Covid-19 Legal Challenges
How do I manage the legal challenges of the global COVID-19 pandemic?
Many of us are facing unprecedented questions as we manage the many challenges of COVID-19. To address some of the legal challenges presented by the coronavirus, the ACCJ held a webinar on Monday, March 30.
The panel was moderated by Catherine O’Connell, Principal and Founder of Catherine O’Connell Law and Co-Chair of the Legal Services & IP Committee, and featured:
Chris Jacobson, Registered Foreign Lawyer, Fukuoka International Law Office
Takuo Misaki, Attorney at Law, Matsuda and Partners
Please note that the following information should not be taken as formal legal advice. Consult with a lawyer to better understand your situation and options under these circumstances.
Chris Jacobson, Registered Foreign Lawyer, Fukuoka International Law Office
Force majeure generally means a delay due to an “act of God” that impacts your timely performance of work under a contract.
Force majeure clauses may or may not be detailed or broad as a result of the jurisdiction you are in, and consequently affects the way the clause is interpreted. An important consideration is whether or not the event could have been foretold or foreseen.
Obligations affected by the coronavirus need to be commercially impractical or objectively impossible to be covered under force majeure in Japanese law. Japanese law operates under freedom of contract, which enforces the force majeure clause in commercial contracts and allows for special remedies. There has never been a case that directly addressed force majeure clauses, but common practice holds that the clauses will be enforced. Japanese interpretations of a contract clause tend to be very strict with a focus on explicit wording. In addition, force majeure clauses cannot be used in violation of your duty of good faith and anti-abuse regulations. Consumer protection rules may also apply, especially to protect small businesses.
If your contract does not have a force majeure clause, three basic principles you can fall back on.
The first is the rule of impossibility exemption, which exempts the service provider from breach of contract liability due to a reason not attributable to the breaching party and significant circumstantial change. The exemption releases a company from the obligation to perform if they can show the situation is objectively impossible and whether the situation is permanent. The latter can be difficult to prove, given that the pandemic will eventually end, and theoretically, the company can perform the work at a later date.
The second is an exemption of contract liability. This exemption does not cover payment of a monetary amount in that it does not necessarily fall under an impossibility aspect.
The third is the notification aspects of the agreement. Revisit these portions and discuss possible changes with the other party.
Takuo Misaki, Attorney at Law, Matsuda and Partners
These are my most frequently asked questions when it comes to labor law and the coronavirus.
Can I scan my employees’ temperature and require them to submit their personal data?
There are two issues at hand: the collection of personal information and labor laws.
The Japanese code or the Japanese Act on the Protection of Personal Information prohibits the collection of personal information if done in a fraudulent/improper way. Certain personal information, such as health records, require consent. The central question here is whether temperature scans are considered health records. There is room for interpretation, but it is recommended that an employee’s temperature be taken only after they have consented. Employers may encounter employees who do consent, which presents a different set of challenges.
In Japan, it is difficult to discipline or terminate employees due to misconduct. Under the current circumstances, the definition of misconduct may be flexible. It would be risky to discipline employees on the grounds of dissent alone, but it is not impossible.
The best course of action, however, is to secure consent from as many as your employees as possible. Most will be sensible enough to see temperature scans as a required safety measure.
What steps are required to shorten working hours or institute a work-from-home policy? What about temporarily changing employees’ roles during the crisis?
The decision to shorten an employee’s hours rests solely on the employer. An employer may also institute a work-from-home policy without amending contracts or working regulations unless the contract specifies an employee’s work location. Similar logic applies to role changes. Employers have the authority to ask employees to perform new or different work so long as it does contradict contracts or written agreements.
Can employees’ wages be lowered for shortened work hours? Am I required to pay their salary if I tell them “do not work?”
Under Japanese employment law, “no work, no pay” is a fundamental principle. However, some labor standards state an employer must pay 60% of wages if the absence from work is attributable to the employer. Japanese civil code has a similar statement but places no cap on the salary paid.
If the employee is asked to stay home or work less for reasons attributable to the employer, their salary cannot be reduced. Because the current situation is not as severe relative to other countries, any changes in work hours may be attributable to the employer. That line of reasoning may change if conditions worsen.
Can I treat contract, part-time, and full-time employees differently?
No, as there are no differences under the employment code. There may be differences when it comes to working hours based on the contract or working agreement.
Do I have to pay employees who stay home to take care of their children due to school closures?
Strictly speaking, an employee is not entitled to pay if the reason for their absence is personal or non-attributable to the employer. Again, “no work, no pay” is a standing practice. In light of the current challenges, it may be prudent to avoid refusing pay.
Question & Answer
Can employers measure their employees’ temperature with or without their knowledge or prior consent using technical means? Is the ability to scan temperatures in Japan based on an exemption under the Labor Standards Act?
If the temperature taken is considered a part of the employee’s health records, it is against the law to measure their temperature without their knowledge. If the scan is not considered a part of the employee’s health record, it may be possible to measure their temperature. The latter option comes with legal risks, so it is better to avoid it. Conducting temperature checks without knowledge or consent will cause negative emotional and psychological impacts on the workforce and may sow distrust within the company.
One alternative that involves technical means is placing overt, visible notices in public areas stating that temperature checks are being conducted with the equipment clearly visible. If the employee proceeds through the area or entrance, an employer may deduce that consent is implied.
Temperature checks have more to do with the aspect of personal information rather than the employment itself. In the case of coronavirus, labor law applies when dealing with employees who do not consent to temperature scans.
Additional information
There are new provisions to the Japanese civil code. Before April 1, it was understood that force majeure was not a reason for termination of a contract. Delays or other provisions were possible, but not termination. After April 1, termination of a contract is allowed under the impending civil code provisions.
