach, informed by international best practices and a genuine commitment to equality, is essential. This involves not only understanding the legal nuances but also actively shaping a corporate culture where all employees, regardless of their sexual orientation or gender identity, feel respected, valued, and able to bring their whole selves to work. As societal awareness continues to grow in Japan, the expectations placed on businesses to be leaders in LGBTQ+ inclusion will likely only increase.