Reading Labor Precedents #447

【Business Partner Employee Case】 (Tokyo Dist. Ct., Mar. 9, R4, Labor Precedents 1272.66)

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　In this case, Company X is the plaintiff and Employee Y is the defendant, which is the reverse of many court cases. The company sought the return of the difference in salary between a general position and a regional-limited general position, arguing that Y should have only received the salary for a regional-limited general position since they were unable to transfer.
　The court upheld X's claim.

1. Work Rules
　What is the legal basis for a claim to return money that has already been paid? Here, it is the provisions of the work rules. These provisions state that if a general position employee refuses a transfer, they must return the salary difference retroactively for six months, and their status will be changed to a regional-limited general position or similar.
　Y argued that this was invalid because: (1) it violates the "principle of full payment" of wages (Article 24, Paragraph 1 of the Labor Standards Act), and (2) the work rule provision lacks "reasonableness" and is therefore invalid (Article 7, main clause of the Labor Contract Act).
　The court rejected both of these arguments. The key points are as follows:
　The reasons for not violating the "principle of full payment" are three-fold: (1) (though not explicitly pointed out) the reality of an employee who refuses a transfer is that of a regional-limited general position, and the purpose is to settle the account when they have received a salary that does not match that reality—in other words, to align the form with the reality when there is a discrepancy; (2) the amount is only 20,000 yen per month; and (3) Y could have avoided the claim for repayment if they had declared their inability to transfer themselves.
　What is particularly noteworthy here is (1).
　Although not explicitly stated, it recognizes the reasonableness of aligning reality when there is a discrepancy between form and reality. In labor law, when form and reality do not match, rules that match the reality are often applied, but in many cases, this is seen in situations where the disadvantageous position of the worker is being corrected. On the other hand, this judgment is noteworthy in that for a state where form and reality are mismatched (a state where a general position employee who should be able to transfer cannot), a rule that matches the reality (status and treatment as a regional-limited general position) was applied. This is because it can be evaluated as showing that the value judgment of "aligning with reality" can also be applied in situations that are disadvantageous to the worker.
　The reasons for the "reasonableness" include, in addition to (1) through (3): (4) the company adopts a personnel system that emphasizes job rotation from the perspective of preventing fraud and fostering generalists (this itself seems to be based on the evaluation that it is not unreasonable); (5) a 20,000 yen/month difference is set between general position employees and regional-limited general position employees to ensure both the employee's own choice and job rotation (this also seems to be based on the evaluation that it is not unreasonable); (6) the above provision was established to ensure fairness among employees for the sake of (5) (this also seems to be based on the evaluation that it is not unreasonable); (7) the scope of repayment is uniformly limited to six months because the circumstances are on the employee's side and unknown to the company (this also seems to be based on the evaluation that it is not unreasonable); and (8) it is a settlement, not compensation, etc.
　What is particularly noteworthy here is that (4) through (7), along with (1) through (3), are not viewed as separate elements, but rather their mutual relevance is considered, and the issue is treated as the design of the entire personnel system. It seems that the point is not that there is a "killer move" that makes everything okay, nor that one can simply stack several elements, but rather that it is organically linked and designed as a personnel system.

2. Practical Points
　This judgment also discusses the validity of the reassignment order (it was evaluated as valid).
　However, the fact that the validity of the underlying system design is carefully examined is a point that should be referred to in practice. I often see companies that are not proactive in developing their personnel systems based on the idea that as long as the operation is solid, it is fine, or that their company is still too small to build grand rules, and that employees will understand that point.
　It is true that companies that set up both transferable general positions and non-transferable general positions are of a certain size, and there are not that many companies that introduce similar systems.
　However, since there are many court cases that carefully examine the reasonableness of system design, as in this judgment, regarding system design for more basic parts, please consider supplementing reasonableness through system design rather than ensuring it only through individual operations.

※ We read labor precedents once a month at the JILA/Labor and Social Security Attorney study group (Tokyo, Osaka).

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