2022On December 30, 2022, Cabinet Order No. 2 of 2022 (hereinafter referred to as the Replacement Cabinet Order) came into effect, and it states that Law No. 11 of 2020 (hereinafter referred to as the Job Creation Law) will be invalidated. On the other hand, the content of the replacement ordinance is not significantly different from Law No. 11 of 2020. However, changes have been made to the minimum wage calculation method and outsourcing. The next minimum wage will be announced around November 2023, and I think the basic laws and regulations have already been clarified, so there is no need to worry, but with regard to outsourcing, there is a possibility that new contracts or contract revisions may occur even at this point. Under such circumstances, what should be the basic law to respond?

[Application of alternative government ordinance]

The replacement ordinance has been in effect since December 30, 2022, so the Job Creation Act is currently invalid. On the other hand, substitute ordinances will become invalid unless they are approved by the first Diet session after they come into force. The bill is currently under deliberation in the Diet and has not yet been approved. Therefore, there is still a possibility that the replacement ordinance will be invalidated, in which case the Job Creation Act will become valid again. There is also the problem that even if the Job Creation Act becomes effective again, it must be amended by November 25, 2023 due to a Constitutional Court ruling. If amendments are not made, the Job Creation Act itself will become invalid. Strictly speaking, the current situation should be based on the alternative government ordinance, but given the instability of the future situation, it would be best to avoid making hasty changes.

[Businesses that can use outsourcing]

In such an uncertain situation, the Job Creation Act removes all restrictions on the types of work that can be used for outsourcing, meaning that outsourcing can be used for any type of work. On the other hand, the alternative government ordinance clearly states that the business in which it can be used will be restricted. However, implementation regulations specifying what kind of restrictions will be imposed have not yet been established. Therefore, there may be some restrictions, but we do not yet know for which tasks it should not be used. Many companies have started using outsourcing for manufacturing sites, warehouse work, input work, etc. in accordance with the revisions to the Employment Creation Act, and depending on when it started, it may be time to update it. Additionally, the minimum wage amount that will be applied in 2023 has been stipulated, so it may be necessary to revise the contract accordingly. On the other hand, since contract revisions and renewals are an opportunity to review, there is a possibility that a labor union that opposes the use of outsourcing may come forward and complain to the company that it is illegal because the alternative government ordinance restricts operations. I think the company will want to continue the contract until it is possible to continue it by responding by saying, ``If implementation rules are established and it is determined that this work cannot be outsourced, the contract will be terminated.'' Please be aware that this is a time when we must continue to closely monitor the applicability of laws and regulations.

Related laws and regulations: 2020 year law 11 No., 2022 Decree No. 2 Number