Is Disciplinary Action for Side Jobs Illegal? How to Protect Yourself by Learning from Past Labor Precedents Where Dismissal Was Deemed Unfair

Hello, I am Teppei Daikoku, a former corporate slave turned side-hustle consultant.

"My company forbids side jobs, so if I get caught, won't I be fired immediately...?"

Many people are interested in side jobs but are too intimidated by the words "disciplinary action" in their employment regulations to take the first step.

During my 25 years as a corporate slave, I also secretly worked on side jobs night after night, constantly chewing stomach medicine like breath mints, thinking, "If I get caught, it won't just be a matter of prostrating myself before my wife..."

But wait a minute.

In fact, there have been many cases in the past where a company was gung-ho about "forbidding side jobs" and fired an employee, only for the court to overturn the decision, saying, "No, no, that disciplinary action is illegal (invalid)."

Are you surprised that the company lost even though the employment regulations were violated?

In this article, I will unravel past labor precedents where employees were disciplined for having side jobs, and explain in an easy-to-understand way where the legal boundary lies between what is safe and what is not.

Does a company's "no side job rule" have absolute binding power in the first place?

"Since it's written in the employment regulations that side jobs are prohibited, it must be like an absolute law, right?" Many people assume this is the case.

However, there is not a single word in Japan's Labor Standards Act or any other law stating that "company employees must not have side jobs."

In fact, the basic stance of the law is that, in principle, private time outside of working hours is the worker's freedom.

A company can only restrict you during "working hours."

Whether you spend your time after work sleeping, going out for drinks, or earning money from another job, it should essentially be your personal freedom, right?

That is precisely why it is difficult for a company to legally justify (and highly likely for it to be ruled invalid) imposing a blanket ban on side jobs in its work rules—claiming "our employees are prohibited from side jobs 24/7, 365 days a year!"—and immediately issuing disciplinary action simply because that rule was violated.

Now, let's look at some past court cases where dismissal due to a side job was deemed unfair (invalid).

[Safe Cases] Precedents where dismissal for a side job was deemed "unfair (illegal)"

Looking at past precedents, there are many cases where the company's disciplinary action is overturned if it is proven that "there is no hindrance to the primary job."

A famous one is the "Tokyo Private University Professor Case" from 2008.

This was a case where a university professor was fired for disciplinary reasons after it was discovered that they were working a side job as a language school instructor without the university's permission.

However, the court pointed out that this side job was "conducted at night or on holidays, and no specific hindrance to the primary job was recognized."

As a result, the court ruled that the dismissal was invalid (illegal), stating that "even if it was done without permission, jumping straight to disciplinary dismissal is too severe."

A similar ruling was also issued in the "Towada Transport Case" in 2001.

In this case, an employee who worked a part-time job about once or twice a year was fired, but the dismissal was also ruled invalid for reasons such as "the frequency of the part-time job was low and it did not cause any hindrance to the primary job duties."

In other words, if you are in a state where you "do a little side work after your main job ends and still show up to your main job the next morning feeling refreshed," the "disciplinary action" sword that the company wields is highly likely to be blunt.

[Out Cases] Precedents where dismissal for a side job was deemed "justified"

It is still too early to feel relieved and think, "Oh, so I won't get fired even if I do a side job openly!"

Of course, there are also "out" precedents where the company's disciplinary action was recognized as "justified."

A prime example of this is the "Ogawa Construction Case" from 1982.

In this case, an employee of a construction company worked a side job as an accountant at a cabaret for about 11 months, every day from the evening until midnight for about 6 hours.

The court judged that "if you work for 6 hours every day until late at night, it is naturally highly likely that it will hinder your work performance at your primary job the next day."

As a result, it was concluded that the company's dismissal was valid (justified).

In this way, if there are clear negative impacts such as "constantly falling asleep during your main job due to lack of sleep" or "increased tardiness and absenteeism," the likelihood of receiving an immediate red card increases.

Furthermore, it is not just a matter of working hours; cases such as "stealing the company's customer list for use in a side job (information leakage)" or "working part-time for a competitor of your main employer (violation of non-compete obligation)" are also definitely out of bounds because they cause actual harm to the company.

Even if your time outside of work is your own, it means you must not do anything that would betray the company you work for.

Rather than fighting with legal precedents as your shield, acting wisely is the choice of an adult.

Having looked at past precedents so far, what do you think?

Perhaps just knowing the fact that "as long as it does not interfere with your main job, a company cannot fire an employee without cause" has made you feel a little lighter.

However, that does not mean it is a good idea to deliberately clash head-on with your company, thinking, "The precedents say I'm right!"

If it goes to court, it will cost both time and money, and above all, the mental stress will give you an ulcer (speaking from experience).

For us middle-aged salarymen, the wisest choice is to avoid unnecessary trouble with the company and quietly grow "your own business" without letting your performance in your main job drop.

To do that, you should absolutely avoid side jobs that are physically demanding, like late-night part-time work.

Starting with a blog affiliate program where you can work at your own pace and balance it with your main job without leaving yourself exhausted, or a small business that can be completed with just one computer, is the shortest path, even if it looks like a detour.

While riding on the big ship that is your company, quietly build your own personal lifeboat.

Why not start that shrewd adult survival strategy today?

【List of Information Sources】
・ Mynavi: "Is a Side Job Ban Actually Illegal? Is Dismissal Valid? A Lawyer Explains the Importance of Prior Confirmation Based on Precedents" https://tameni.mynavi.jp/career/4036/
・ Labor Issues & Corporate Legal Affairs Site: "Can You Fire an Employee Who Violated a Side Job Ban? Is 'You're Fired if You Have a Side Job' Illegal?" https://roudou-kigyou.com/fukugyou-choukai/
・ Administrative Scrivener Corporation Yoshimoto Office: "Can You Discipline an Employee Who Had a Side Job Without Permission? Explaining the Company's Response to Violations of Work Rules" https://office-yoshimoto.jp/working-visa/blog/archives/1740