I think one of the reasons why we use contract employees is to be honest: we want to thoroughly evaluate the abilities and attitudes of our employees, and only promote those we are satisfied with to full-time positions. Therefore, when the contract period ends, you will have to choose between extending it, canceling it, or being promoted to a full-time employee. Regarding the appointment of full-time employees, new points have emerged that need to be considered in connection with the revisions to the Omnibus Act.

[How to calculate length of service]

Length of service is an important item that is often the basis for calculating employee rights. Period of service refers to the period during which an employee continues to have an employment relationship with the company, regardless of the type of employment. For example, let's say you initially signed a one-year contract as a contract employee, and after extending that contract for one year, you were promoted to a full-time employee. Let's say that the employee has been a full-time employee for three years and is then fired due to an absorption-type merger. In that case, the period of service will be a total of 5 years, 2 years as a contract employee and 3 years as a full-time employee. If you have worked for 5 years, you will receive 6 months' retirement allowance and 2 months' continuous service allowance. When the employment relationship ends due to an absorption-type merger, the retirement allowance and continuous service allowance are multiplied by 1, so the total amount of 8 months' wages will be the retirement allowance in that case. On the other hand, we already pay honorariums each time a contract employee's contract ends. In this case, even though the employee receives an honorarium of two months' wages, the contract period is also included in the calculation of retirement benefits.

[How to avoid duplicate payments]

Honorarium is different from retirement allowance, so it is possible that two types of payments will be made for the same period, but if you had been hired as a full-time employee from the beginning, you would not have been paid honorarium, so this is a bit unconvincing. Is it possible for the first two years to be paid only as honorarium or as retirement allowance?

What if we agreed in advance at the time of hiring that if you are promoted to a full-time employee, you will waive your right to receive compensation during the contract period? Article 15 of Cabinet Order No. 35 of 2021 states that ``the manager is obligated to pay honorarium.'' This is the obligation of management, so even if labor and management agree not to pay, it will be invalid under the law. Now, an agreement that ``the contract period is not included in the period of service'' could be considered, but this would also be invalid as it violates the definition set by law. The only way is to provide a blank period after the contract ends and hire a new employee as a full-time employee. A blank period means that the employment relationship is not continuous. However, the employee will not be working during the blank period, so you need to look at the business situation and explore possibilities.

Related legislation: Decree No. 35 of 2021 PP-35/2021