A Comparative Study on Dismissal Rules
in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal
2nd edition

NOP Kanharith

Nagoya University
CALE Books 5

A Comparative Study on Dismissal Rules in
Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

NOP Kanharith

Nagoya University
CALE Books 5iCenter for Asian Legal Exchange&
Graduate School of Law

Nagoya University
A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal
NOP Kanharith
Published March, 2014
Printed by
the Nagoya University Consumers’ Co-operative Association, Nagoya, Japan

Copyright © 2014
Center for Asian Legal Exchange&
Graduate School of Law
Nagoya University
All rights reserved. No part of this work may be reproduced copiedin any form or by any means without written permission of the publisher.
Furo-cho, Chikusa-ku, Nagoya 464-8601 JAPAN
Phone: +81(0)52-789-2325
Fax: +81(0)52-789-4902

Preface

This book is a comparative study of Japan and Cambodia centering on the issue ofjustifications for the legality of dismissal from work. It is a highly interesting piece of
research which examines the legal theories in conjunction with various relevant case studies
in each country.
I would like to draw attention to the important aspects of this study.
Firstly, this is a comparative study related to genuine cases in law. It draws on eighty
major cases involving precedents and decisions in Japanese law, and awards in Cambodianlaw. It analysis the background to each case and deduces the legal reasoning guiding theprecedent they set. This is the first time such a study has been attempted in regard to
Cambodian law. We are also given precise understandings of the complex cases fromJapanese law and provided with an accessible arrangement of judicial precedents. More thananything else, the study manages to use this analysis of precedents in Japanese law to help
sort out award precedents in Cambodian law. The research here has gone one step further
than previous research by overseas students which have been confined to comparisons oflegislative systems. The author was a student in the English-language stream at our School
but his high level of Japanese enabled him to read original Japanese law cases and tounderstand them accurately.
Secondly, in analyzing the legal theory behind dismissal laws, the discussion is not
limited to merely the implications of the wordings of statutory laws, but also looks at how
such laws function in reality as revealed through an examination of cases. And so, forexample, we can see how, in the Cambodian situation, an unjustly dismissed worker may, asa point of law, demand reinstatement as distinct from simple monetary settlement but also
how the arbitration committee will judge whether reinstatement is possible when the various
circumstances of the case have been looked at. The study presents strong theoretical critiquesof this. There are many such instances of analyses of actual conditions which would not be
obvious if only the provisions of the laws were to be considered.
Thirdly, the study goes beyond being merely an arrangement of case precedents andadds an analysis of core points in Japanese law which can only be understood by reading theoriginal texts in Japanese. For example, in the case of illegal dismissals, as with French law,
the employment contract is not considered to have been severed meaning that the worker canbe reinstated in their job. However, the study makes clear that in reality resolutions tend tobe through monetary compensation. Another example is how dismissal through illness are
difficult grounds for employers to use, so the study describes how there exists a system forsuspension and temporary retirement.
Fourthly, the justified grounds principle in Cambodian law and the abuse of the rightto dismiss principle in Japanese law are seen to function the same in reality as legal principles
through an analysis of various cases. Consequently it is possible to compare both legal
principles and with this understand that there are many points in an examination of Japanese
law that can act as suggestions for Cambodian law. The legal principles regarding dismissalsiare the same but in the case of Japan these were first shaped by precedents and afterwards
established in law (the 2003 Revised Labor Standards Act Article 18-2 and the 2007 Labor
Contract Act Article 16) whereas in Cambodia they were initially established in law inconnection with the ratification of ILO treaties, and afterwards became regulated throughawards by arbitration committees. This distinction is also deftly demonstrated.
Fifthly, the two legal principles are different, however, in the attention they give tosocial appropriateness. Japanese law offers important implications on this point. This is theoriginality of this study. The idea of separating the rational grounds for dismissal and its
social appropriateness has been little theorized in Japan but from the perspective ofCambodian law it is clear that separating the two like this is of significance. The writer has
acquired this insight through his research into comparative law.
I would like to express my gratitude towards the CALE Center for their successful
publication of this superb piece of research.

Hajime Wada
Professor at Nagoya University School of Law
February 2014ii

Acknowledgements
I am indebted to many people. First of all, I would like to express my sincere gratitude
to my academic supervisor, Professor WADA Hajime, for his considerable expertise,
excellent guidance, and encouragement since the first day I participated in his seminar. Hiscomments as well as guidance have provided me with an overall understanding on how to
conduct a legal research and to analyze the legal issue critically. Without his supervision, I
would have not been able to reach such a positive achievement.
Second, I would like to extend my profound thanks to Associate Professor NAKANO
Taeko, Associate Professor BENNETT Frank for their comprehensive lecture and guidanceon how to write a legal paper. My sincere gratitude is also extended to Associate Professor
OKUDA Saori who always encourages and advises me whenever I need help. I also would
like to thank professors and staffs of Graduate School of Law of Nagoya University for theirgenerosity in providing a good environment for both academic and daily life.
Third, my profound thanks go to the Government of Japan and the Ministry of
Education, Culture, Sports, Science and Technology (MEXT) of Japan for their financial
support during my study in Japan. This priceless support is very influential to my future
career, which more or less will contribute to the development of my country, Cambodia.
Fourth, I would like to thank Associate Professor KUONG Teilee who spent valuable
time to teach me and other Cambodian students to read Japanese legal documents. I am also
in debt to a kind assistance from Dr. HAP Phalthy, Mr. HEM Sras, Ms. POK Phearoun, and
Ms. NUTH Sotheavy in proofreading my dissertation.
Last, my thanks and love go to Miss PLANG Dara, my parents, siblings, and relatives
who always give me inspiration, encouragement, and the will to be ambitious.

NOP Kanharith
Nagoya, July 19, 2012

iii

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Table of Contents
Preface ............................................................................................................................................... i
Acknowledgements ....................................................................................................................... iii
Abbreviations and explanatory notes ...................................................................................... ⅷ
Abstract........................................................................................................................................... ⅸ
Introduction ..................................................................................................................................... 1
Reasons for protecting workers ............................................................................................... 1
Problem of the study .................................................................................................................. 3
Objective and scope .................................................................................................................... 6
Structure of dissertation ............................................................................................................ 7
Chapter 1: Rule of justified dismissal in Cambodia ............................................................... 9
Section 1: History of dismissal rules .................................................................................. 9
1. General overview of rules regarding dismissal.................................................................9
2. Development of dismissal rules in Cambodia................................................................. 10
2.1. Civil Code of 1920: Freedom of dismissal ................................................................. 10
2.2. Labor Code of 1972: Notice period and rule of valid reason ............................... 122.3. Labor Law of 1997: Notice period, prohibited dismissals, rule of valid reason .. 13
Section 2: Rules of dismissals ................................................................................................ 14
1. Notice period .................................................................................................................................. 14
2. Prohibited dismissals ................................................................................................................... 15
3. Rule of valid reason ..................................................................................................................... 18
Section 3: Determinants of valid reason ........................................................................ 19
1. Laws .................................................................................................................................................. 20
2. Internal work rule, collective agreement, employment contract ........................... 21
3. The rules of Arbitration Council .............................................................................................. 22
Section 4: Types of valid reasons .......................................................................................... 24
1. Reason relating to the aptitude of the worker ............................................................... 24
1.1. Dismissal due to capacity shortage .................................................................................. 25
1.2. Dismissal due to sickness or injuries .............................................................................. 25
2. Reason relating to behavior of the worker ...................................................................... 27
2.1. Dismissal on the ground of serious misconducts ........................................................ 29
2.2. Examples of rules of dismissal due to misconduct ..................................................... 32
2.2.1. Misappropriation, embezzlement, and fraud ......................................................... 32
2.2.2. Insult and assault ............................................................................................................ 33
2.2.3. Vandalism of company’s property ............................................................................ 34
2.2.4. Inciting other workers to commit serious offense ............................................... 34
2.2.5. Disobedience to the employer’s order ..................................................................... 35
3. Necessity of the operation of enterprise........................................................................... 36
3.1. Reasonable selection of workers ...................................................................................... 37iv

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

3.2. Employer’s obligation to consult with workers’ representatives ........................... 38
3.3. Employer’s obligation to notify a competent authority ............................................ 39
3.4. Employer’s obligation to suspend a layoff .................................................................... 39
3.5. Employer’s obligation to reemploy dismissed workers ............................................ 40
4. Burden of proof ............................................................................................................................. 40
Section 5: Remedies for unjustified dismissal ............................................................. 41
1. Monetary compensation ............................................................................................................. 41
1.1. Compensation for damages .............................................................................................. 41
1.2. Severance pay ......................................................................................................................... 42
1.3. Paid annual leave ................................................................................................................... 44
2. Reinstatement ................................................................................................................................. 45
2.1. Legal grounds for the claim of reinstatement ............................................................ 45
2.2. Conditions for reinstatement .............................................................................................. 48
3. Problem of remedies for economic dismissal................................................................. 50
Conclusion ................................................................................................................................. 51

Chapter 2: Rule of justified dismissal in Japan .................................................................... 53
Section 1: Dismissal rules in Japan .................................................................................. 53
1. Freedom of dismissal................................................................................................................... 53
2. Notification of dismissal ............................................................................................................ 54
3. Statutorily prohibited dismissals ......................................................................................... 56
3.1. Period of restricted dismissal ............................................................................................. 56
3.2. Dismissals with discriminatory grounds ........................................................................ 57
3.3. Report of violation or request for an inspection body ............................................... 57
3.4. Dismissal of whistleblower ................................................................................................ 58
3.5. Dismissal on grounds of marriage, pregnancy or childbirth ................................... 59
4. Rule of abuse of right .................................................................................................................. 60
4.1. Judge made rules restricting dismissals ......................................................................... 60
4.2. Incorporation of judicial rule into laws .......................................................................... 62
5. Certificate on occasion of retirement or dismissal ....................................................... 65
Section 2: Determinants of the abuse of right to dismissal..................................... 66
1. Laws .................................................................................................................................................. 66
2. Internal work rules, collective agreement, and employment contract ................ 66
3. Employment practice ................................................................................................................... 68
Section 3: Types of reasons for dismissal...................................................................... 70
1. Dismissal based on worker’s capacity ............................................................................... 71
1.1. Dismissal on grounds due to lack of capacity .............................................................. 71
1.1.1. Unusually low ability according to appropriate performance evaluation .... 71
1.1.2. Dismissal avoiding measures: possibility of education/training or transfer . 73
1.1.3. Dismissal of worker employed under special treatment for special
purposes .......................................................................................................................................... 73v

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

1.1.4. Dismissal of manager who cannot achieve what is written in employment
contract............................................................................................................................................. 75
1.1.5. Appropriateness of dismissal...................................................................................... 77
1.2. Dismissal due to illness ....................................................................................................... 78
1.2.1. Impossibility of work performance after expiration of work suspension .... 78
1.2.2. Possibility of returning to work incrementally ..................................................... 80
2. Dismissal due to worker’s misconduct .............................................................................. 83
2.1. Types of dismissals ............................................................................................................... 84
2.2. Rules for disciplinary dismissal ........................................................................................ 86
2.2.1. Existence of rules on disciplinary grounds ............................................................ 86
2.2.2. Analogical application of principles of criminal law in disciplinary
dismissal .......................................................................................................................................... 87
2.2.3. Type of disciplinary grounds in the rules of employment ................................ 88
2.2.4. Principle of appropriateness and equal treatment ................................................ 89
2.2.5. Compliance with reasonable procedures ................................................................ 91
2.3. Examples of rules of dismissal due to misconduct ..................................................... 91
2.3.1. Violation of company’s orders ................................................................................... 91
2.3.2. Negligence on duty and poor performance ............................................................ 94
2.3.3. Obstruction of service or business ............................................................................ 95
2.3.4. Personal background ..................................................................................................... 97
2.3.5. Using computer for private purpose...................................................................... 100
2.3.6. Crime or misconduct in private life....................................................................... 102
2.3.7. Working for another company................................................................................. 103
3. Necessity of the operation of the enterprise ................................................................ 104
3.1. Necessity of personnel reduction................................................................................... 106
3.2. Effort of dismissal avoidance ......................................................................................... 109
3.2.1. Acceptance of voluntary resignation .................................................................... 109
3.2.2. Transfer ........................................................................................................................... 111
3.3. Reasonable selection of workers ................................................................................... 112
3.3.1. Working results ............................................................................................................ 113
3.3.2. Age and length of service ......................................................................................... 114
3.3.3. Types of employment relation ................................................................................. 115
3.4. Appropriateness of procedure or duty of explanation and consultation ........... 115
3.5. Adjustment dismissals in the case of closure of a factory, branch, or section 116
Section 4: Remedies for unjustified dismissal ...........................................................118
1. Definition of invalid dismissal .............................................................................................. 118
2. Wages during dismissal ........................................................................................................... 118
3. Provisional disposition ............................................................................................................. 120
4. Dismissal and compensation for damage ...................................................................... 121
5. Severance pay ............................................................................................................................. 123
Conclusion ...............................................................................................................................124
Chapter 3: Comparison of the rules on justified dismissal ..............................................126
Section 1. Characteristics .....................................................................................................126vi

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

1. Existence or non-existence of right to dismissal ........................................................ 126
2. Abstract rules .............................................................................................................................. 126
Section 2. Merit and demerit (strength and weakness) .........................................129
1. The rule of valid reason: from legislation to practice .............................................. 129
2. The rule of abuse of right to dismissal: from practice to legislation ................. 130
3. Rules on dismissal due to worker’s aptitude ............................................................... 131
3.1. Worker’s capacity ............................................................................................................... 131
3.2. Sickness or injury ............................................................................................................... 132
4. Rules on dismissal due to worker’s behavior .............................................................. 133
5. Rules on dismissal due to the necessity of the company ........................................ 135
6. Remedies for unjustified dismissal .................................................................................. 136
Conclusion ...............................................................................................................................139

Chapter 4: Recommendations ................................................................................................141
Section 1: Introduction of abuse of right in dismissal ............................................141
1. Reasons for introducing the rule on abuse of right to dismissal to Cambodia 141
2. Legal ground (Abuse of right in Civil Code).................................................................. 143
Section 2: Content of rule of justified dismissal for Cambodia ...........................145
1. Dismissal due to worker’s aptitude ................................................................................. 145
2. Dismissal due to worker’s misconduct ........................................................................... 146
3. Dismissal due to necessity of enterprise ....................................................................... 146
Section 3: Remedies (modification of the abuse of right to dismissal).............147
1. Monetary compensation .......................................................................................................... 147
2. Reinstatement .............................................................................................................................. 150

Bibliography ...............................................................................................................................152

vii

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Abbreviations and explanatory notes

1. Abbreviations
AC: Arbitration Council
CBA: Collective bargaining agreement
ILO: International Labor Organization
MoU: Memorandum of Understanding
NSSF: National Social Security Fund
Prakas: Ministerial orders (proclamation)

2. Explanatory notes
Hanji: Hanrei Jiho （判例時報）
Minshu: Saikosai Minji Saibanreshu (最高裁民事裁判例集)
Rouhan: Roudou Hanrei （労働判例）
Roukeisoku: Roudou Keizai Hanrei Sokuhou （労働経済判例速報）
Rouminshu: Roudou Kankei Minji Saibanreishu （労働関係民事裁判例集）

viii

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Abstract

The rule of justified dismissal either in the form of valid reason or abuse of rights has
protected workers against unfair termination of employment by their employers. The rule ofvalid reason in Cambodia lacks comprehensive content. The rule was long a legislative rule
but has a short history of application due to the civil war from 1970 to 1993. While the courts
are passive in creating case law to fill in for the flaws in legislative rules, the Arbitration
Council has been developing many rules governing issues concerning dismissals. However,these arbitrator-made rules cannot provide a comprehensive approach to all cases of
dismissals. This is because the council deals only with collective labor disputes. The awardsof the council do not always bind employer and worker to enforcement. Though the council
has developed comprehensive rules for dismissal in cases of worker’s misconduct, it has yet
to establish rules for dismissal in the case of a worker’s lack of ability or in the case of
economic difficulties.
In contribution to the development of rules for justified dismissal in Cambodia, thisdissertation proposes contents for rules for dismissal based on the Japanese experience. In
Japan, the rules concerning abuse of right to dismissal consist in the requirement for the
existence of reasonable grounds and the appropriateness of dismissal. An examination of theapplication of the Arbitration Council shows that the rule of valid reason in Cambodia isbased on the existence of reasonable grounds while the requirement for appropriateness of
dismissal is not widely applied by arbitrators in all cases of dismissals. Moreover, there are
two kinds of remedies in the practice of collective labor disputes. The worker has the optionof monetary compensation as provided by the Labor Law or of reinstatement that is anotherremedy provided by the Arbitration Council in cases of dismissal without a valid reason.
In conjunction with an increase in companies in Cambodia that wish to maintaincontinuous employment relationships, there is a trend for the Arbitration Council to expand
the rule of valid reason far beyond the existence of valid reason in the case of dismissal due
to workers’ misconduct. With the aim of having consistent rules, this study suggests that therule of justified dismissal in Cambodia should consist of two main requirements: theexistence of a valid reason and the appropriateness of dismissal. This proposal would involve
introducing rules concerning the abuse of right to dismissal to be found in Japan to Cambodia.
Furthermore, based on the practice found in collective labor disputes, the remedy for unjustly
dismissed workers should be a choice of reinstatement or monetary compensation.

ix

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Introduction
The dismissal of an employee is a unilateral action on the part of an employer throughan expression of intention for the termination of an employment contract and a cancellationof future employment relations.1 In Japan, the issue of dismissal is called Kubikiri, whichliterally means “beheading.”2 However, in the field of labor and employment law, Kubikirirefers to the removal of workers from enterprises. Given that the term Kubikiri refers literally
to a form of death, the implication is that dismissal is a serious matter. In Cambodia too where
the income of a worker supports not only his or her life but also that of family members,3 thematter of dismissal also concerns lives and causes social and economic hardship to workers
and their dependents. Thus, Cambodia adopted the first Labor Code in 1972 and restricted
the employer’s freedom to discharge a worker without a valid reason.
The International Labor Organization’s Recommendation on Termination of
Employment in 1963 influenced the rule on justified dismissal in Cambodia through therequirement for the existence of a valid reason for discharge. Although there were subsequentchanges to the Labor Codes in line with social and political changes, the rules of valid reasonof the Labor Code in 1972 remained the foundation for the dismissal rules in the Labor Codein 1992 and the Labor Law in 1997.

Reasons for protecting workers
There are many reasons for supporting restrictions on an employer’s freedom toterminate the employment contract in accordance with the rules of justified dismissal. For
example, the rule of valid reason derives from the concept of the protection of the right tolife; and therefore, the employer originally does not have the right to dismiss the worker
freely.4 The Universal Declaration of Human Right of 1948 (Article 3), the Constitution of
Cambodia (Article 32), and the Constitution of Japan (Article 25) guarantee the right to life.
In Japan, the right to life in Article 25, the right to education in Article 26, the right to workin Article 27, and the right to association, the right to collective negotiation and the right toact collectively in Article 28 are called the fundamental rights of the right to life in generalterms.5
1

The following cases are not dismissals: the end of contract according to expiration of a set period andretirement age; the automatic cancellation of employment contract according to the expiration of the period ofwork suspension even where the worker wishes to continue the contract; the refusal to hire a person who
receives a “tentative decision to hire” and “employment stoppage” a worker whose short-term contract has
been repeatedly renewed (they are named as being dismissed) but they are not dismissed in the strict meaning.
瀧川誠男, 解雇の法理 Doctrine of Dismissal (東京: 労働法学出版, 1972), 11.
2池田直視, 解雇の法的問題 Legal Problem of Dismissal (京都: ミネルヴァ書房, 1976), 26.
3
Lejo Sibbel and Petra Borrmann, “Linking Trade with Labor Rights: The ILO Better Factories Cambodia
Project,” Arizona Journal of International and Comparative Law 24 (2007): 247–48.
4
池田, 解雇の法的問題, 56.
5Ibid., 190.

1

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

In addition, the requirement of a valid reason for dismissal is the realization of “theright to work, which relates to both access to and security of employment.” 6 Bothinternational and national laws have guaranteed the right to work. For example, the Universal
Declaration of Human Rights of 1948 states that “Everyone has the right to work, to freechoice of employment, to just and favorable conditions of work and to protection against
unemployment.” 7 Furthermore, the International Convention on Economic, Social andCultural Rights of 1966 recognized that “the right to work, which includes the right ofeveryone to the opportunity to gain his living by work which he freely chooses or accepts
and obliges the State Parties to take appropriate measure to safeguard this right.”8
The Constitution of Cambodia (Article 36, paragraph 1) recognizes and respects theright to work in general terms and that the people have a right to choose their occupations
suited to their ability according to the need of society. The Constitution of Japan (Article 27,
paragraph 1) reads, “All people shall have the right and the obligation to work.” In Japan,
there is an assumption that the protection of this constitutional right influences the legal
systems governing dismissal. The right to work means that the government has an obligation
to create and maintain an environment where workers have an opportunity to take a position
in a suitable job and to secure the livelihood of workers who lose this chance.9 In addition,
Article 27 protects the continuity of employment of the worker. Because employment isconnected to the worker’s personal well-being, the avoidance of unemployment for theprotection of workers’ livelihood in the situation of unemployment reflects the constitutional
value.10
Respect for individual dignity is another reason for protecting workers against
employer’s arbitrary dismissal. The Universal Declaration of Human Right (Article 1)
recognizes and reaffirms the respect for individual dignity. Moreover, the Constitution of
Cambodia (Article 38) and the Constitution of Japan (Article 13) also recognize the right todignity. The employer violates the worker’s right to dignity when he or she does not treat anindividual with “concern and respect.”11 A dismissal based on discrimination, discharge
without a cause, or the dismissal of the worker immediately without giving a chance for selfdefense against an employer’s allegation of misconduct are examples of employer’s violationon the dignity of individual. Hence, respect for individual dignity requires employers to havea valid reason and to abide by reasonable procedures when dismissing workers.12
Justification is the only requirement for the termination of employment contracts at theinitiative of employers, but not when initiated by workers since there is a different implicationof the rule that provides parties with equal right to termination of contract. 13 The rules
6

General Survey of the Reports Relating to the Termination of Employment Recommendation, 1963 (No.119),International Labor Conference 59th Session 1974 (Geneva: International Labor Office, 1974), 2, Geneva.
7
The Universal Declaration of Human Rights, art. 23, ¶ 1 (1948).
8
The International Convention on Economic, Social and Cultural Rights, art. 6, 1966.
9
Kazuo Sugeno, Japanese Employment and Labor Law, trans. Leo Kanowitz (Tokyo: University of Tokyo
Press, 2002), 16.
10
和田肇, 人権保障と労働法 Human Right Protection and Labor Law (東京: 日本評論社, 2008), 206.
11
Hugh Collins, Justice in Dismissal : the Law of Termination of Employment, Oxford monographs on labourlaw (New York: Oxford University Press, 1992), 16.
12
Ibid., 17.
13
Protection Against Unjustified Dismissal, International Labor Conference 82nd Session 1995 (Geneva:

2

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

governing termination of an employment contract in the nineteenth century were those basedon the principle of freedom of contract in the civil codes that allowed either an employer ora worker to unilaterally terminate their employment relations without taking care of a valid
reason.14 When examined carefully, an employer has much discretion in dismissal at any time
provided that he or she gives advance notice to the worker. Such a rule that provides equal
freedom for an employer to dismiss a worker and for a worker to resign has different
consequences. The consequences of the worker’s resignation merely makes it difficult for theemployer to find a replacement in the abundant labor market, while the consequence of
employer’s right to dismissal can cause social and economic hardship for the dismissed
worker and his or her dependents.15 The different implications of the right to end contracts
obliges the employer to show justification when terminating employment while there is norequirement of justification for termination when done at the initiative of the worker.16
The Constitution of Cambodia of 1993 states “The Kingdom of Cambodia shallrecognize and respect human rights as stipulated in the United Nations Charter, the Universal
Declaration of Human Rights, the covenants and conventions related to human rights,
women’s and children’s rights.”17 Accordingly, Cambodia has an obligation to realize theright to life, the right to work, and the right to dignity that are guaranteed by the Universal
Declaration of Human Rights, the International Convention on Economic, Social andCultural Rights. In addition, Cambodia has to respect the right to be dismissed with a valid
reason in the ILO Termination of Employment Convention (No. 158). As a result of thisconstitutional obligation, Cambodia adopted its Labor Law in 1997 that requires a dismissal
to take place only with a valid reason.

Problem of the study
The rule that requires a valid reason for a dismissal is abstract in content even though
it tries to categorize the reason as being related to the worker’s attitude or behavior, or to thenecessity of the enterprise. Consequently, there are many disputes over whether or not an
employer is dismissing a worker according to a valid reason. In such instances, in order topredict the possibility of winning the case, either party has to know the tendency of judges
in dealing with disputes through a review of their previous judgments.
Although there is no principle of stare decisis in countries for civil law systems as inInternational Labor Office, 1995), para. 2.
14
Article 1148 of the Cambodian Civil Code of 1920 allowed each party to terminate the contract at any timewith an obligation of eight-day prior notice. Article 627 (paragraph 1) of Japanese Civil Code of 1896
provides that “If the parties have not specified the term of employment, either party may request to terminate
at any time. In such cases, employment shall terminate on the expiration of two weeks from the day of therequest to terminate.”
15
Report VIII (1) Termination of Employment at the Initiative of Employer, International Labor Conference
67th Session 1981 (Geneva: International Labour Office, 1981), 6, Geneva.
16
The freedom of worker to leave a job freely is guaranteed by the Force Labor Convention (No. 29), 1930,
and the Abolition of Forced Labor Convention, (No.105), 1957. See General Survey of the Reports Relating
to the Termination of Employment Recommendation, 1963 (No.119), Paragraph 26.
17
The Constitution of Cambodia, art. 31, ¶ 1 (1993).

3

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Cambodia and Japan, there is an acceptance of previous judgments as the standard ofjurisdiction according to three points of view.18 The first viewpoint concerns how the court
treats similar cases fairly and equally, meaning that similar facts should have similar decision.
The second one is based on the stability of rule grounded on the expectation that the same
court should have the same rules for making decisions. The third one is that the courts shouldfind it convenient just to refer to the previous decision when there are similar facts.
In Cambodia, it is difficult for parties to find a court’s previous decisions for use as
reference to deal with the abstract rule of dismissal due to the following reasons. First, thelegislative rule on dismissal for a valid reason is old but has had a short history of application.
Though Cambodia adopted its first Labor Code in 1972 and provided workers with the rightto be protected from unfair dismissals in Article 70, application of this was impossible dueto the subsequent civil wars from 1975 until 1993 when Cambodia shifted its political systemfrom socialism to democracy with a market economy.19 The employer’s use of dismissal
started after there was an increase in foreign direct investment in Cambodia in the early 1990s.
In response to an increase in the importance of employment relations, the Royal Governmentof Cambodia enacted a new labor code in 1997.
Second, even though one can access the judgments of the courts, it is still difficult forto understand the court’s tendency in the interpretation of law. This is because most judges
are passive in interpreting laws or in making any judicial rule. The passiveness of judges
might be a result of the tradition and history of legal practice in Cambodia after the defeat of
the Pol Pot regime in 1979. If compared with judgments before Pol Pot regime came to power
in 1975, the present decisions lack a judge’s explanation or interpretation before applying thelaw to the fact.20 Historically, since the collapse of the Pol Pot Regime in 1979 until 1993,
Cambodia was ruled under socialism and judges were government officials whose duty was
to apply the laws supplemented by regulations made by the executive branch in resolving theconflicts.21 Additionally, the capacity for interpreting the law of judges after the subsequentcivil wars was another cause for this passiveness.
The workload of judges might be another cause of passiveness. The Labor Law (Article387) demands the establishment of a Labor Court to deal with individual disputes. However,such special court has never existed since the adoption of the Labor Law in 1997.
Consequently, ordinary courts are entrusted to resolve all kinds of disputes including labor
disputes.22 Because the number of judges was small to deal with all kinds of cases, a judge
had to deal with 1000 cases per year.23 In 2011, the number of judge increased, and there
18

The Constitution of Cambodia, art. 31, ¶ 1 (1993).
The Constitution of Cambodia, art. 56.
20
Kan Channmeta et al., Legal Methodologies: Khmer Law (Association for Khmer Law, 2006), 46. The
bulletin written by a group of Cambodian PhD candidates, judges, and other legal practitioners in 2006
examined the development of structures and contents of the judgment papers. It was revealed that judgments
after independence from France in 1953 consisted of explanation and interpretation of each legal rule before
applying it to the fact. In contrast, present day judgments (judgments made after the collapse of Pol Pot
Regime in 1979) have lacked legal reasoning and have mostly referred to the facts or claims of the parties.
21
Dolores A. Donovan, “Cambodia: Building a Legal System from Scratch,” International Lawyer (ABA) 27(1993): 450.
22
The Labor Law of Cambodia of 1997, art. 389 (1997).
23
Recommendations and Comments on the Draft Law on Juvenile Justice (European Commission and Unicef,2007), 111.
19

4

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

were 228 judges in the courts of first instance dealing with approximately 69,146 cases.
Hence, each judge had to deal with 300 cases on average per year.24 As a result, judges are
exhausted expending great effort on each case. If they spend too much time on a case, thisprocess can prolong the time for resolving the next waiting cases.
In addition, the passiveness of judges may be a result of an absence of legislation thatencourages judges to interpret or explain laws. For example, when there is conflict over theinterpretation of laws or the question of constitutionality, only the Constitutional Council25
has the right to a final say and not the courts, not even the Supreme Court.26 Only Article
143 of the Law on Criminal Procedure dated March 8, 1993 guided the judges about theelements that should be included in the criminal decision. However, there was no legislative
rule that demanded judges include reasons in civil judgment papers until the enactment of
the Code of Civil Procedure in 2006. 27 The implementation of this new Code of Civil
Procedure will allow parties in conflicts to see judges’ explanation or interpretation on
abstract laws before applying them in each case.
Third, the reason that leads to the lack of comprehensive content for the dismissal ruleis the matter concerning the function and effectiveness of the Arbitration Council. In 2003,
the Arbitration Council was established according to Chapter 12 of the Labor Law to deal
with labor disputes. This council is an institution consisting of arbitrators who are
representatives of employers, workers and government, and it deals only with collective labor
disputes. The council publishes its awards on a homepage where everyone can freely accessit.28 From May 2003 until December 2010, the council received 978 cases and issued 658
awards.29 Among the 658 awards, there were approximately 213 awards concerning disputes
related to dismissals.30 The review of these awards has shown that the decisions of Arbitration
Council are consistent with a comprehensive explanation. This is because when dealing withthe same kind of disputes with similar facts, the arbitrators often refer to the previous
decisions in covering the loopholes in laws.
However, the influence of the arbitrator-made rules on employment relations,especially the rule for dismissal remains questionable. First, the council has authority indealing only with collective, but not individual labor disputes.31 In order for the disputes tobe resolved by the Arbitration Council, the workers often attach the issue of dismissal ofindividual workers onto matters concerning collective labor disputes. In Cambodia, a dispute
24

Annual Report (Ministry of Justice, 2011). The average number of the cases a judge has to deal with isderived from the number of all kinds of cases divided by number of the judges in courts of first instance.
25
There are nine members in the Constructional Council. The King appoints three members, the Supreme
Council of Magistracy elects three other members, and the National Assembly elects the other three members.
Law on the Organization and the Functioning of the Constitutional Council and Law on the Amendment of
the Law on the Organization and the Functioning of the Constitutional Council, art. 3 new (1998).
26
The Constitution of Cambodia, chap. 10 (1993).
27
The Code of Civil Procedure of Cambodia of 2006, art. 189 (2006). The Code of Civil Procedure is the firstlegislative rule that requires judges to write down facts and points at issue, reasons, and the final decision in
their judgment papers.
28
The awards of the Arbitration Council are published via its homepage http://www.arbitrationcouncil.org/.
29
The Arbitration Council: Annual Report (2010) (The Arbitration Council, 2010), 12.
30
The number of awards on dismissal was counted after the review on each award issued from May 2003 to
December 2010. In 2011, there were 57 awards regarding dismissal.
31
Dismissals of individual workers are excluded from the collective disputes. [2008] Case no 13/08 (kh The
Arbitration Council, February 27, 2008); [2011] Case no 25/11(kh The Arbitration Council, March 18, 2011).

5

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

is collective one when it involves the participation of a union, and when the dispute affects
the operation of the enterprise concerned.32 In some cases, if the employers and workers haveagreed that a dispute is collective and it has been registered as a non-conciliated collective
one in the report of the Labor Inspector, then the dismissal of an individual can become thesubject of a collective labor dispute.33
Second, the arbitrator-made rules on the issues of dismissals are not sufficient toforesee the result of all categories of dismissals. According to the Labor Law (Article 74),
the grounds for dismissals are those relating to worker’s aptitude, worker’s misconduct, andthe necessity of the operation of the enterprise. Through the review of the awards of thecouncil, many cases of dismissals occurred in the garment sector, and they were mainly
concerned with dismissals on the ground of worker misconduct. As a result, the Arbitration
Council has developed comprehensive rules in cases of dismissal on the ground of worker’s
mistakes while it has yet to establish the rules for dismissal on grounds relating to worker’s
poor capacity or sickness, or the necessity for the operation of the enterprise.
Third, the awards of the Arbitration Council do not always have binding effects. There
was a Memorandum of Understanding in September 2010 among the unions and employer
associations in the garment sector to abide by the decision of the Arbitration Council for
disputes over rights (the disputes that concern the violation of the laws). However, the awards
still remain weak in enforcement in other sectors of employment relations that are not in thescope of this Memorandum of Understanding, such as hotels, restaurants, and beer companies.
In sum, Cambodia lacks comprehensive and consistent rules for resolving issues
concerning all kinds of dismissals due to the short history of the application of legislative
rules on dismissal, the passiveness of judges in legal interpretation, and due to questions overthe function and effect of the arbitrator-made rules. Accordingly, this dissertation conducts
the first mission in providing recommendations on the concrete content for the dismissal rules
in Cambodia.

Objective and scopeThis dissertation aims at providing recommendations on the content of rules onjustified dismissal in Cambodia through looking at the Japanese experience. In Japan, thelegislative rule for dismissal is also an abstract rule, but the courts play an important role inproviding comprehensive content through the creation of case law. After an examination ofthese detailed rules, the dissertation makes suggestion for the content of rules on justified
dismissal in Cambodia for the consideration of judges and arbitrators or persons in charge ofdispute resolution. In addition, the development of concrete and consistent rules is importantfor parties to the conflicts who wish for stable employment relations, rules and practices.
32

The workers who were members of unions and workers who were not members of unions filed complaints
against dismissals to the AC through a union. The union in the disputing company represented these workers
in the name of collective labor disputes. The AC accepted this claim as one of the dispute issues in thecollective dispute. See 10/10 (2010).
33[2012] Case no 70/12 (kh The Arbitration Council, May 10, 2012).

6

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

The study focuses only on drafting the content rules of dismissal, and it does not resolve
the problem of dispute resolution mechanisms or how to alter the attitude of courts inproviding reasoning when making a decision. The dissertation mainly discusses the rule ofjustification that applies to the relationship under employment contracts of unspecified
duration. Even though there are disputes over the employer’s renewal of fixed-term contracts,
the dissertation supports the interpretation of the Arbitration Council that the total durationof fixed-term contracts including their renewal cannot exceed the maximum period of two
years34. If a fixed-term contract is renewed for more than a period of two years, the contract
will automatically be converted into an unspecified duration contract. In this sense, the ruleof justification also applies to the case where an employer refuses to renew the contract or
terminate the contract of the worker where the duration of the fixed-term contract exceeds
two years.

Structure of dissertation
The content is comprehensive and consistent in order to realize the protection of theworker against arbitrary dismissal, to secure the consistency and stability of laws or legal
rules, and to stabilize employment relations. In order to develop the content for the dismissal
rules, Chapter 1 of the dissertation examines the development and problems of dismissal
rules in Cambodia. In particular, the study conducts a deep analysis of the legality of adismissal according to the rule that requires a valid reason relating to the worker’s poor
capacity, sickness or behavior, or the business needs of the enterprise. The research on
dismissal rules is based on a review and analysis of available court judgments and the awardsof the Arbitration Council. While the decisions of the Arbitration Council are consistent, its
rules are in the process of development. Since there are few judgments on dismissals
available, the awards of the council are used to understand the development and characteristicof dismissal rules in Cambodia.
Chapter 2 examines the rules of justified dismissal and their applications in Japan.
Japan helped Cambodia adopt the Code of Civil Procedure in 2006 and Civil Code in 2007.
Although Cambodia enacted the Labor Law in 1997, nine years before the Civil Code; therules in Civil Code that came into force in 2011 have had much influence on the interpretationof the articles in the Labor Law. One cannot deny the close relationship between the Civil
Code known as the general rule and the Labor Law known as the special rule.
Therefore, the study of the Japanese experience is interesting and useful for thedevelopment of the legal system of Cambodia. In order to understand the dismissal rules inJapan, one needs to not only read the text of laws but also refer to the judicial rules or judgemade rules. Hence, several selected judgments are used as models for analyzing the legality
or validity of dismissals. There are also many books and articles that contribute to thecomprehension of dismissal rules in Japan. This chapter also analyses the strengths andweaknesses of the dismissal protection rules in Japan.
34[2003] Case no 10/03 (kh The Arbitration Council, July 23, 2003).

7

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Chapter 3 looks at the two legal systems under a comparative method in order tohighlight the similarities, differences, strengths, and weaknesses. Finally, Chapter 4
concludes and provides suggestion for improvement of dismissal rules in Cambodia throughconsistent and concrete content.

8

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Chapter 1: Rule of justified dismissal in Cambodia
Section 1: History of dismissal rules
1. General overview of rules regarding dismissal
The principle of freedom of contract in the civil codes was a traditional rule thatprovided employers with much discretion in terminating a contract. The freedom of an
employer to dismiss an employee has been restricted by the internationally accepted conceptthat employment relations cannot be terminated unless there is a valid reason35. The rules ofjustified dismissal in various countries have been worded in a variety of terms, such as valid
reason, objective cause, specified serious reason, real and serious grounds, legitimate
grounds, justified, unreasonable, or rational reason36. However, though the rules are worded
in different terms, the national laws of an individual country have the same purpose in terms
of providing protection for workers against an employer’s arbitrary dismissal.
Until the adoption of the ILO Recommendation (No. 119) on the Termination of
Employment in 1963, there was no international standard demanding that a dismissal musttake place with justification even though a few countries provided workers with such a
protective mechanism 37 . The Mexican Constitution of 1917 required justification for
dismissal perhaps because it was adopted in the period where workers faced low employment
opportunities, low wages, and an absence of unemployment benefits or other protective
mechanisms for unemployed workers38. In 1920, Germany adopted the Work Council Act
that entitled the dismissed worker to report to a work council over a period of five days when
the dismissal took place without justified grounds39. The Russian Soviet Federative Socialist
Republic adopted the Labor Code in 1922, which required justification for dismissal40. Hence,
this Recommendation (No. 119) was the first international instrument that provided somefundamental protections to workers, such as the requirement for justification, a notice periodprior to dismissal, the right to appeal, compensation and income protection, and safeguards
35

R119 Termination of Employment Recommendation, 1963 (1963); C158 Termination of Employment
Convention, 1982 (1982); R166 Termination of Employment Recommendation, 1982 (1982).
36
General Survey of the Reports Relating to the Termination of Employment Recommendation, 1963
(No.119), Paragraph 29.
37
In 1950, the International Labor Conference through its resolution adopted in June 28, 1950 noted theabsence of international standard and requested the member countries to submit reports concerningtermination of individual contract of employment. See Record of Proceedings, International Labor
Conference 33th Session 1950 (Geneva: International Labor Office, 1951), 579, Geneva; General Survey of
the Reports Relating to the Termination of Employment Recommendation, 1963 (No.119), para. 2.
38
Arturo S. Bronstein, “Protection Against Unjustified Dismissal in Latin America,” International Labour
Review 129 (1990): 593. Article 123 (XXII), first sentence, provides “ Any employer who dismisses a worker
without justifiable cause or because he has entered an association or union, or having taking part in a lawful
strike, shall be required, at the election of the worker, either to fulfill contract or to identify him to the amountof three months’ wage.”
39
Work Council Act of Germany, art. 84 (1920).
40
Section 47 of Labor Code of Russian Soviet Federative Socialist Republic adopted in 1922 at Edward
Yemin, “Job Security: Influence of ILO Standards and Recent Trends,” International Labour Review 113(1976): 20.

9

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

for dealing with a reduction in the workforce.
According to the General Survey of the Report Relating to the Termination of
Employment Recommendation in 1974, the presence of the ILO Recommendation No. 119
in 1963 reflected an international understanding that the requirement of a valid reason wasneeded for the protection of workers against the economic and social hardship resulting fromthe loss of employment 41 . Recommendation No. 119 had much influence on theestablishment and revision of legislation in many countries. For example, in 1971, Britain
enacted the Industrial Relations Act to deal with unfair dismissal 42 . In 1972, Cambodia
adopted its first Labor Code where the dismissal rule is worded similarly to the rule given in
the Recommendation43. France adopted legislation on dismissal in 1973 (modified in 1989
and 1991) that required that dismissal to take place when there was a real serious cause (Labor
Code, Article L 122-4). 44
Since the concept of justified dismissal provides protection and job security as a partof the right to work, the Governing Body of the International Labor Office found that there
had to be an international instrument that was more appropriate than Recommendation No.
119 45 . Hence, the ILO Convention (No. 158) and ILO Recommendation (No.166) wereadopted in 1982 to replace the ILO Recommendation (No. 119). 46
2. Development of dismissal rules in Cambodia
2.1.Civil Code of 1920: Freedom of dismissal
In Cambodia, the principle of freedom of contract is also the basis of rules dealing with
contract termination. In the early 20th Century, Cambodia was primarily an agriculturalsociety. Custom or practice played an important role in governing employment relations47.
In 1920, Cambodia adopted its first Civil Code. Articles 1145 to 1176 were regulations
41

General Survey of the Reports Relating to the Termination of Employment Recommendation, 1963
(No.119), para. 3.
42Collins, Justice in Dismissal, 23.
43
Yemin, “Job Security,” 21.
44
Antonida Alibekova, ed., Employment Law, The Comparative law yearbook of international business(Alphen aan den Rijn: Kluwer Law International, 2007), 210.
45
In 1980 the Governing Body of International Labor Office requested the member states to reply and givecomments on the matter concerning the termination of employment at the initiative of the employer. Among
50 replying countries to question 1, 46 countries agreed to have a draft of the adoption of international
instrument. Among 49 replying countries to question 2, 25 selected the choice where the instrument had to bemade in form of Convention supplemented by a Recommendation. Report VIII (2) Termination of
Employment at the Initiative of the Employer, International Labor Conference 67th Session 1981 (Geneva:
International Labour Office, 1981), 4–6, Geneva.
46
Since the adoption of ILO Convention (No. 158) in 1982 until today, there were 35 countries that ratify andenforce this convention. See Termination of Employment Instruments, Background paper for the Tripartite
Meeting of Experts to Examine the Termination of Employment Convention, 1982 (No. 158), and theTermination of Employment Recommendation, 1982 (No. 166) (Geneva: International Labour Office, April
18, 2011), Appendix 1, Geneva.
47
There were rubber plants, family enterprise, and small factories inventing the crops or melting the rice.
Sitha Hang, Nitekanhea (Labor Law), 2005, 4.

10

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

dealing with labor relations under the contract for hiring of work or service. Article 1145
defined the hiring of work as a contract whereby one person, called a worker, an employee,
or a servant, was committed to work only for determined periods for another person, calleda “boss” or “employer,” in return for a price proportional to the agreed work, called a “salary”
or “wage.” Article 1147 demanded parties to conclude their contracts of hiring for service
only for a fixed period.
According to the current legislation in Cambodia and Japan, a fixed-term contract
normally ends at the arrival of the specified date in the contract, and the premature oftermination of a fixed-term contract is allowed only when there is an unavoidable cause or
serious misconduct by one of the parties. The Civil Code in 1920 (Article 1148) of Cambodia
provided each party with the freedom to reduce the length of the contract at will, provided
that notification took place eight days prior to the date of termination. This notice had to bemade before the commune chief (Article 1149). With the freedom of parties to reduce thelength of contracts, the old Civil Code accepted the freedom of termination while not favoringa long-term contract of hiring for service. The legislators in the 1920s did not favor longterm employment relations because they wanted to end the use of labor in the form of slavery,
which had been commonly practiced in Cambodia until there was Royal Decree of February
1, 1898 that abolished all forms of slavery in the whole country.
After France granted independence in 1953, Cambodia remained an agricultural society
until the years 1957-58 when the government started to realize the necessity of industrial
development and began increasing state-own and private enterprises48. In addition to theexisting laws concerning labor relations made during the French colonial period, 49 thedevelopment of labor law in the independent era was needed in order to govern the changeof employment relations at the time.
For example, in 1962, Marcel Clairon, who was a French attorney, wrote a book entitled“Droit Khmer: Droit du Travail” as a contribution to studies at universities in Cambodia50. In
this book, Clairon explained the types of employment contracts and rules of termination of
employment contract as follows. Employment contracts could be concluded for a fixed
duration or non-fixed term51. While fixed term contracts automatically ended on the arrivalof the specified date, the non-fixed term contracts ended at anytime according to the intentionof either party. Moreover, the right of unilateral termination in Article 1148 of the Cambodia’s
Civil Code of 1920 was likely to cause serious disadvantages, especially to a worker who
was dismissed untimely or arbitrarily; and therefore, prior notice was necessary for him or
her to find new employment. 52

48

Kimsok Ly, “Apercu sur le droit du travail au Cambodge” Overview on the Labor Law of Cambodia,
Annale de Factulte de Droit et des Sciences Economiques De Phnom Penh, 1997, 41.
49
In addition to the Civil Code of 1920, there were number of regulations concerning labor relations. For
example, these regulations were regulation of 1927 providing detail rules of contract work, regulation of laborof December 30, 1936 applying to labor relations among Indo-Chinese people; regulation of labor of February
24, 1937 applying to labor relations among European people; Royal Ordinance No. 84 N.S of May 20, 1938
expand the scope of labor relations to Cambodian people. The history of these regulations was located in the
preface of Labor Law made by H.E Suy Sem on October 25, 1998.
50
Ly, “Apercu sur le droit du travail au Cambodge,” 43.
51
Marcel Clairon, Droit Khmer: Droit Du Travail Khmer Law: Labor Law, 2nd ed. (Phnom Penh, 1962), 53.
52
Ibid., 56.

11

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

In addition, according to Clairon, investigation into the reason of termination allowed
the court to consider whether or not the termination constituted an abuse of right; and a party
who terminated the contract without just cause had to repair the damage caused to the otherparty53. An employer or a worker could carry out the abuse of the right to terminate thecontract. However, in practice, it was the employer who often terminated the contract
improperly. Therefore, Clarion suggested that there had to be a limitation on the rule ofunilateral termination of contract in Article 1148 of the Cambodia’s Civil Code through therequirement of a notice period and the requirement of the existence of valid reason.

2.2.Labor Code of 1972: Notice period and rule of valid reason
The decade of 1970s marked the period of the development of labor law in Cambodia.
For example, Cambodia became a member of the International Labor Organization according
to Kram (Law) No. 467/71 CE on April 7, 1971. The Ministry of Social Affairs and Labor
invited Clairon to help draft the Labor Code, and this draft became the first Labor Code in1972. The 1972 Labor Code introduced the employment contract of unspecified duration in
addition to the fixed-term employment contract. At the same time the code amended thesystem of prior notice and restricted the employer’s right to dismiss the worker through therequirement of the existence of a valid reason54. In contrast to the Civil Code of 1920, theLabor Code set the minimum standard of period for prior notice in accordance with the lengthof continuous service of the workers. The length of service subjected to the obligation of anotice period started from the period of continuous work less than or equal to three months
with a two-day notice period to the period of more than ten years with a three-month notice
period.55
Moreover, the Labor Code (Article 70, second paragraph) provided that “no layoff canbe taken without a valid reason relating to the worker’s aptitude or behavior, based on therequirements of the operation of the enterprise, establishment or group.” This law also
entitled workers the right to obtain compensation for any damage caused by an unjustified
dismissal 56 . When the Government of the Khmer Republic came to power by means ofmilitary force through the coup d’états in March 1970, there were great difficulties in theapplication of the Labor Code of 1972 due to social and political chaos.57
The collapse of the Khmer Republic in 1975 brought Cambodia into a genocidal regime
during which the legal system was completely destroyed. From April 17, 1975 to January 7,
1979, the Cambodian people suffered genocide under the Pol Pot regime, which had the rightto decide the life and death of everyone. During this regime, all of the pre-existing legal
systems were destroyed and those who were educated in law or other fields, such as teachersand medical doctors, were killed. The Civil Code of 1920 and Labor Code of 1972 were not
53

Ibid., 60.
The 1972 Labor Law in its Chapter 4 deals with the formation, suspension, and termination of employment
contract.
55
The Labor Code of Cambodia of 1972, art. 71 (1972).
56
Ibid., 87.
57
Hang, Nitekanhea (Labor Law), 7.
54

12

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

used during the Pol Pot regime.
After the collapse of the Pol Pot regime in 1979, Cambodia entered a period involving
the rebuilding of everything58. In 1988, the government of the Republic of Cambodian People
adopted Decree Law No. 38, concerning the contracts and liability for non-contract
misconduct. However, this decree did not regulate issues about employment contracts. The
absence of employment relations in the decree was the result of the fact that most of theenterprises or business belonged to the government and agriculture was performed in acollective form. Also, the employment relationship was performed under contracts of hiring
for work in small and medium enterprises. Thus, the rules in the Civil Code of 1920 remained
valid for the employment relations.
In 1992, Cambodia adopted another Labor Code when the government started tochange from a planned economy to a market economy granting citizens the full right topossess, use, and inherit the land in 1989.59 The government predicted that the change in thenational economy would lead to the establishment of private enterprises; therefore, it had topass laws to govern employment relationships in the private sectors60. Because the Labor
Code of 1992 was a replica of the Code of 1972, the Code of 1992 (Article 70) also required
a valid reason to accompany a dismissal.

2.3.Labor Law of 1997: Notice period, prohibited dismissals, rule of valid reason
The present Labor Code of Cambodia is called “the Labor Law” and this term shall be
used in this dissertation. From 1979 until the Paris Peace Agreement in 1992, Cambodia’s
political system was based on socialism with a planned economy. Consequently, even though
Cambodia had the second Labor Code in 1992, the implementation of this Code was notimportant. The adoption of the Cambodian Constitution in 1993 transformed its centrally
planned economy into a market economy. The political change attracted foreign direct
investment in the export-oriented garment factories. In 1994, many garment producers from
Hong Kong, Taiwan, Malaysia and Singapore started to operate businesses in Cambodia when
there were no restrictions on the quantity of exports from Cambodia into the US market.61
In response to the transition from socialism to democracy and to the increase offactories in Cambodia, the Ministry of Social Affairs, Labor and Veteran Affair drafted a new
Labor Code with assistance from the International Labor Organization (ILO), the French
Ministry of Labor, and the Asian American Free Trade Institution (AAFLI). The draft of the58

Donovan, “Cambodia.”
Directive on the implementation of policy on management and use of land, No. 03 SNN (1989).
60
Hang, Nitekanhea (Labor Law), 8.
61
In 1974, many developed countries such as the United States, the European Union, Canada and Norway
adopted Multi-Fiber Agreement to restrict the export of textile and garment products from developing
countries that were active producers of garment products. MFA is a bilateral agreement and has discriminatory
basis. In 1995, WTO Agreement on Textiles and Clothing (ATC) replaced MFA with a period of 10 years forthis transition and ended MFA by January 1, 2005. See Omar Bargawi, Cambodia’s Garment Industry –Origins and Future Prospects, Economic and Statistics Analysis Unit Working Paper 13 (London: Overseas
Development Institute, October 2005), 5, London.
59

13

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

new code primarily was based on the existing Labor Code in 1992 to adjust with the newConstitution of 1993. The rule that requires dismissal with a valid reason is one of themechanisms that materializes the protection of right to life as guaranteed in Article 32,
paragraph 1 of the Constitution. In addition, Article 37, paragraph 2 provides that the law
prohibits all physical abuse of any individual. The law protects the life, honor and dignity of
citizens. Therefore, the principle of individual dignity requires an employer to treat thedismissal of a worker with concern and respect. Based on the protection of the right to life andthe right to dignity in the Constitution, the rule that requires a valid reason for a dismissal wasagain included in the new Labor Law.
Cambodia adopted a new Civil Code in 2007 that came into force in 2011, 14 years
after the adoption of the Labor Law of 1997. Even though the general law (the Civil Code)existed after the special law (the Labor Law), the rules of the Civil Code have much influenceon the interpretation of rules in the Labor Law. The Civil Code resolves some defects orloopholes in the Labor Law of 1997. For example, the code defines the employment contract,
demands employers to show exact working conditions, and obliges the employer to have aduty of consideration for the safety of workers, and regulates about the absoluteness of personin the employment contract.62 The other issues of employment and labor relations are still
under the umbrella of the Labor Law of 1997.63 Therefore, the Labor Law of 1997 governs
issues regarding dismissal.

Section 2: Rules of dismissals
According to the Labor Law, an employer cannot unilaterally terminate theemployment contract unless he or she has a valid reason and notifies the worker in a certain
period prior to the dismissal.64 Regarding a dismissal, the employer should also be aware of
a set of prohibited dismissal grounds in the Labor Law. In addition, the employer has to know
other rules on dismissal in the Labor Law and other ministerial orders. Hence, there are
examinations of the rule of prior notice and of the prohibited dismissals before theexamination of the rules of valid reason.

1. Notice period
Article 74 (first paragraph) of the Labor Law allows either party to voluntarily terminate
the contract but obligates the party who intends to initiate the termination to notify the otherparty. The period of prior notice aims at preparing either the employer or worker to be readyfor contract termination. Article 75 has set the minimum period of prior notice based on the
62

The Cambodia Civil Code of 2007, arts. 664 to 667 (2007).
Ibid., art. 668.
64
[2006] Case no 07/06 (kh The Arbitration Council, February 17, 2006); [2006] Case no 09/06 (kh The
Arbitration Council, March 09, 2006); [2006] Case no 24/06 (kh The Arbitration Council, April 11, 2006).
63

14

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

length of the continuous employment of the workers:
1) Seven days, if the worker’s length of continuous service is less than six months;
2) Fifteen days, if the worker’s length of continuous service is more than six months
to two years;3) One month, if the worker’s length of continuous service is longer than two years
and up to five years;
4) Two months, if the worker’s length of continuous service is longer than five years
and up to ten years; and
5) Three months, if the worker’s length of continuous service is longer than ten years.
Accordingly, workers are protected from seven days at a minimum up to longest
maximum period of three months in response to the length of their continuous service. In
order to guarantee that there is no employer’s unilateral reduction of this minimum period, theLabor Law (Article 76) invalidates any clause in an employment contract, any internal work
rule, or of any individual agreement that provides for the period of prior notice to be less thanthe period set by Article 75.
The Labor Law does not mention about the possibility of the employer reducing thisminimum period or paying compensation in lieu of prior notice. The employer’s violation of
the obligation of prior notice entitles the worker to compensation equal to amount of wages
and all the benefits the worker would have received during the notice period.65 For example,
if the employer did not inform the workers who had worked for the company for eight years,
then the employer would have to inform the workers two months prior to the dismissal. Since
the employer paid half the salary for the two months after the dismissal, he or she also haveto pay them one month as compensation. The compensation for each month is the averagesalary that is calculated in a formula that divides the total wages including overtime wage
and bonus that the dismissed worker received during the 12 months prior to dismissal by 12.66
The Labor Law (Article 82) releases the employer from the obligation of prior noticefor the following conditions: (1) a probation period or an internship specified in the contract,(2) a serious offense by the worker, and (3) acts of God that make it impossible for theemployer to notify the workers. The list of serious misconducts is specified in Article 83-B
and exempts the employer from the obligation to provide the worker with the prior notice
period. In addition to serious misconducts in Article 83-B, there are various serious
misconducts in other articles of the Labor Law and in clauses in internal work rules of thecompany. A detailed discussion of serious misconduct is provided in the discussion on
dismissal based on the worker’s behavior in this chapter.

2. Prohibited dismissals
First, the Labor Law and ministerial order (Prakas) have forbidden employers fromdismissing workers on grounds relating to discrimination. According to Article 12 of theLabor Law, race, color, sex, creed, religion, political opinion, social origin, or membership of65
66

The Labor Law of Cambodia of 1997, art. 77 (1997).
[2004] Case no 51/04 (kh The Arbitration Council, July 22, 2004).

15

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

a workers’ union or the exercise of union activities cannot become a ground for dismissal.
Article 279 emphasizes the protection of worker’s collective rights through the prohibitionof dismissal for reasons related to union affiliation or participation in union activities.67 A
worker who claims that a dismissal took place due to discrimination has the burden of proof.68
Second, a dismissal of a protected worker and of the worker during the protective
period can only take place if there is an approval from the Labor Inspector. The system that
requires approval from the Labor Inspector protects workers from employer’s discrimination
against activities carried out by workers for the sake of a union. A shop steward is a protected
worker. Article 293, paragraph 1 of the Labor Law requires employers to receive approval
from the Labor Inspector for the dismissal of a shop steward, a candidate for shop steward,
or a former shop steward during three months after the end of their mandate, and an unelectedcandidate during the three months after the announcement of the voting result.69 The Labor
Inspector has the duty to investigate and decide to approve or deny the request of an employer
concerning the dismissal of the shop steward at least one month after being informed of thefiring.70 In addition, according to Article 282, shop stewards who resign from their position
for less than six months are also protected by the requirement for the approval of the Labor
Inspector.
The category of protected workers also includes three other union positions, namely
union president, union vice president, and union secretary whose dismissals can take place
only with an authorization from the Labor Inspector.71 Clause 3, paragraph 3 of Prakas No.
305 of the Ministry of Social Affairs, Labor and Veteran Affairs in 2001 stipulated that all
workers who are candidates for election of the union leader receive dismissal protection thesame as the shop steward. This protection is provided for 45 days before the election and for
45 days after the election if these candidates are not elected. The labor union has to informthe employer about this candidacy by all available means. The employer applies this rule inevery election of union leaders.
The union founders are also protected workers. Clause 4, paragraph 1 of the same
Prakas No.305 rules that from the outset of registration for the establishment of the union, allworkers who are founders or workers who voluntarily register as members of unions during
the registration process also receive the same protection as shop stewards. This protection
67

The employer dismissed two workers who were not members of a union’s leadership but were activists of
the union. The Arbitration Council found the dismissal was taken on the ground of discrimination against theexercise of union activities and ordered reinstatement in the case of employer’s violation on Article 12 andArticle 279 of Labor Law. See [2010] Case no 10/10 (kh The Arbitration Council, February 16, 2010).
68[2008] Case no 108/08 (kh The Arbitration Council, September 17, 2008); [2009] Case no 41/09 (kh The
Arbitration Council, April 22, 2009); [2010] Case no 16/10 (kh The Arbitration Council, March 09, 2010).
69
Even though the worker received a series of warning letter that was enough for dismissal, the dismissal was
illegal if there was no approval from the Labor Inspector. See [2009] Case no 146/09 (kh The Arbitration
Council, November 16, 2009).
70

See the interpretation of this article in [2008] Case no 149/08 (kh The Arbitration Council, December 19, 2008); [2010]
Case no 09/10 (kh The Arbitration Council, February 15, 2010); The Labor Law of Cambodia of 1997, art. 293, ¶ 2.
71
Three union leaders have to be protected under Article 293 of the Labor Law as well. Union leaders who are protected
are the union president, union vice president and union secretary. Prakas No. 313 SKBY on the Roles and Duties of Shop
Stewards and Unions, Clause 7 (2000).

16

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

covers a duration of 30 days following the date the registration of the union has been
completed. When there is dispute as to whether or not a worker can receive special protection
against dismissal, the Arbitration Council interprets Clause 3 and 4 of the Prakas No. 305 asfollows: a worker cannot receive special protection against dismissal unless he or she has met
three conditions. First, the worker is in the category of those who receive special protection;
second, the dismissal takes place during the period of special protection; and third, the unionmust inform the employer by all official means about the candidacy of the worker who mustreceive protection.72
Moreover, the Labor Law prohibits the employer from dismissing women workers on
the ground of pregnancy. According to Article 182 of the Labor Law, the employer isprohibited from dismissing women workers during their maternity leave or at the date whenthe end of the notice period would fall during the maternity leave.
A dismissal of these protected workers on the grounds of the expiry of a fixed-term
contract rather than on the basis of discrimination by the employer does not require approval
from the Labor Inspector. In the case of 34/05 in 2005, the employer notified the workers
who were union leaders about the non-renewal of their employment contracts, which meant
the termination of the contracts. Article 293 of the Labor Law requires employers to have theapproval of the Labor Inspector in case of the dismissal of protected workers (union leaders),
but there is no such requirement in the case of the expiry of the fixed-term contracts of these
protected workers (union leaders).73
The approval of the Labor Inspector does not always legalize the dismissal. In otherwords, this approval does not deter the Arbitration Council in considering whether or notthere is a valid reason accompanying the dismissal. In the case of 91/04 in 2004, the employer
dismissed a union leader with the approval of the Labor Inspector. The Arbitration Council
ruled that the approval of the Labor Inspector was a mechanism like immunity given to themembers of the National Assembly or of the Senate, and protected union leaders or shop
stewards from discrimination and abuse from the employer.74 In this case, when there waspermission from the Labor Inspector to carry out a dismissal, then the union leaders lost
immunity (the protection that required approval of Labor Inspector for dismissal) and become
normal workers. The dismissal in this case had to fulfill the rule that required a valid reason
in Article 74. Therefore, the request for permission from the Labor Inspector is just aprocedural requirement that protects persons who are representatives of the interests of theworkers against discrimination or unfair treatment.

72[2006] Case no 07/06 (kh The Arbitration Council, February 17, 2006); [2006] Case no 09/06 (kh The Arbitration
Council, March 09, 2006); [2008] Case no 148/07 (kh The Arbitration Council, February 11, 2008); [2009] Case no 71/09(kh The Arbitration Council, July 16, 2009); [2010] Case no 09/10 (kh The Arbitration Council, February 15, 2010).
73
34/05 (The Arbitration Council 2005).
74[2004] Case no 91/04 (kh The Arbitration Council, November 22, 2004); [2006] Case no 96/06 (kh The Arbitration
Council, November 24, 2006).

17

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

3. Rule of valid reason
The rule of valid reason in the present Labor Law was enacted in 1997 as a replica of
the rule in the Labor Code of 1992. The Labor Code of 1992 is also a copy of the Labor Codeof 1972. From this connection, the rule in the Labor Code of 1972 is the foundation of therule of valid reason in the Labor Law of 1997. The Labor Code of 1972, particularly Article
70, stated that there was no dismissal to be taken without “a valid reason relating to theworker’s aptitude or behavior, based on the requirements of the operation of the enterprise,establishment or group.”75 The above rule is worded similarly to the standard rule set in
Paragraph 2 (1) of the ILO Termination of Employment Recommendation (No. 119) of 1963
that reads, “Termination of employment should not take place unless there is a valid reason
for such termination connected with the capacity or conduct of the worker or based on theoperational requirements of the undertaking, establishment or service.”76
In order to understand the nature of the rule of justification for dismissal in Cambodia,
the dissertation examines the history of the drafting of the Recommendation (No. 119). In
order to draft this recommendation, the Governing Body of the International Labor Office inNovember 1960 requested the member states of the ILO to provide answers and comments
to questions from the office. Questions five and six were the main points leading to theexpression of Paragraph 2 (1) because they dealt with the existence of justification for
termination and the reason constituted that justification. Question five stated “Should the
instrument state that no dismissal should take place unless there is a valid reason for suchdismissal based on the interest of the undertaking?”77 And Question six posited, “ (1) Should
the instrument give examples of reasons which might justify dismissal, such as incompetence,physical or mental incapacity, negligence, violation of works rules and other breaches of
discipline? (2) Should any other examples be included?”78
The comments from member states of the ILO about question five concerned theexpression “valid reason for such a dismissal based on the interest of the undertaking” which
was seen as unclear, and also dealt with the need to add some elements such as the interestsof the worker or person or the conduct of the workers. 79 Regarding question six, theInternational Labor Office observed that member states had a strong tendency to reject theinclusion of examples of valid reason in the recommendation because many states feared thatenumeration of examples denied other reasons that were not listed in the clause ofrecommendation.80 In addition, those member states were concerned that listing too many
examples of the justification would be too elaborative while listing a few examples mightlead to arbitrary dismissal.81 In the end, there was no listing of examples of justification andthe expression of “…based on the interest of the undertaking” was replaced by expression“… connected with the capacity or conduct of the worker or based on the operational
requirements of the undertaking.”
75

The Labor Code of Cambodia of 1972, art. 70, ¶ 2 (1972).
R119 Termination of Employment Recommendation, 1963, ¶ 2 (1) (1963).
77
Report VII (2) Termination of Employment (Dismissal and Lay-Off), International Labour Conference 46th Session
1962 (Geneva: International Labour Office, 1962), 43, Geneva.
78
Ibid., 48.
79
Ibid., 185.
80
Ibid., 186.
81
Ibid.
76

18

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Therefore, instead of listing the example of reasons for dismissal, the expression of“…connected with the capacity or conduct of the worker or based on the operational
requirements of the undertaking” was used which demonstrated the general types ofjustification for dismissal that was again upheld by the adoption of the Convention on
Termination of Employment (No. 158) in 1982.82 After observing the practice and laws ofmember states, the Office concluded:
The reasons generally held to justify termination by the employer, although formulated
in varying degrees of generality or specificity and in varying ways in different countries,
do fall within the general categories of reasons mentioned in this question (which is
identical in working to Paragraph 2 (1) of Recommendation No. 119), that is, reasonsconcern to the capacity or conduct of the worker or the operational requirements of theundertaking, establishment or service.83
The Recommendation and Convention express the rule of the justification in generalterms and leave the duty in defining and interpreting what constitutes a valid reason tonational laws, collective agreements, work rules, arbitration, court, or other means
appropriate to the practice of each national law and practice.84
The rule of dismissal can only demonstrate the general categories of reason for
dismissal, as such there is a failure on the part of the rule to define or list justifications. There
are two main reasons for such a weakness in defining the valid reason for dismissal.85 First,
all the reasons for dismissal cannot be listed due to the differing types of work. Second, sincea real case of dismissal may not fall into the reason enumerated in the law, a detailed
definition may sometimes restrict the discretion of the courts or arbitration in protecting theworkers. Therefore, the definition of valid reason is decided by the courts or arbitration basedon the real case. In this respect, in some countries where judges or arbitrators have longexperience of this rule, the task in interpreting or defining the valid reason is achieved easily.
However, judges and arbitrators in Cambodia, where the history of application of the rulesof justification is short, find it hard to fulfill the task of defining the valid reason.

Section 3: Determinants of valid reason
The Labor Law requires a valid reason for a dismissal. Instead of defining what
constitutes a valid reason for dismissal, the Labor Law enumerates three main categories ofvalid reason, namely reason related to aptitude, misconduct, and the necessity of theenterprise. Even though, the type of grounds can be classified, there are disputes over whether
or not a justification given by an employer constitutes a valid reason for dismissal. For
82
The employment of a worker shall not be terminated unless there is a valid reason for such a requirement connectedwith the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment orservice. C158 Termination of Employment Convention, 1982, art. 4 (1982).
83

Report VIII (2) Termination of Employment at the Initiative of the Employer, 33.
R119 Termination of Employment Recommendation, 1963, ¶ 2(2) (1963).
85
Yemin, “Job Security,” 25–26.
84

19

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

example, in a case where a worker breaks a fan in the company, this might be classified as
an action of misconduct. However, whether or not such misconduct constitutes a reasonableground for dismissal remains controversial among parties to employment relations and otherlegal practitioners in Cambodia. There is also a question concerning indicators that determine
whether a ground is justifiable for dismissal. These determinants are laws, internal work rule,
collective agreement, and individual agreement in employment contracts. In addition, areview of the court’s decisions and the Arbitration Council’s awards provides acomprehensive understanding of the characteristics of the rules of justification.
1. Laws
Laws play an important role in determining whether a justification given by an
employer is a valid reason for dismissal. Laws, in this context, not only mean the legal texts
adopted by the legislative branch but also refer to rules adopted by the executive branch, inparticular ministerial orders called Prakas, which are the legal grounds for resolving disputes
over dismissals. In Cambodia, the executive branch, the ministries, are active in issuing the
Prakas to accompany the legislative rules. This is because it is a tradition of legislation thatin the law, there are clauses that entitle the involving ministry the right to make detailed rulesin the form of Prakas.
For example, Chapter 12 of the Labor Law deals with labor disputes. Section 2 of thischapter deals with collective labor disputes, which are resolved through reconciliation andarbitration. Article 317 in this section reads, “The Ministry in Charge of Labor shall issue a
Prakas (ministerial order) to determine the mode of enforcement of the present section.”
Accordingly, the Ministry of Social Affairs, Labor and Veteran Affairs issued Prakas No. 317
SKBY of November 29, 2001 on the procedure of collective disputes resolution, Prakas No.
099 SKBY of April 21, 2004 on the Arbitration Council, and other relevant ministerial orders
dealing with labor disputes.
In addition to the Labor Law and the two ministerial orders above, there are someministerial orders that often become the reference for resolving the issue of dismissals. For
instance, Prakas No. 313 SKBY of November 27, 2000 concerned the roles and duties ofshop stewards and unions, and Prakas No. 305 SKBY of November 22, 2001 dealt with therepresentativeness of professional organizations among the workers at the enterprise andestablishment level, and the right in collective negotiation for the conclusion of collective
agreement at enterprise and establishment level. These are rules dealing with the dismissalof worker’s representatives who are protected workers. However, there is no ministerial orderthat directly deals with the issue of the dismissal of an ordinary worker who is not includedin the list of protected workers.
There are other laws that have indirect influence over the rule of valid reason. Before
the enforcement of the Civil Code in 2011, Decree Law No. 38 of 1989 dealing with contracts
and liability for non-contract misconduct was the general rule for interpreting an employment
contract. The Arbitration Council often used this Decree Law when dealing with labor
disputes. After the Civil Code came into force and replaced this Decree Law No. 38, theArbitration Council applied the rules of the Civil Code, in addition to the rules in the Labor

20

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Law in order to resolve labor conflicts in case 63/12 in 2012.86
Moreover, judges or arbitrators in Cambodia are meant to interpret the articles in the
Labor Law and other ministerial orders according to the principles of the Constitution. In
addition to the guarantee of the right to life, the right to work, the right to organize, bargain
and to act collectively, and the right to equal treatment against any form of discrimination,
the Constitution of Cambodia respects a worker’s right to be dismissed only with a valid
reason in the ILO’s Convention on Employment Termination adopted in 1982. Article 31 (1)of the Constitution of Cambodia provides, “The Kingdom of Cambodia shall recognize andrespect human rights as stipulated in the United Nations Charter, the Universal Declarationof Human Rights, the covenants and conventions related to human rights, women’s andchildren’s rights.” Accordingly, even though Cambodia is not a country ratifying thisconvention, the interpretation of the Labor Law must be in compliance with the rule andpurpose of the ILO Convention.

2. Internal work rule, collective agreement, employment contract
When there is no law and ministerial order to deal directly with the issue of valid reason
in disputes over dismissals, the Arbitration Council refers to the rules of employment ofcompanies, collective agreements, and employment contracts. The internal work rules ofcompanies play an important role in providing rules concerning the issue of dismissals. The
Labor Law (Article 22) requires an employer who is currently employing at least eight
workers to draw up an internal work rule.
According to Article 23 of the Labor Law, this internal work rule applies the generalprovisions in accordance with the type of enterprise and the collective agreements relevantto the real activities or nature of the enterprise or establishment. The employer must include
rules relating to the conditions of hiring, the calculation and payment of wages andperquisites, benefits in kind, working hours, breaks and holiday, notice periods, health andsafety measures for workers, the obligations of workers and sanctions.
The internal work rule is drawn up or changed by the manager of the enterprise after
consultation with the worker’s representatives (their consent is not needed)87 and comes into
effect after the Labor Inspector approves its legality. 88 The internal work rule is not anagreement between employer and workers; therefore, an employer does not have to ask foragreement from the workers when setting the rules in the companies.89 An employer should
use his or her right of management in a reasonable scope.
In order to enforce the internal work rule, the employer has to notify workers about thecontents of this internal work rule by locating it in the workplace where workers can access

86[2012] Case no 63/12 (kh The Arbitration Council, April 30, 2012).
[2006] Case no 63/06 (kh The Arbitration Council, August 16, 2006).
88
The Labor Law of Cambodia of 1997, art. 24 (1997).
89[2012] Case no 63/12 (kh The Arbitration Council, April 30, 2012).
87

21

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

it easily.90 Since the employer is the one who sets up the internal work rule that includes
worker’s obligation and sanctions, the employer must abide by this rule when taking any
disciplinary measure such as dismissals.91 The failure to follow the procedures in the internal
work rule will make a dismissal illegal.

3. The rules of Arbitration Council
The present Labor Law, particularly Chapter 17, requires the government to establish
a Labor Court to deal with labor disputes. However, since 1997 right until the present, theLabor Court has not been established due to the “weak institutional structures of thegovernment overall, the Ministry of Labor in particular, and lack of political will.”92 In 2003,
the Arbitration Council was established under the ILO’s project to deal with labor disputes
as a responsive measure for the failure of the establishment of Labor Court. The power of
Arbitration Council in resolving disputes derives from the Labor Law and the Prakas No.
338 of December 11, 2002 that was nullified by Prakas No. 099 SKBY of April 21, 2004 on
the Arbitration Council. In this sense, the Arbitration Council has authority dealing only withthose collective labor disputes that cannot be reconciled by the Department of Labor Disputes,
Ministry of Labor and Vocational Training. The Arbitration Council is known for its
comprehensive and reasonable decisions and plays an important role in developing the rules
for employment practice in Cambodia. The International Labor Organization views the
Arbitration Council in Cambodia as “a major landmark in the development of sound labour
relations in Cambodia.”93
The Labor Law and ministerial orders do not automatically compel the parties of the
dispute to abide by the awards of the Arbitration Council. An award becomes a binding one
when there is a written agreement between the parties or a collective agreement that contains
a clause that requires parties to abide by the award.94 In addition, even though there is noagreement between the parties, a non-binding award can also become a binding one wheneither party fails to appeal this award to the Ministry of Labor and Vocational Training ineight working days.95 If one of the parties makes an appeal, then it will deter the effect of theaward.
The Economic Institute of Cambodia (EIC) conducted a study to enable the Arbitration
Council Foundation and the Arbitration to understand and evaluate the effectiveness of these
services for workers and employers. Regarding the effectiveness of the awards, this study
found that even though an award was a non-binding one, the award became the ground or
90

The Labor Law of Cambodia of 1997, art. 29.
[2005] Case no 64/05 (kh The Arbitration Council, November 30, 2005) 05.
92
Sibbel and Borrmann, “Linking Trade with Labor Rights,” 246.
93
“Freedom of Association in Practice: Lessons Learned. Global Report Under the Follow-up to the ILO
Declaration on Fundamental Principles and Rights at Work. Report of the Director-General, 2008,” Report,
May 1, 2008, Paragraph 294, http://www.ilo.org/global/publications/ilo-bookstore/orderonline/books/WCMS_096122/lang--en/index.htm (accessed June 01, 2012).
94
Prakas No. 099 SKBY on the Arbitration Council, Clause 42 (2004).
95
The Labor Law of Cambodia of 1997, arts. 313–14; Prakas No. 099 SKBY on the Arbitration Council,
Clauses 40–41.
91

22

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

supportive document for further discussion and negotiation among the parties, for decisions
in courts, or for strike or lockout.96 In addition, employers and workers in the garment sector
are committed to abide by the awards of the Arbitration Council. In September 28, 2010, a
Memorandum of Understanding (MoU) on Improving Industrial Relations in the Garment
Industry was drawn up to bind the parties of the award of the Arbitration Council on the labor
disputes over right (disputes over the right and obligation, or benefit in laws), but not interest(the disputes over the benefit that is not provided in laws). For example, point six of the MoU
read:
In the absence of a CBA, the parties shall agree to use the national dispute procedure
and accept, where the mediation is unable to resolve the issue, binding arbitration forrights disputes. The parties also agree to follow the dispute resolution procedures andnot resort to strike or lockout during the process. Where an arbitration decision on
dispute of right is given, the employer and workers and their representatives accept thatthe decision is final and binding on them. Where a party fails to honor the agreement,
then strike or lockout shall be available as a last resort. 97
According to this MoU, even though the award was not a binding one, both employers
and workers were strongly committed to abide by the award of the Arbitration Council, andstrikes or lockouts were used as an implementation mechanism against the violation of thiscommitment. In January 21, 2011, there was a meeting among 70 legal practitioners including
arbitrators, judges and prosecutors to discuss on how to improve labor relations through acall for cooperation between arbitration and the courts.98 On the one hand, the Minister ofJustice, based on the spirit of the MoU, gave a recommendation that arbitrators, judges andprosecutors cooperate to enforce the final decisions of the Arbitration Council that were notbinding. On the other hand, regardless of the scope of this MoU, the meeting also called forcooperation from the court on the enforcement of the binding award of the Arbitration
Council when one of the parties did not abide by the award.
After the MoU was signed in September 28, 2010 and came into effect in January 1,
2011, the Arbitration Council found that employers and workers agreed to abide by theawards in the cases covered by the MoU.99 The compliance with the awards of the Arbitration
Council reflects that employers and workers have trust in the decisions as well as judgment of96

Final Report: Baseline Study for the Arbitration Council Foundation (ACF) (Phnom Penh: Economic
Institute of Cambodia (EIC), August 2010), 106, Phnom Penh.
97“Memorandum of Understanding on Improving Industrial Relations in the Garment Industry,” September
28, 2010. It is a four-page document consisting of principles and commitments by employers and workers,
and it covers on the side of employers, current and future member of the Garment Manufacturers Associationin Cambodia. It covers on the side of unions, confederation and federations that have signed this MoU, andtheir current and future affiliates at the federation and enterprise level. It was signed by representative ofGarment Manufacturer Association of Cambodia and representative of 6 trade unions in Cambodia.
98“News and Updates on Industrial Relations and Labor Dispute Resolution in Cambodia,” The Arbitration
Council Newsletter, January-March 2011, 2011.
99“Memorandum of Understanding on Improving Industrial Relations in the Garment Industry and Binding
Arbitration,” The Arbitration Council E-Newsletter, January 2011; “Memorandum of Understanding on
Improving Industrial Relations in the Garment Industry and Binding Arbitration,” The Arbitration Council ENewsletter, February 2011; “Memorandum of Understanding on Improving Industrial Relations in theGarment Industry and Binding Arbitration,” The Arbitration Council E-Newsletter, March 2011.

23

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Arbitration Council.100 In addition, according to the Annual Report 2011 of the Arbitration
Council, the Kampot Provincial Court and Appeal Court upheld the decision of the
Arbitration Council in case 22/11.101 In this case, the dismissal of workers who attended thestrike was illegal as it violated Article 333 of the Labor Law, and the employer had to reinstatethem to their previous workplace and pay lost wages.102 The fact that the courts enforced thedecisions of the Arbitration Council was another recent development showing theeffectiveness and the influence of the council on employment practice in Cambodia. Because
the dispute over dismissal is a dispute over the right that is guaranteed by Article 74 of theLabor Law, the award of the council binds employers to abide by the decision according to
the spirit of the MoU.
Since the Arbitration Council plays an important role in developing employment
practices in Cambodia, this dissertation uses the awards of the council as primary materials
to understand the development of dismissal rules in Cambodia. The available judgments arealso used though there are only a few, and the contents lack explanation on the legal rules
before applying them to the facts.

Section 4: Types of valid reasons
The Labor Law categorizes valid reasons for dismissal into three types relating to theworker’s aptitude, the worker’s behavior, and the necessity of the company. These three typesof valid reasons have different rules according to the nature and characteristic of each reason.
This section examines the rules governing these three types of valid reason.

1. Reason relating to the aptitude of the worker
The aptitude of a worker can constitute a valid reason for dismissal. The aptitude
according to the Labor Law is called Sampatear and refers to a worker’s capacity or ability
to perform a duty. In general, if the worker cannot perform the duties in the employment
contract because his capacity is poor or his skill is out-of-date or because he is sick or has an
unrelated work injury, then the employer can terminate the contract unilaterally. The
following is an examination of the rules of dismissal relating to a worker’s aptitude, inparticular, what kind of situations or conditions constitutes reasonable grounds for discharge.

100“News and Updates on Industrial Relations and Labor Dispute Resolution in Cambodia,” The Arbitration
Council Newsletter, July-September 2010, 2010.
101
The Arbitration Council: Annual Report (2011) (The Arbitration Council, 2011), 5.
102[2011] Case no 22/11 (kh The Arbitration Council, March 21, 2011).

24

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

1.1. Dismissal due to capacity shortage
A worker’s ability or skill might decrease or be out-of-date after a long period of time.
In addition, when a worker does not have any more ability or any skill required to performthe task in the employment contract, it is proper that the employer uses this as grounds for
dismissal. The Labor Law, ministerial orders, and most of the internal work rules ofcompanies do not regulate the conditions or rules of dismissal on grounds relating to the lackof capability of the workers. There are disputes over the degree of poor capacity or shortageof skills that a worker may have which could become valid grounds leading to dismissal. In
the 55/08 case, the employer dismissed a worker on the grounds of slow performance and theperson was less productive compared to that of other workers. Arbitrator-made rules meantthat the dismissal was made without valid reason because the employer did not explain themeasures used to evaluate a worker’s ability; for examples the difference in quantity andspeed of performance between the dismissed worker and the other workers.103
In Cambodia, a review of the awards of Arbitration Council reveals that employers
often use poor ability to accuse workers of carelessness leading to slow production.
Carelessness or negligence means misconduct while having poor skill alone does notconstitute misconduct. Even though employers consider poor capacity as a mistake, thisground cannot lead to dismissal when the Labor Law and the rules of employment do notstate that poor capacity is a case of serious misconduct. In the 73/06 case, the employer
dismissed 15 workers alleging that they worked so carelessly and slowly that they could notsatisfy the requirements and needs of the company from the day they started their work until
the day of dismissal. In this case, working slowly was not serious misconduct in the Labor
Law or internal work rules of the company, and the employer could not use disciplinarily
dismissal against the workers.104
The majority of collective labor disputes occurred in the garment sector, which
accounted for 92 percent of all the disputes resolved by the Arbitration Council.105 In the
manufacturing industry which uses intensive labor supply such as garment factories in
Cambodia, even an unskilled person can work on a production line after he or she hasreceived training. It is difficult for employers to dismiss workers by asserting the grounds ofpoor capacity. Consequently, employers use poor capacity in the form of the assertion that
mistakes were made in order to dismiss the workers.

1.2. Dismissal due to sickness or injuries
In Cambodia, there are no provisions in the Labor Law or other ministerial orders that
explicitly prohibit employers from the dismissal of a worker who is sick or injured due toprivate reasons or of a worker who is sick or injured due to work. The Labor Law (Article
103[2008] Case no 55/08 (kh The Arbitration Council, May 20, 2008).
[2006] Case no 73/06 (kh The Arbitration Council, September 18, 2006).
105
The Arbitration Council: Annual Report (2010).
104

25

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

89, paragraph 4) grants the worker the right to indemnity106 when a dismissal occurs due tothe health of the concerned workers. However, the Labor Law fails to explain clearly theseriousness of the condition of a worker’s health that can lead to dismissal. The ILO
Convention on Termination of Employment, particularly Article 6 (1) provides, “Temporary
absence from work because of illness or injury shall not constitute a valid reason for
termination.”107 The temporary absence does not affect the worker’s capacity in the supplyof labor, except for a long period of absence, or repeated short-term absence due to illness.108
Hence, the Labor Law (Article 71) establishes a system for the suspension of an employment
contract in the case of a worker’s temporary absence from duty. The employment relation is
maintained during the employment contract suspension; however, the worker does not haveto work, and the employer does not have to pay wages.109
According to Article 71, the suspension of an employment contract is allowed
according to the following, “[(3)] the absence of the worker for illness certified by a qualified
doctor. This absence is limited to six months, but can, however, be extended until there is a
replacement...(4) the period of disability resulting from a work-related accident or
occupational illness.”110 Article 71 (Point 3) explains that a worker’s absence may be due toprivate illness or illness that is out of the scope of occupational sickness or injury. This private
sickness is not one of the reasons for contract suspension unless a qualified doctor certifies
it as an illness. In addition, the maximum period for suspension is limited to six months but
can be extended until there is a replacement. In the case of dismissal, the employer candismiss the worker when he or she cannot resume duties after the expiration of this six-month
period of work suspension. The exception occurs after this period, if there is no replacement,
the employer cannot discharge the worker.
According to a review of the awards, there seems to have been no case where there wasan extension of the period of work suspension on the condition of the availability of
replacement because employers often can find another worker to replace the sick worker forthe sake of business operations. The Arbitration Council in many cases refers to the internal
work rules of each company. In compliance with Article 23, which demands an employer
regulate rules on health and safety measures, the Labor Inspector has authority to approve
the legality of rules of employment made as models or samples that provide benefits as wellas protection for sick or injured workers for a certain period. For example, the internal work
rules of a hotel provide that:
An employee taking leave because of sickness certified by a State hospital is paid 100%of wage for the first month, 60% for the 2nd and 3rd month and if his leave exceeds
three months the employer has no obligation to pay any wages to employee. However,
the employer cannot terminate the employment contract during the six months of sick106

Dismissal indemnity refers to amount of money the employer gives to the dismissed worker. Except for
dismissal on the ground of serious misconduct, the employer has to provide this indemnity to the worker
without considering whether a dismissal is taken with or without valid reason.
107
C158 Termination of Employment Convention, 1982, art. 6 (1) (1982).
108
Report VIII (2) Termination of Employment at the Initiative of the Employer, 38–40.
109
Suspension of employment contract affects only the main duties of workers and the employer. This means
the worker does have to work and the employer does not have to pay the wage. See The Labor Law of
Cambodia of 1997, art. 72 (1997).
110
Ibid., art. 71.

26

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

leave.111
This rule of employment protects the sick worker from dismissal during the maximum
period of six months. In addition, the internal work rule of a garment factory (Point 7 ofArticle 4) also regulates that “If the employee is sick for more than six months, the company
will apply the Labor Law to lay the worker off.”112 According to the work rules of thecompany, the sick worker is protected for the maximum period of six months. If the worker
cannot recover and come to work for the company after this period, the employer canterminate the contract.
The worker’s temporary disability due to occupational disease or injuries is also a
reason for the suspension of an employment contract. In case of work-related accidents ordisease, the Labor Law makes employers liable for all work-related accidents (Article 249)
and also requires the government to establish the National Social Security Fund (NSSF) torun a general insurance system obligatory for work-related accidents (Article 256). In 2007,
the NFFS was created under a Sub-Decree on the Establishment of National Social Security
Fund in reference to Labor Law 1997, Law on Social Security Fund, and Persons Coveredby the Provision of Labor Law in 2002. According to the Prakas on Benefit of Occupational
Risks in 2008, an employer with at least eight workers has to register with the NFFS in orderto provide the benefits or compensation accruing on those occasions when there are workrelated accidents or illnesses that fall upon the workers.
As with the Labor Law, the Prakas on Benefit of Occupational Risks is silent on
prohibiting the employer the right to terminate a contract during the period of disability.
Clause 7 of the Prakas on Benefit of Occupational Risks entitles the workers to daily
severance pay for temporary loss of working ability within 180 days at the latest (6 months).
This Prakas puts the responsibility of compensation on the NFFS while it fails to mention
the relationship between the employer and the effected workers.
According to the system for the suspension of employment contracts in Article 71 (4)of the Labor Law, the employer has to maintain the status of the worker during the period ofwork suspension. However, there is no specification for the period of work suspension in thecase of work-related accidents or occupational disease. Based on the Prakas on Benefit ofOccupational Risks, the worker receives daily severance pay for the period of six months.
Therefore, the absence due to work-related accident or sickness for temporary loss of theworking ability becomes a valid reason for dismissal when it exceeds the period of six months.

2. Reason relating to behavior of the worker
Worker’s misconduct may become grounds for various disciplinary actions, namely averbal warning, written warning, suspension of employment contract without wages, andfinally dismissal. The Labor Law provides some rules governing the disciplinary measuresused on workers. These rules are as follows: the rule for the extinction of the employer’s right111
112[2004] Case no 29/03 (kh The Arbitration Council, February 02, 2004).
[2004] Case no 62/04 (kh The Arbitration Council, September 09, 2004).

27

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

to disciplinary action in Article 26, the rule for proportionality between misconduct anddisciplinary sanction in Article 27, and the rule of prohibition of double punishment on thesame misconduct (double jeopardy) in Article 28.
An employer can lose the right to take disciplinary action against a worker when he or
she does not take action in time. Article 26 of the Labor Law provides that:
An employer cannot impose disciplinary action against a worker for any misconductof which the employer or one of his representatives has been aware for over fifteen
days…The employer shall be considered to renounce his right to dismiss a worker forserious misconduct if this action is not taken within a period of seven days from thedate on which he has learned about the serious misconduct in question.113
When applying this rule in the case of dismissal, the employer loses the right to fire theworker on the grounds of serious misconduct when he or she does not take action withinseven working days.114 The conditions concerning serious misconduct are discussed latter.
The employer has to use disciplinary action properly. Article 27 of the Labor Law
stipulates, “Any disciplinary sanction must be proportional to the seriousness of the
misconduct. The Labor Inspector is empowered to control this proportionality.” Because
dismissal on the grounds of misconduct is a disciplinary measure, the proof that such anaction is proportional or relevant to the magnitude of the seriousness of misconduct
constitutes a valid reason required by Article 74.115 Article 27 authorizes the Labor Inspector
to check the proportionality of any disciplinary punishment.
Article 293 of the Labor Law requires dismissals of worker’s representatives to takeplace only after the employer receives approval from the Labor Inspector. In this respect, theLabor Inspector has the important duty of checking whether or not the dismissal is
proportional to the misconduct of these protected workers. However, there appears to be nocase where the Labor Inspector decides the proportionality in the case of the dismissal ofordinary workers. Since the proportionality of dismissal is not easily defined even by the
Labor Inspector, Article 393, paragraph 3, entitles workers who reject the decision of theLabor Inspector to appeal to the Minister of Labor and Vocational Training.116
In addition, the approval of the Labor Inspector of the dismissal of protected workers
does not deter the Arbitration Council from considering the proportionality that constitutes avalid reason for dismissal. When resolving disputes, the council also plays an important rolein checking the proportionality of disciplinary sanctions. The Labor Law does not clearlymention the criteria for the evaluation of this proportionality; however, the examination of
the awards of the council has provided some standard rules to judge the legality of thedismissals. The proportionality is recognized when the employer dismisses the worker
according to serious misconducts listed in the Labor Law, the internal work rules of thecompanies, or according to considerations of the worker’s intention or motives and theemployer’s equal treatment.
113

The Labor Law of Cambodia of 1997, art. 26.
[2004] Case no 27/04 (kh The Arbitration Council, June 16, 2004).
115[2005] Case no 59/05 (kh The Arbitration Council, October 27, 2005).
116
The Labor Law of Cambodia of 1997, art. 393, ¶ 3.
114

28

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

The employer cannot use double punishment for the same misconduct of a worker.
Article 28 of the Labor Law reads, “The employer is prohibited from imposing fines ordouble sanctions for the same misconduct. By fine is meant any measure that reduces the
remuneration normally paid for the work performed.”117 In addition, regardless of whether
or not a worker commits the same misconduct, the Arbitration Council upholds a decision of
the employer that uses a history of disciplinary measures on the worker for a particularmisconduct as grounds for consideration of the next disciplinary sanction when that worker
commits another misconduct. According to the Arbitration Council in the 76/05 case,misconduct was subject to serious sanction when a worker kept repeating the same problem
after there was series of warnings and other punishments.118 Therefore, in a case where theworker has already received a punishment, and then commits the same offence again, eventhough it is subject to ordinary disciplinary sanction, the employer can dismiss the worker
instead of applying disciplinary sanctions on the worker.

2.1. Dismissal on the ground of serious misconducts
The worker’s misconduct cannot become grounds for disciplinary dismissal unless themagnitude of such a mistake is serious. The nature of serious misconduct is not defined, but
instances are listed in the Labor Law, the rules of employment of the companies, andarbitrator-made rules. The Labor Law enumerates serious misconduct by workers in Article
83-B as follows:
1. Stealing, misappropriation, embezzlement;
2. Fraudulent acts committed at the time of signing (presentation of false
documentation) or during employment (sabotage, refusal to comply with the terms of
the employment contract, divulging professional confidentiality);
3. Serious infractions of disciplinary, safety, and health regulations;4. Threat, abusive language or assault against the employer or other workers;
5. Inciting other workers to commit serious offenses; and6. Political propaganda, activities or demonstrations in the establishment.119
In addition to Article 83-B, the Labor Law demonstrates serious misconduct as follows.
In the procedures prior to a strike in Article 326, if a worker who is appointed to manage aminimum service in order to protect the facility installations and equipment of the enterprise,then he or she is considered to have committed serious misconduct when he or she fails toprovide this service during the period of the strike.120 Moreover, according to Article 328,
when a worker who is assigned to provide essential services and does not turn up for suchwork during the strike; such conduct is also a serious offence.121 Essential service refers to117

Ibid., art. 28.

118[2006] Case no 76/05 (kh The Arbitration Council, January 20, 2006).

119

The Labor Law of Cambodia of 1997, art. 83–B.
120
Ibid., art. 326.
121
Ibid., art. 328.

29

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

supplies that are important for the life, safety, or health of all or part of the population.122
Furthermore, Article 330 and Article 337 of the Labor Law points out the serious action
the worker should be aware of when exercising a strike. The Constitution (Article 37)
guarantees the right to strike, but it must be exercised within the framework of law. The Labor
Law (Article 330) provides that “A strike must be peaceful. Committing violent acts during
a strike is considered to be serious misconduct that could be punished, including worksuspension or disciplinary layoff.” Based on the arbitrator-made rule, the performance of a
strike without informing the employer is not a case of serious misconduct.123 The Labor Law(Article 333) prohibits an employer from taking any disciplinary measure against workers
who join a strike. Accordingly, the dismissal of workers on the grounds that they wereinvolved in a strike is illegal.124
In addition, even when a strike does not follow the procedures set in the Labor Law,calling or inciting other workers to participate in the strike is also not a case of serious
misconduct. However, if a worker incites others to use violence during a strike, then the issue
is serious.125 In the 36/04 case, the workers switched off the electricity in the company. The
council ruled that the workers could go on strike, but they could not switch off the electricity
because it would interrupt the production of the company. Therefore, such an action was aserious case of misconduct because switching off the electricity destroyed the company’s
property during the strike.126
Article 337 of the Labor Law points out that serious misconduct occurs when theworker without valid reason fails to return to work within forty-eight hours of the court’s
declaration of the strike to be illegal.127 In the 22/04 case, the employer dismissed 97 workers
because they failed to return to work within forty-eight hours after the issuance of an
emergency injunction by the Phnom Penh Municipal Court declaring the illegality of thestrike on April 9, 2004 at around 2pm.128 In this case, when the workers failed to return towork before April 11, 2004 at 2pm without a valid reason, the conduct constituted serious
offense. However, the officials of Phnom Penh Municipal Court did not inform workers about
the court’s injunction until 2pm on April 10, 2004. On April 11, 12, and 13, the workers tried
to return to work, but the security guards did not allow them to enter. The security guards
demanded that the workers sign an agreement that they would return to work and not join
any further strikes, but the workers refused to sign this agreement. The Arbitration Council
finally ruled that the dismissal was illegal because the workers’ refusal to sign the agreement
was a valid reason for not returning to work on April 11, and the right to strike was guaranteedby the Constitution (Article 37) and the 1997 Labor Law (Section 1 of Chapter 13).
122

Ibid., art. 327.
[2009] Case no 125/09 (kh The Arbitration Council, October 09, 2009).
124[2009] Case no 154/09 (kh The Arbitration Council, December 16, 2009).
125[2005] Case no 08/05 (kh The Arbitration Council, March 23, 2005); [2005] Case no 20/05 (kh The
Arbitration Council, April 21, 2005).
126[2004] Case no 36/04 (kh The Arbitration Council, June 22, 2004).
127
Article 337 of Labor Law states “The Labor Courts or, in the absence of the Labor Courts, the common
courts, have sole jurisdiction to determine the legality or illegality of a strike…If the strike is declared illegal,
the strikers must return to work within forty-eight hours from the time when this declaration is given out. A
worker who, without valid reason, fails to return to work by the end of this period is considered guilty ofserious misconduct.”128[2004] Case no 22/04 (kh The Arbitration Council, June 07, 2004) 04.
123

30

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

While the Labor Law provides the basic and general types of serious misconducts, theinternal work rules of the companies regulate a certain number of serious cases of misconductthat fit with the nature and characteristic of their business. The Labor Law (Point (3) of
Article 83-B) has listed serious misconduct as a “serious infractions of disciplinary, safety,
and health regulations.” The Arbitration Council, in the 137/07 case, found that this article
did not state clearly what was the disciplinary regulation. Hence, the Arbitration Council
examined the company’s internal work rule to see whether or not disobedience to thecompany’s order is a serious misconduct.129
In addition, an internal work rule is used to check the serious misconduct because
Article 23 of the Labor Law requires employers to include worker’s obligation andpunishments that serve the need of the actual operation of the enterprises or companies.
Hence, the rules of employment play an important role in checking the legality of employer’s
execution of the right to disciplinary actions. Accordingly, although the employer may provethat the worker engaged in misconduct, a dismissal as disciplinary action must be inaccordance with internal work rules.130
Many enterprises established their internal work rule by imposing disciplinary
sanctions based on the magnitude of the misconduct (light misconduct, medium, and serious
misconduct). For example, the internal work rule mentions serious misconduct, medium
misconduct, and light misconduct as follows:131
A. Serious Misconduct: The Management board has the right to terminate a worker
immediately without reprimand in the following circumstances:- 1. During the assignment, if a worker is involved in obtaining interest from an outside
individual institute or organization which is at the expense of the Company. In this case,the worker will be fired immediately and be responsible for the loss to the company.
- 2. If a worker divulges a company’s secret to an outsider without agreement from the
management board, the worker will be fired immediately and be responsible for theloss to the company.
- 3. If a worker incites other workers not to work or to join in an illegal strike (see“Labor Law” of the Ministry of Social Affairs, Labor, Vocational Training and YouthRehabilitation), the worker will be fired immediately.
- 4. If a worker commits serous misconduct or seriously violates the Company’s
Internal Work Rules or any law of the country, the worker will be fired immediately.
- 5. If a worker committed misconduct as stated in type one of annex “A”.
B. Medium Misconduct: If worker committed misconduct as listed in type two of annex“A”, he/she will receive a written reprimand. After being reprimanded two times, andif there is no improvement, the worker will be fired.
C. Light Misconduct: If worker commits light misconduct, he/she will receive an oral
reprimand. In case of continuation of the misconduct, it is considered medium
misconduct.
While some internal work rules have regulated and enumerated a number of serious
129[2008] Case no 137/07 (kh The Arbitration Council, January 10, 2008).
54/04 (The Arbitration Council 2004); 55/04 (The Arbitration Council 2004).
131[2006] Case no 73/06 (kh The Arbitration Council, September 18, 2006).
130

31

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

misconducts, some just refer to serious misconducts provided by the Labor Law.132 Even
though an employer fails to include serious misconduct under the Labor Law into the rulesof employment, the employer still has the right to end the employment relation. For example,
even if an internal work rule of a company does not mention that fighting is a case of serious
misconduct, an assault against other workers is serious.133
The review of the awards of the Arbitration Council has shown that misconduct that isjudged as serious is not always found in the Labor Law or rules of employment of thecompanies. If misconduct is not listed in the Labor Law and internal work rule, then the firsttime an act is committed cannot constitute a serious offense. 134 However, misconduct
regardless of being light or medium can also become serious offence that will lead todismissal when it is repeated after a series of punishment records, such as warnings andsuspension of employment.135 The internal work rules of many companies regulate that it isa case of serious misconduct when the worker commits serious offenses receives repeatedwarning letters and commits another offence during the period of six months.

2.2. Examples of rules of dismissal due to misconduct
2.2.1. Misappropriation, embezzlement, and fraud
In the 76/12 case in 2012, the employer dismissed two workers on the grounds thatthey falsified the attendance registration and working time of the company. A worker
telephoned his coworker to register that he came to work at 7:59am, but he actually arrived
at 8:15am. Both of the workers were dismissed since they falsified the real information of
attendance registration in order to hide the lateness from their boss. Falsification of
attendance registration is a conduct of embezzlement of working time because the worker
did not work eight hours per day. According to the Arbitration Council, such a falsification
was unacceptable misconduct that reflected the disloyalty of the worker towards theemployer and which fell under serious misconduct in Article 83-B concerning
misappropriation, embezzlement, and fraud.136

132
Clause 10 of the internal work rule in [2006] Case no 33/06 (kh The Arbitration Council, May 25, 2006);
Clause 10 of the internal work rule in [2010] Case no 90/10 (kh The Arbitration Council, August 2010);
Clause 10 in case [2012] Case no 76/12 (kh The Arbitration Council, May 22, 2012).
133[2008] Case no 53/08 (kh The Arbitration Council, May 30, 2008).
134
In Case No: 76/05, the worker was accused of committing 3 different mistakes. According the Labor Law,these offences were not serious ones as maintained by the employer. In addition, the company did not haveinternal work rules to regulate the disciplinary measures or the type of serious misconduct. Therefore, theworker was considered to have committed a first time misconduct since there was no advance warning fromthe employer. [2006] Case no 76/05 (kh The Arbitration Council, January 20, 2006).
135[2006] Case no 73/06 (kh The Arbitration Council, September 18, 2006).
136[2012] Case no 76/12 (kh The Arbitration Council, May 22, 2012).

32

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

2.2.2. Insult and assault
When examined carefully, the serious misconducts set in the Labor Law and theinternal work rules of a company are not the main determinants to comply with the principle
of proportionality. Thus, the fact that a worker commits misconduct, which falls into serious
misconduct in the Labor Law and the rules of employment, cannot deter the council fromconsidering the proportionality of the dismissal and the offence. To consider whether the
choice of dismissal is taken appropriately according to the magnitude of the offence, thecouncil considers not only the fact that a worker commits a specified serious offense but also
all the facts or situation surrounding the action of the misconduct. In this sense, the council
considers the motive (intentional or unintentional) of the worker or whether or not he or she
can control himself or herself when committing misconduct.
For example, in the 13/04 case in 2004, the employer dismissed a worker forsupposedly committing a serious misconduct. 137 Article 82 of the Labor Law allows theemployer to dismiss workers without any prior notice period when the worker has committed
serious offenses. Article 83 lists some serious actions such as “threats, abusive language, orassaults on an employer or other workers.” 138 In this case, the dismissed worker called
another worker a crocodile and said, “I could always take your mother’s husband” and threw
a book and shoes at the other worker. From these behaviors, the dismissed worker committed
serious misconduct namely by using abusive language and assaulting the other worker.
However, the employer had to take disciplinary sanctions proportional to the seriousness ofthe misconduct.
The Arbitration Council examined all the circumstances surrounding the offense of theworker to consider whether or not the dismissal was proportional to the misconduct,
particularly the cause for the yelling and the throwing of things at the other worker. The
council found that the dismissed female worker committed such aggressive behavior when amale worker insulted her by saying “if you act up like that, you will never find anotherhusband.” This comment was made in public and affected the reputation of the woman in thecontext of Cambodian culture. Therefore, the Arbitration Council ruled that a reasonable
person would be likely to lose control of himself or herself and have a similar reaction as thattaken by the dismissed worker in the above situation. Consequently, the dismissal was notproportional to misconduct. The proper appropriate sanction was suspension for a period of
two months without pay.
In the 79/09 case, a worker was dismissed on the grounds of using insulting words.139
The worker was fired without notification or information about his offence. The worker had
no history of misconduct. During instruction from the administrative staff, there was noconflict or disagreement with the dismissed worker. However, when that worker left the room,
he used a derogatory phrase. The Arbitration Council interpreted the expression of thedismissed worker in three meanings. First, the worker insulted the administrative worker.
Second, he talked to his friends. Third, it was his habit when getting angry. In this case, thedismissed worker did not clearly insult the administrative workers, and such misconduct was
not a serious one. The Arbitration Council had the right to demand that the employer reinstate137[2004] Case no 13/04 (kh The Arbitration Council, March 30, 2004).
The Labor Law of Cambodia of 1997, art. 83–B (4) (1997).
139[2009] Case no 79/09 (kh The Arbitration Council, July 15, 2009).
138

33

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

or pay monetary compensation as provided by the law.
In the 16/11 case, one worker took pictures of another leading to a fight. According to
the Labor Law (Article 83-B), the worker’s assault against the other was a case of serious
misconduct. However, in this case, though there were two workers involved in the fighting,the employer dismissed only the one who started the dispute. The worker’s representatives
in the dispute claimed that the employer’s disciplinary measure dismissing only one worker
was inappropriate. The Arbitration Council ruled that the dismissal of the worker who started
the fighting was appropriate because starting a conflict and fighting with the others wasserious.140

2.2.3. Vandalism of company’s property
In the 59/05 case, a worker broke a company’s fan. According to the internal work rules,
vandalism constituted serious misconduct which would lead to dismissal. However, thecouncil ruled that the dismissal was not proportional to the misconduct because the worker
did not destroy the company’s property on purpose.141 The employer should have considered
all the facts before rendering a decision whether the act of engaging in such misconduct wasdue to a violent personality or unintentional misconduct. The motive of the worker should beconsidered in such cases.

2.2.4. Inciting other workers to commit serious offense
The Labor Law (Article 83-B) enumerates a list of serious mistakes including “inciting
other workers to commit serious misconduct.” According to this article, a serious misconduct
occurs when the worker incites other workers to do wrong. If a worker incites others but theoffense committed by the incited people is not serious, then it is not a case of serious
misconduct as provided in Article 83-B.142 Consequently, the act of the other workers whoare incited by the alleged worker is the main criteria for determining whether or not thealleged worker has committed serious misconduct. The determination of whether or not theact of the other workers is serious relies on the Labor Law and internal work rules.
In the 33/06 case, the Arbitration Council found that a worker incited other workers tostand up for five minutes to express solidarity, and the act of standing up by the workers
caused damage to the employer; however, such a misconduct was not serious according to
the Labor Law Article 83-B and the internal work rule of the company.143 In this case, thecouncil, when examining whether or not the act of standing up was serious misconduct, alsorelied on the fact that the employer did not punish the others who stood up but only the worker
leading the act of solidarity.

140[2011] Case no 16/11 (kh The Arbitration Council, February 11, 2011).
[2005] Case no 59/05 (kh The Arbitration Council, October 27, 2005).
142[2005] Case no 08/05 (kh The Arbitration Council, March 23, 2005).
143[2006] Case no 33/06 (kh The Arbitration Council, May 25, 2006).
141

34

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

2.2.5. Disobedience to the employer’s order
Another reason for dismissal is a worker’s disobedience to an employer’s order andmost of the disputes concerning the legality of employer’s order of transfer. Employers needto modify their business operations through the transfer of their labor force or the movementof the company’s location. Consequently, these changes may affect the working conditionsof the workers. The right of an employer to direct and control the workers as the owner ofthe enterprise derives from Article 2 of the Labor Law. Article 2 states:[E]very enterprise may consist of several establishments, each employing a group ofpeople working together in a defined place such as in factory, workshop, work site,
etc., under the supervision and direction of the employer… 144
The Arbitration Council interpreted this Article by ruling that “The AC is mindful not
to interfere with the right of supervision and management of activities of business andgeneral authorities of the company as employer in managing and changing the worksof the employees of the company provided it does not result in a reduction of wages, achanging of the working place to a place far from the original one, changing of day
shift to night shift or night shift to a day one and does not affect specific professional
skills. If these things are affected, it is considered as a violation of employment contractthat is required to be respected.145
According to this interpretation, employers have the right to direct and manage theirlabor force according to the needs of the company’s operation provided that this supervisionand direction are reasonable and lawful. 146 The idea of reasonable supervision or lawful
management refers to an employer’s decision that satisfies four conditions such as (1) nowage reduction; (2) no transfer to a distant workplace; (3) no transfer from day shift to night
shift; and (4) no transfer that affects a substantial change in the skills required to undertake
the work. 147 These four conditions are flexible rules and do not deter employers frommobilizing their labor resources.
In the 61/09 case, the Arbitration Council accepted the transfer of a worker who wascurrently working in Phnom Penh to Sihanouk Ville (200 km away).148 Consequently, thisorder violated condition (2) which requires there be no transfer to a distant place. The
Arbitration Council found that the company ordered the transfer be for six months, provided
the worker with an extra salary, accommodation and transport fees. The worker was a goodworker so the company wanted this worker to work temporarily in the other place as a modelfor other workers. Considering these facts, the council ruled that the transfer by the company
was reasonable.
In the 137/07 case, the employer was a company that provided security services to its
144

The Labor Law of Cambodia of 1997, art. 2 (1997).
[2003] Case no 17/03 & 18/03 (kh The Arbitration Council, November 11, 2003).
146[2006] Case no 06/06 (kh The Arbitration Council, February 16, 2006); [2006] Case no 18/06 (kh The
Arbitration Council, March 31, 2006); [2006] Case no 44/06 (kh The Arbitration Council, June 22, 2006).
147[2006] Case no 38/06 (kh The Arbitration Council, June 07, 2006).
148[2009] Case no 61/09 (kh The Arbitration Council, June 17, 2009).
145

35

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

clients, such as hotels, airports, restaurants, and houses. The employer transferred 17 workers
from Siem Reap Province and Kompong Thom Province to work in Phnom Penh City. Phnom
City is around 200 kilometers far from these two provinces. The council found that thistransfer and act of management was inappropriate and consequently the workers could reject
this order. 149 In this case, the council ordered the company to transfer these workers toanother location in the same province when it was impossible to allow them to work at theprevious place.
In the case where the exercise of the right of management and supervision is legal,
disobedience of an employer’s order will become misconduct. An employer can dismiss a
worker on this ground only when disobedience is a serious mistake as provided by the Labor
Law and the internal work rules. If it is not an instance of serious misconduct corresponding
to dismissal grounds in the Labor Law or rules of employment, the employer can discharge
the worker only if there is a history of previous disciplinary measures, such as verbal warningand written warning.150

3. Necessity of the operation of enterprise
Article 74 of the Labor Law allows the employer to dismiss a worker on grounds
relating to the requirements of the operation of the enterprise, establishment or group. The
Arbitration Council in the 32/05 case interpreted this point as being the case that “according
to this Article the employer has a valid reason [if the dismissal was] based on the operational
requirements of the establishment like a reduction of work or the closure of some part of theoperation.” 151 In this case, the council also accepted a valid reason of dismissals of 131
workers on the ground that the employer closed the building where they were working
because there was no longer any work.152 In addition, a fire accident that causes complete
damage to a factory is a valid reason related to the necessity of the enterprise.153
Since the grounds for such a dismissal is not the fault of the worker, Article 95 of theLabor Law requires an employer to fulfill the procedure in order to minimize the effect of
the laying off on the workers. Article 95 states as follows:
Any layoff resulting from a reduction in an establishment’s activity or an internalreorganization that is foreseen by the employer is subject to the following procedures:
The employer establishes the order of the layoffs in light of professional qualifications,seniority within the establishment, and family burdens of the workers.
149[2008] Case no 137/07 (kh The Arbitration Council, January 10, 2008).
The employer did not change the location of the company, reduce wages, change the work shift, or change
completely the skill of workers. Thus, the disobedience of the workers was misconduct. Since the workers had
been punished by disciplinary actions many times already, the dismissal was appropriate disciplinary action.
See 157/08 (The Arbitration Council 2009).
151[2005] Case no 32/05 (kh The Arbitration Council, June 17, 2005).
152
The company faced with economic difficulty because the only client of the company reduced buying
electricity from the company. [2011] Case no 111/11 (kh The Arbitration Council, September 14, 2011).
153[2011] Case no 54/11 (kh The Arbitration Council, June 17, 2011).
150

36

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

The employer must inform the workers’ representatives in writing in order to solicit
their suggestions, primarily, on the measures for a prior announcement of the reduction
in staff and the measures taken to minimize the effects of the reduction on the affected
workers.
The first workers to be laid off will be those with the least professional ability, then theworkers with the least seniority. The seniority has to be increased by one year for amarried worker and by an additional year for each dependent child.
The dismissed workers have, for two years, the priority to be re-hired for the same
position in the enterprise.
Workers who have priority for re-hire are required to inform their employer of any
change in address occurring after the layoff. If there is a vacancy, the employer must
inform the concerned worker by sending a recorded delivery or registered letter to hislast address. The worker must appear at the establishment within one week after
receiving the letter.
The Labor Inspector is kept informed of the procedure covered in this article. At therequest of the workers’ representatives, the Labor Inspector can call the concerned
parties together one or more times to examine the impact of the proposed layoffs andmeasures to be taken to minimize their effects. In exceptional cases, the Minister in
Charge of Labor can issue a Prakas (ministerial order) to suspend the layoff for a period
not exceeding thirty days in order to help the concerned parties find a solution. Thissuspension may be repeated only one time by a Prakas of the Ministry.154
In compliance with Article 95, an employer has two main duties: one before the layoffand the other after the layoff. Before a layoff or adjustment dismissal, the employer has to(1) establish a reasonable method for selection of which workers to dismiss, (2) consult withthe workers’ representatives, (3) notify the competent authorities, and (4) suspend the layoff
according to the order of the minster in charge of labor. After a layoff, the employer has toprovide the dismissed workers with a chance of reemployment within a period of two years
in the case where employer reopens the company.

3.1. Reasonable selection of workers
The Labor Law requires an employer to carry out a fair and reasonable selection ofworkers in the case of collective or adjustment dismissal. An order of layoff is set inconsideration of professional qualifications, seniority, and the family burdens of the workers.
The Labor Law of 1997 makes it clear that the workers to be first laid-off are those who haveless qualifications and less seniority. The family burden is considered to be a determinant ofseniority in the sense that seniority is increased one year for married workers with additional
years according to the number of dependent children. A reasonable selection of workers for
154

The Labor Law of Cambodia of 1997, art. 95 (1997).

37

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

layoff is also a procedural requirement in the first Labor Code of Cambodia of 1972.155 As
the Labor Code of 1972 was influenced much by the ILO Recommendation No. 119, thereasonable selection in Article 91 of the Labor Code of 1972 and in Article 95 of the Labor
Law of 1997 is an application of Paragraph 15 of this recommendation.156

3.2. Employer’s obligation to consult with workers’ representatives
The employer has to inform the workers’ representatives to procure their suggestions
on the announcement of layoffs and measures to minimize the impact of layoffs. In this case,the employer not only informs, but also consults with the worker’s representative to find a
resolution to avoid damage to the workers who are on the list of layoffs. The employer’s duty
to consult with the workers’ representatives in case of economic or adjustment dismissal isalso another procedural rule for collective layoff in the Labor Code of 1972. 157 The
employer’s obligation to have such consultations derives from Paragraph 13 (1) and (2) of
the ILO Recommendation No. 119 in 1963.158
The employer’s obligation to consult in Article 95 of the Labor Law of 1997 should beinterpreted according to Article 13 of the ILO Convention No. 158 in 1982 on Terminationof Employment.159 This is because the Constitution of Cambodia (Article 31) requires the155

The Labor Code of Cambodia of 1972, art. 91 (1972).
“R119 Termination of Employment Recommendation, 1963,” ¶ 15 reads: (1) The selection of workers tobe affected by a reduction of the work force should be made according to precise criteria, which it is desirable
should be established wherever possible in advance, and which give due weight both to the interests of theundertaking, establishment or service and to the interests of the workers. (2) These criteria may include-- (a)need for the efficient operation of the undertaking, establishment or service; (b) ability, experience, skill andoccupational qualifications of individual workers; (c) length of service; (d) age; (e) family situation; or (f)such other criteria as may be appropriate under national conditions, the order and relative weight of the above
criteria being left to national customs and practice.
157
The Labor Code of Cambodia of 1972, art. 91.
158“R119 Termination of Employment Recommendation, 1963,” ¶ 13 (1) & (2) reads:(1) When a reduction of
the work force is contemplated, consultation with workers’ representatives should take place as early as
possible on all appropriate questions. (2) The questions on which consultation should take place might include
measures to avoid the reduction of the work force, restriction of overtime, employment over a certain period,
measures for minimizing the effects of the reduction on the workers concerned, and the selection of workers
to be affected by the reduction.
159“C158 Termination of Employment Convention, 1982,” art. 13 reads: 1. When the employer contemplates
terminations for reasons of an economic, technological, structural or similar nature, the employer shall: (a)provide the workers’ representatives concerned in good time with relevant information including the reasonsfor the terminations contemplated, the number and categories of workers likely to be affected and the period
over which the terminations are intended to be carried out; (b) give, in accordance with national law andpractice, the workers’ representatives concerned, as early as possible, an opportunity for consultation on
measures to be taken to avert or to minimize the terminations and measures to mitigate the adverse effects ofany terminations on the workers concerned such as finding alternative employment…2. The applicability ofparagraph 1 of this Article may be limited by the methods of implementation referred to in Article 1 of thisConvention to cases in which the number of workers whose termination of employment is contemplated is atleast a specified number or percentage of the workforce…3. For the purposes of this Article the term theworkers’ representatives concerned means the workers’ representatives recognized as such by national law orpractice, in conformity with the Workers’ Representatives Convention, 1971.
156

38

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

government of Cambodia to respect human rights guaranteed in the international conventions,such as ILO Convention No. 158 which provides workers with the right to a valid reason in adismissal. In many countries, employers are not required to obtain the consent of the workers’
representatives toward employer’s decision on the issue of dismissal on the consideration thatthe workers’ representatives do not possess co-determination rights to minimize the impact ofdismissal, the right to appeal the reconciliation committee, or the right to reject the proposed
layoff.160

3.3. Employer’s obligation to notify a competent authority
The Labor Code of 1972 did not require an employer to notify an authority in the caseof collective layoffs. In compliance with Article 31 of the Constitution of Cambodia, theLabor Law of 1997 includes this requirement in procedural dismissals in the case of acompany’s restructuring or conducting necessary operations. Accordingly, the employer
should continue to inform the Labor Inspector of all the procedures and participate inmeetings to examine the impact of the proposed layoffs and measures to be taken to minimize
their effects, when the Labor Inspector calls for such meetings after there has been a requestfrom the shop steward or workers’ representatives. The employer’s duty to inform acompetent authority is an application of Article 14 of the ILO Convention No.158 on
Employment Termination in 1982.161 In the practice of many countries, although informedby the employer, the authority helps the parties only in the case where there is a request fromparties who consider that the assistance of the authority as necessary.162

3.4. Employer’s obligation to suspend a layoff
The employer, in exceptional cases, suspends layoffs for a period of not more than 30days when there is Prakas or regulation of Ministry of Labor in order to help the parties finda solution. The Ministry can issue such a regulation once again in order to deal with the issueof collective dismissals. Accordingly, the workers can request from the Ministry a suspensionof layoff for a maximum of two months. However, from the enactment of the Labor Code in

160

Report VIII (2) Termination of Employment at the Initiative of the Employer, 98.
“C158 Termination of Employment Convention, 1982,” art. 14 reads: 1. When the employer contemplates
terminations for reasons of an economic, technological, structural or similar nature, he shall notify, in
accordance with national law and practice, the competent authority thereof as early as possible, giving relevant
information, including a written statement of the reasons for the terminations, the number and categories ofworkers likely to be affected and the period over which the terminations are intended to be carried out…2.
National laws or regulations may limit the applicability of paragraph 1 of this Article to cases in which thenumber of workers whose termination of employment is contemplated is at least a specified number orpercentage of the workforce… 3.The employer shall notify the competent authority of the terminations referred
to in paragraph 1 of this Article a minimum period of time before carrying out the terminations, such period tobe specified by national laws or regulations.
162
Report VIII (2) Termination of Employment at the Initiative of the Employer, 108.
161

39

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

1997 up to the present, based on the reviewed of the awards of the Arbitration Council, it
appears that there has been no case where Ministry issued a Prakas to suspend the layoff.

3.5. Employer’s obligation to reemploy dismissed workers
In cases where an employer reopens a business or the section of the company where
the discharged workers used to work, the Labor Law requires the employer to give priority
to these workers for rehiring in the same position within two years. In this case, the employer
has to inform the concerned workers by sending a recorded delivery or registered letter to his
or her address.

4. Burden of proof
The Labor Law (Article 74) reads:
The labor contract of unspecified duration can be terminated at will by one of thecontracting parties. This termination shall be subject to the prior notice made in writingby the party who intends to terminate the contract to the other party…However, nolayoff can be taken without a valid reason relating to the worker's aptitude or behavior,
based on the requirements of the operation of the enterprise, establishment or group.
According to Article 74, only a worker can terminate the unspecified duration contract
at will, while an employer cannot terminate the contract freely unless he has a valid reason
relating to the worker’s aptitude or behavior, or to the requirement of business necessity. In
this sense, an employer does not have the right to dismissal. The freedom of an employer todismiss exists only for a valid reason. Consequently, the employer has to prove that adismissal takes place with a valid reason.163 If the employer fails to provide evidence to provethe existence of a valid reason, the council will make a decision that is favorable for theworker.
For example, in the 91/04 case, the employer accused the worker of committing aserious misconduct by insulting four other workers. The worker was never given a chance toknow who the accusers were nor to defend against the allegations. The council ruled that“ based on equity and justice, a person accused of a crime has the right to information about
the charge to know who the plaintiff are and has the right to self-defense or to find a lawyer
or representative to defend.”164 In the hearing, the employer refused to show the complaint163[2004] Case no 36/04 (kh The Arbitration Council, June 22, 2004); [2004] Case no 71/04 (kh The Arbitration
Council, September 2004); [2006] Case no 53/06 (kh The Arbitration Council, July 28, 2006); [2007] Case no
17/07 (kh The Arbitration Council, March 09, 2007); [2007] Case no 35/07 (kh The Arbitration Council, May
08, 2007); [2007] Case no 109/07 (kh The Arbitration Council, December 12, 2007); [2008] Case no 48/08 (khThe Arbitration Council, April 29, 2008).
164
91/04.

40

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

file of the four workers and did not allow those workers to appear in the hearing although
there was a request from the council. The council concluded that the employer failed toprovide evidence of serious misconduct. If any party failed to provide evidence, then the
council made unfavorable decisions for the other party, or accepted the evidence of the otherparty as true.
In cases of dismissal taking place according to valid reason, the employer has an
obligation to prove the existence of reasonable grounds. However, in cases of disputes overdismissal on the grounds of discrimination against union’s membership or activities, theworker who is the claimant has the burden of proof.165 The worker has to show that thedismissal is the result of discrimination while the employer has to prove that the dismissal
takes place based on other grounds. If the employer fails to convince the council that thedischarge took place according to a valid reason, the dismissal of the union leader or shop
steward falls under discriminatory action by the employer.

Section 5: Remedies for unjustified dismissal
As mentioned in the previous section, issues of dismissal are governed by three rules:
the requirement for prior notice, the statutorily prohibited dismissals, and the requirement fora valid reason. In other words, the employer cannot just rely on the prior notice to dismiss
the worker without being mindful of some particular prohibited dismissals in the Labor Law
and the rules of employment and the need for the existence of a valid reason. In response to
the employer’s unjustified dismissal, the Arbitration Council provides the victim worker witha form of remedy, namely monetary compensation or reinstatement, according to conditions
particular to each case.
This section aims to further discuss the two kinds of remedies. It examines the types ofremedies, and the legal grounds the Arbitration Council applies in order to provide remedies
to the dismissed workers.

1. Monetary compensation
1.1.Compensation for damages

165[2003] Case no 03/03 (kh The Arbitration Council, June 11, 2003); [2003] Case no 10/03 (kh The
Arbitration Council, July 23, 2003); [2004] Case no 19/04 (kh The Arbitration Council, May 05, 2004);[2004] Case no 17/04 (kh The Arbitration Council, April 08, 2004); [2008] Case no 01/08 (kh The Arbitration
Council, January 23, 2008); [2008] Case no 06/08 (kh The Arbitration Council, February 12, 2008).

41

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

The Arbitration Council demands employers to pay for damage in the form ofconsolation money to the victim worker in the case where dismissal takes place without valid
reason. Article 91 of the Labor Law stipulates that:
The termination of a work contract without cause, by one or the other of the parties tothe contract, can give the other party rights to damages…These damages are not thesame as the compensation in lieu of notice or the layoff compensation…The employee,
however, can request to be given a lump sum equal to the layoff compensation. In thiscase, he is relieved of the obligation to provide proof of the damage incurred.166
According to Hel, who is the author of a book explaining the Labor Law in Cambodia
in 2005, the provision regarding consolation money has an interesting history of revision.167
The first and second paragraphs of Article 91 are inherited from Article 87 of the Labor Code1972 and Article 87 of the Labor Code 1992168 where the employer or worker has the sameright to damages whenever one of them terminates the employment contract without
reasonable grounds, and that damage is different from compensation in lieu of a notice period
and dismissal indemnity. The claimant, either employer or worker, must provide proof ofdamages resulting from the termination without cause in order to receive compensation.169
The third paragraph is an additional rule covering the purpose of protecting the workers by
exempting them from the obligation to prove the damages. In this case, the dismissed worker
can receive compensation for damage only equal to the amount of dismissal indemnity or thelayoff compensation. If the damages are huge and the worker can show proof, he or she canbe compensated for more than the amount equal to the dismissal indemnity.
Moreover, Article 91(1) requires any party who terminates the contract without valid
reason to pay compensation for damage to the other party. Article 74(2) requires that theemployer only have a valid reason when terminating a contract of undetermined duration,
and Article 91 (1) applies only to an employer whose right to unilateral termination ofcontract has to be taken with a valid reason. In the cases of a contract of undetermined
duration, the workers have much freedom to terminate the employment contracts even when
they do not have any reason.

1.2. Severance pay
Severance pay refers to an amount of money that is provided by the employer whenterminating a contract, but it is not compensation or remedy for damage as a result of
166

The Labor Law of Cambodia of 1997, art. 91 (1997).
Chamreoun Hel, Nitekanhea (Labor Law), 2005, 263–66.
168
Article 87 of the Labor Code 1972 and Article 87 of the Labor Code 1992 read “The termination of a work
contract without cause, by one or the other of the parties to the contract, can give the other party rights todamages…These damages are not the same as the compensation in lieu of notice or the layoff compensation.”
169
It has been noticed that there was a surprising interpretation of Article 91 when the AC rejected the claim
for damage when the workers could not provide evidence of their damage. See [2004] Case no 51/04 (kh The
Arbitration Council, July 22, 2004).
167

42

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

dismissal without valid reason.170 This form of pay is a kind of social cost that an employer
has to bear as part of the responsibility to provide the workers with an amount of money
based on the length of employment and is related to safeguarding the livelihood of the victim
workers and their dependents during a certain period before they obtain new employment.171
Severance pay here refers to dismissal indemnity in Article 89 of the Labor Law.
As stated in Article 91 of the Labor Law, damage and dismissal indemnity are different.
A dismissal indemnity is a kind of severance payment that is provided to the worker
regardless of whether or not there is a valid reason attached to the termination. Accordingly,
even though the employer has a valid reason relating to the worker’s capacity and economic
difficulty, the employer has to provide the worker with a dismissal indemnity. However, inthe case of serious misconduct, the employer is exempted from providing such compensation.
Hence, dismissal indemnity provides workers with income protection for a short period.
Article 89 of the 1997 Labor Law stipulates that:
I If the labor contract is terminated by the employer alone, except in the case of aserious offense by the worker, the employer is required to give the dismissed worker,
in addition to the prior notice stipulate in the present Section, compensation for thelayoff as explained below:
Seven days of salary and benefits if the employee’s length of continuous service at thefirm is between six and twelve months.
If the worker has more than twelve months of service, compensation for a layoff will
be equal to fifteen days of salary for each year of service, up to the maximum of six
months of salary. Fractions of a year of six months or more count as an entire year.
The worker is also entitled to this compensation if he is laid off for reasons of health.172
According to Article 89, a worker can receive the maximum of six months of salary
when the length of his or her service is at least 12 years. The disputes over the dismissal
indemnity mostly concern the method of calculation. In the 27/04 case in 2004, the employer
calculated the dismissal indemnity of the worker whose length of service was 13 months bytaking the minimum wage as the basis for calculation.173 The Arbitration Council rejected
this calculation and provided the formulation of calculation as follows: total gross wages
including overtime and bonuses received by the worker over the 12 months period prior todismissal divided by 12 divided by 26 and finally multiplied by 15 days.174
In certain cases, the termination of an employment contract does not appear in the formof a dismissal but instead resignation. This is because the Labor Law requires the dismissal
to be taken when there is a valid reason and to comply with procedures. The employers wish
to avoid the complicated compliance of the rules and the consequences when they violatethese rules of the Labor Law. The employer may suggest or behave in a negative manner toforce the workers to resign. In order to protect the worker, the Labor Law (Article 90) reads,
170

Termination of Employment Digest (Geneva: International Labour Office, 2000), 3.
With the absence of unemployment insurance and the measure to protect the worker’s income, thegovernment will shift the burden of social cost to the employer. See Collins, Justice in Dismissal, 141–142.
172
The Labor Law of Cambodia of 1997, art. 89 (1997).
173[2004] Case no 27/04 (kh The Arbitration Council, June 16, 2004).
174[2004] Case no 17/04 (kh The Arbitration Council, April 08, 2004).
171

43

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Indemnity for dismissal must be granted to the worker and, if applicable, he can also
claim damages even though the contract was not terminated by the employer, but thelatter, through his evil actions, pushed the worker into ending the contract himself. If
the employer treats the worker unfairly or repeatedly violates the terms of the contract,
he also has to pay indemnities and damages to the worker.175
Accordingly, in cases where the worker terminates the employment contract becauseof the employer’s bad intention or persecuting behavior, the resigning worker has the right toa dismissal indemnity and the right to damages. In the 21/10 case, the employer advised theworker to resign so that they could receive a dismissal indemnity. When the worker did not
resign, the employer fired the worker due to serious misconduct concerning the leaking ofsecret information and internal documents of the company. Consequently, the worker could
not receive dismissal indemnity at all.176 The worker asserted that she did not commit any
alleged misconduct, and the employer could not prove anything. Therefore, the Arbitration
Council ruled that the resignation or termination by the worker was in accordance with thewill of worker but was due to the bad intentions of employer. Thus, the worker had a right todismissal indemnity and damages.

1.3. Paid annual leave
A worker who has been working continuously has the right to paid annual leave at therate of one and a half work days of paid leave per month. In a year, a worker has at least 18
days for annual paid leave. In addition, this length of paid annual leave increases according
to the seniority of the workers at the rate of one day per three years of service.177 The worker
can use their paid leave only after they have served the company for one year of service. In
principle, workers use annual leave during the Khmer New Year (April 14-16).178 Based on
Article 167 (Paragraph 2) of the Labor Law, any form of agreement providing compensationin lieu of paid annual leave or renouncing or waiving the right to paid leave is void. More
importantly, the workers cannot demand compensation for the days of the annual paid leave
not used during the continuance of an employment contract.179
When the employment contract is terminated before the use of annual paid leave or
there are days of annual paid leave that are not used, the employer has to pay indemnity forthese unused days.180 In practice, there are many disputes regarding the method of calculationof annual paid leave. For example, in the 40/09 case, the employer calculated the amount ofmoney for annual paid leave by taking the basic wage of a month divided by 26 andmultiplying by the days of annual paid leave.181 Article 168 of the 1997 Labor Law reads:
175

The Labor Law of Cambodia of 1997, art. 90.
[2010] Case no 21/10 (kh The Arbitration Council, April 23, 2010).
177
The Labor Law of Cambodia of 1997, art. 166.
178
Ibid., art. 170.
179[2009] Case no 40/09 (kh The Arbitration Council, July 06, 2009).
180
The Labor Law of Cambodia of 1997, art. 167, ¶ 2.
181
[2009] Case no 40/09 (kh The Arbitration Council, July 06, 2009).
176

44

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Before the worker departs on leave, the employer must pay him an allowance that is atleast equal to average wage, bonuses, benefits, and indemnities, including the value of
benefits in kind, but excluding reimbursement for expenses, that the worker earned
during the twelve months preceding the date of departure on leave. This allowance shallin no case be less than the allowance that the worker would have received had heactually worked.182
In dealing with disputes over the amount of compensation for the annual paid leave,
the Arbitration Council in many cases decides that the indemnity is calculated by taking thegross total wage including wages for part-time work and bonuses the workers received in 12
months divided by 12 and divided again by 26 and finally multiplied by the number of daysof annual paid leave.183

2. Reinstatement
According to the arbitrator-made rules, reinstatement is a legal consequence ofdismissals prohibited by the Labor Law and ministerial orders, and dismissal without valid
reason. The victim who succeeds in the arbitration process can return to the previous
workplace. In this sense, the workers are guaranteed job security since the employer cannot
use money to dismiss workers arbitrarily. However, there is no provision that explicitly saysthat dismissal without valid reason will lead to reinstatement. The question concerns the legal
grounds and on which conditions the Arbitration Council uses in order to provide
reinstatement to workers.

2.1.Legal grounds for the claim of reinstatement
The 1997 Labor Law does not precisely regulate whether or not the effect of an invalid
dismissal is illegal. There are two main articles in the Labor Law regarding the remedies for
dismissal without valid reason. Article 91 entitles the dismissed worker to damages while
Article 385 empowers the courts to order reinstatement. In this context, the Labor Law fails
to determine whether or not the dismissal without valid reason is groundｓ for reinstatement,
but it empowers the Labor Court to reinstate the victim workers. For example, Article 385 of
the Labor Law stipulates that:
Any labor dispute covered by Chapter XII of this law that could not be settled throughconciliation can be brought before the Labor Court…For the purpose of this dispute;the Labor Court can take a number of the necessary measures as follows:
182
183

The Labor Law of Cambodia of 1997, art. 168.
[2009] Case no 40/09 (kh The Arbitration Council, July 06, 2009).

45

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

1) Order the reinstatement of a dismissed worker, by retaining his former position andpaying him a retroactive wage.
2) Nullify the results of a union election or the election of a shop steward.
3) Order an employer to negotiate with a union or to cooperate with a union steward ora shop steward.
4) Decide the payment for damages in favor of the party who won the case in the labor
conflict.184
Kompong Speu Provincial Court in 2002 applied Article 385 in ordering an employer
to reinstate seven workers who were alleged to have engaged in misconduct.185 In contrast,
the Appellate Court of Cambodia rejected this reinstatement order for the following
reasons.186 First, the workers were absent without permission and went on strike several
times, and had committed many offences as seen in the apology papers. Second, the court
considered the employer’s worry that the reinstatement of these workers would lead tointerruption of operations and damage to the collective benefit between employer andworkers. Third, the court considered that the dismissal of these workers took place according
to Article 74 for the social or collective benefit between workers and employer. Fourth, theapplication of Article 385 by the Kompong Speu Provincial Court through an order forreinstatement with consolation money was not appropriate because Article 74 entitled theemployer to terminate the employment contract at will. In this case, the employer dismissed
the workers because the workers had committed offences.
The decision of the Appellate Court in the above case seemed to follow a tendency inrejecting the application of Article 385 of the Labor Law to reinstate workers in cases of
dismissals without valid reason. As seen in the fourth reason, the Appellate Court interpreted
Article 74 by allowing the employer to dismiss the workers freely and cancelled the decisionof Kompong Speu Provincial Court whose decision was based on Article 385. However, it is
too soon to make the above-mentioned conclusion by relying on this only one judgment of
the higher court. Since the case was in 2002, there are not many judgments available foranalysis on the issue of justified dismissals.
The Labor Law also does not clarify if a violation by employers in carrying out
prohibited dismissals is void and if the employer must reinstate the workers. In order to close
this loophole, the Ministry of Social Affairs, Labor and Veteran Affairs in 2001 issued Prakas
No. 305 that nullified the dismissal of the protected workers such as union founders, leaders,candidates for union leaders, and shop stewards that were taken without approval from theLabor Inspectors.187 Therefore, even in the case where the dispute was being settled by the184

The Labor Law of Cambodia of 1997, art. 385.
[2002] Case no No.12/12–03–2002 (kh Kompong Speu Provincial Court of Cambodia, March 12, 2002);
cited in Channmeta et al., Legal Methodologies: Khmer Law, 88–98.
186[2002] Case no No.173 “CHH”/26–09–2002 (kh Appellate Court of Cambodia, September 26, 2002); citedin Channmeta et al., Legal Methodologies: Khmer Law, 88–98.
187“The workers who run for a union election, like the staff delegates, are entitled to protection against
dismissal. The protection lasts for 45 days before the election and ends 45 days after it if the candidate does
not win the election. The union shall inform the employers about the membership by all means. The employer
shall carry out this provision only once in the election for a union leader.” Prakas No. 305 SKBY on the
Representativeness of Professional Organization of the Workers at the Enterprise and Establishment Level,
and the Rights in Collective Negotiation for the Conclusion of Collective Agreement at the Enterprise and
185

46

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

court, the ministry immediately took all actions to reinstate the workers to their former
positions.188
The Arbitration Council was established in 2003 to resolve collective labor disputes.
In 2004, the Ministry of Labor and Vocational Training issued Prakas No. 099 to empower
the Arbitration Council to issue awards of reinstatement or monetary compensation. Article
34 of Prakas No. 099 on the Arbitration Council provides:189
In matters referred to the Arbitration Council, the Arbitration Council shall have thepower and authority to fully remedy any violation of the provisions in the Labor Law,
implementing regulations under the Labor Law, collective bargaining agreements orother obligations arising from the professional relationship between the employer andthe employees. Within the limitations of the Labor Law and this Prakas, it has the power
and authority to provide any civil remedy or relief that deems just and fair, including:
A. Orders to reinstate dismissed employees to their former or any other appropriate
position;
B. Orders to the immediate payment of back pay;
C. Orders to cease immediately any industrial action, which is being conducted by aparty to the dispute;
D. Orders to cease immediately any other illegal or prohibited conduct, including but
not limited to retaliation;
E. Orders to bargain;
F. Orders following a settlement under Article 30 of this Prakas;
G. The establishment of terms for a collective bargaining agreement;
H. Such other relief as is appropriate.190
Based on Prakas 099, the Arbitration Council ordered the employer to reinstate theworkers to their former position with the amount of money they would have received duringdismissal. These reinstatement cases mostly are concerned with dismissals which are
grounded in discrimination on the basis of union affiliation and the exercise of union’s
activities.191 The Arbitration Council orders reinstatement when there are dismissals of union

Establishment Level, Clause 3 (2001).
188“Any employer who fired an employee protected by the above provision without the approval from thelabor inspector or who causes damage to him/her shall be fined under Article 373 of the Labor Law. Any
action by the employer in violation of above provision shall be considered null and void. The MoSALVY
shall take careful, immediate actions in its authority to help the fired worker back into his/her job (although
the case is awaiting a hearing before an authorized court.)”Ibid., Clause 4 (4).
189
Prakas No. 099 SKBY on the Arbitration Council, Clause 34 (2004).
190
Ibid.
191 The dismissal of candidates of union without approval from the Labor Inspector is void. See 17/04. “TheArbitration Council found that the worker’s dismissal was related to discrimination against a union rather thanhis mistake and it was wrong according to the procedure in the Labor Law. Thus the Arbitration Council
considered worker’s dismissal unlawful and decided that the employer had to reinstate the worker with fullsalary from the time he was dismissed. See 19/04 (The Arbitration Council 2004). Reinstatement of theworkers: The employer gave severance pay to the workers. One of the 4 rejected this payment while other 3
had no choice but to accept the payment. The dismissal was based on the union involvement, thus theemployer had to reinstate the workers. See [2004] Case no 41/04 (kh The Arbitration Council, August 06,
2004).

47

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

leaders or protected workers without approval of the Labor Inspector.192 However, from theoutset, the Arbitration Council also provides workers with an order of reinstatement as a
remedy in the case where the employer unilaterally terminates the contract without
reasonable ground.

2.2. Conditions for reinstatement
With the power to order reinstatement, the Arbitration Council can order reinstatementin cases of prohibited termination or the dismissal of protected workers and extends thisprotective mechanism. For example, in the 81/04 case in 2004, the employer dismissed aworker who had been at the company more than two years, and he could not provide a valid
reason related to the worker’s aptitude or behavior or to operational reasons. The Arbitration
Council ordered the employer to reinstate the worker by stating that:
Based on only the law and the hearing alone, the Arbitration Council would order theemployer to reinstate [the worker X] giving her full wage...However, the Arbitration
Council is aware and acknowledge that [the Company] suspended the contracts of 282
workers due to a lack of orders. The suspension of so many labor contracts serves as adriving force for the Arbitration Council to believe that it will be very difficult for thecompany to find a job for [the worker X]. Based on the particular facts and the principleof equity (the employer cannot afford to offer [the worker X] a job), the Arbitration
Council decides that the employer should include [the worker X] as a suspended
worker.193
According to this case, even though the Arbitration Council did not specify which law
was used as a ground for reinstatement, it seemed that the council had the power in deciding
whether or not monetary compensation or reinstatement was an acceptable remedy for adismissal without valid reason. Moreover, in the 111/04 case, the employer dismissed an
ordinary worker without a valid reason. The fired worker wanted to be reinstated whereas theemployer rejected this. The council ordered the employer to pay monetary compensation
instead of reinstating the worker by ruling that:
Generally, when the employer terminates the worker without a valid reason, Arbitration
Council can issue an award ordering reinstatement or payment of indemnity for
dismissal in accordance with the Labor Law, depending on the context…In this case,the worker is normal worker and based on the employer’s ultimate position of not
accepting the reinstatement, the Arbitration Council will not issue the award ordering
the reinstatement of this worker.194
Additionally, in order to provide reinstatement to the worker, the Arbitration Council
even nullified the dismissal as being without valid reason as its award in the 111/04 case192
[2008] Case no 148/07 (kh The Arbitration Council, February 11, 2008); [2009] Case no 71/09 (kh The
Arbitration Council, July 16, 2009); [2010] Case no 09/10 (kh The Arbitration Council, February 15, 2010).
193
81/04 (The Arbitration Council 2004).
194[2005] Case no 111/04 (kh The Arbitration Council, January 12, 2005).

48

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

reads “[B]ecause this worker did not commit serious misconduct according to Article 83 of
the Labor Law and also the employer did not apply its internal work rule, the termination of[the worker X] is invalid.”195 In the 47/06 case, a worker was dismissed without prior noticeand no valid reason was given for termination. In this case, the council ruled “In ArbitralAward 19/04, the Arbitration Council made an interpretation that if a dismissal is not inaccordance with the law, the dismissal is null and void and the employee will be considered
to have remained employed by the company.196
The council in this case referred to the 19/04 case where the dismissal was related todiscrimination against a union rather than the offence of a worker, and was wrong according
to the procedure in the Labor Law where the approval of the Labor Inspector is needed forthe dismissal of protected worker. In this case, the Arbitration Council ruled that the dismissal
was unlawful and that the employer had to reinstate the worker with full salary.197
In addition to a statement that nullifies the dismissal without valid reason, theArbitration Council decides on the basis of the conditions or context of each case in order tojustify reinstatement. The Arbitration Council cannot provide reinstatement by simply sayingthat a dismissal without valid reason is void since a decision has to be grounded on thesituation or the context of each case. For example in the 59/05 case where the employment
relationship had broken down beyond repair, the Arbitration Council rejected the claim of
the worker for reinstatement and ordered the company to provide the discharged workers
with monetary compensation. 198 In the 64/05 case, the Arbitration Council orderedreinstatement by referring to Clause 34 of the Prakas No. 099 when a dismissal was madewithout valid reason. 199 Accordingly, the power to order reinstatement derives from aministerial order and belongs to the council that has jurisdiction over the collective labor
disputes.
In conclusion, the Arbitration Council has the authority to order an employer to pay
monetary compensation or to reinstate the workers based on Prakas No. 099 (Clause 34). In
the case of dismissal prohibited by law, the Arbitration Council orders reinstatement with fullwage from the period of dismissal.200 Moreover, the council orders reinstatement in the caseof dismissal without valid reason. 201 However, a dismissal without a valid reason is notalways the object of a reinstatement order. In cases where the worker requests monetarycompensation, even though the dismissal occurs without a valid reason, the council orders
monetary compensation according to the wishes of the fired worker.202 In cases where the
195

Ibid.
The reason for this reinstatement was also because the AC referred to the reconciliation report date 13
March 2006 in order to end a strike taken from February 22 to March 13, 2006. The report provided asfollows: (1) before firing any worker, the Company would look for the valid reasons (internal rules and Labor
Law). The Company would not use the contract termination as the pretext to dismiss a permanent worker,
union activist and leader. And (6) the Company agreed that it would not commit reprisals against any worker
who joined the strike including the regular workers, probation workers, {task workers} and reinstated all
workers who were fired during the strike. See Ibid.
197[2004] Case no 19/04 (kh The Arbitration Council, May 05, 2004).
198
59/05.
199
64/05 (The Arbitration Council 2005).
200[2009] Case no 154/09 (kh The Arbitration Council, December 16, 2009).
201[2008] Case no 134/08 (kh The Arbitration Council, November 19, 2008).
202[2008] Case no 51/08 (kh The Arbitration Council, April 25, 2008); [2009] Case no 157/08 (kh The
Arbitration Council, January 20, 2009).
196

49

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

employment relationship is broken beyond reparation and the worker requests reinstatement,
the council orders monetary compensation and rejects reinstatement.203

3. Problem of remedies for economic dismissal
In the case of adjustment dismissal or dismissal due to economic reasons, there arealso two requirements: the existence of a valid reason such as a reduction in an
establishment’s activity or an internal reorganization that is foreseen by the employer and therequirement to comply with some procedures. In brief, these procedures demand theemployer (1) establish an order for layoff based on worker’s professional qualifications,seniority, and family burden; (2) inform the workers’ representatives to get their suggestions
on the announcement of layoffs and measures to minimize the impact of layoffs; (3) keep
informing the Labor Inspector about all the procedures and participate in meetings to examine
the impact of the proposed layoffs and measures to be taken to minimize their effects, whensummoned by the Labor Inspector at the request of the shop steward/workers’
representatives; and (4) in exceptional cases, to suspend the layoffs for a period not morethan 30 days when there is a Prakas or regulation from the Ministry of Labor in order to help
the parties find a solution. Ministry can reissue this regulation once.
Though the Labor Law provides substantive and procedural rules for dismissal relating
to the operational needs of an enterprise, the two are not inter-dependent. The failure to abideby the procedures in Article 95 does not affect the reasonableness of dismissal. A dismissal
without a valid reason entitles the workers right to damages in Article 91. However, there is
no provision that punishes the employer who violates the procedures in Article 95.
When dealing with disputes where there is a violation of procedural rules, theArbitration Council uses its equitable right 204 to provide compensation for the workers
according to the real facts or conditions of each case. The council’s equitable right derives
from clause 34 of Prakas No. 099 that empowers the Arbitration Council with “the power
and authority to fully remedy any violation of the provision in the Labor Law, collective
bargaining agreements or other obligations arising from the professional relationshipbetween the employer and the employees.”205
Several cases show how the Arbitration Council provides remedies to dismissed
workers when there is employer’s non-compliance with the procedures in Article 95. In the
02/04 case, the company lost its benefit due to the decline of guests then resorted forcollective dismissal of 71 workers.206 Thus, it complied with Article 74 that requires a valid
reason, but failed to follow the procedures in Article 95. The company only explained to the203[2011] Case no 144/10 (kh The Arbitration Council, February 16, 2011).
The equitable right refers to the power of the judge who has discretionary power in providing fairness
according to the fact of individual cases when there is no legislative provision dealing with the issues. John
Merryman and Rogelio Perez-Perdomo, The Civil Law Tradition: An Introduction to the Legal Systems ofEurope and Latin America, 3rd ed. (Stanford Univ Pr, 2007), 48–55.
205
Prakas No. 099 SKBY on the Arbitration Council, Clause 34 (2004).
206[2004] Case no 02/04 (kh The Arbitration Council, April 16, 2004).
204

50

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

ministry about its economic difficulties and its intention to suspend the workers but failed toestablish an order for layoffs or to discuss it with the representatives of the workers. In the
Labor Law, there is no provision that clearly punishes the employer who does not fulfill theprocedure before collective layoff in Article 95.
Since the Arbitration Council has jurisdiction over labor disputes, the council has thepower to consider if the dismissed workers should receive monetary compensation orreinstatement. 207 The council in this case decided that monetary compensation was theappropriate measure. The Arbitration Council in this case stated, “The 71 employee havebeen dismissed between six and eight months because the employer failed to comply withthe procedures set out in Article 95 of the Labor Law. If the employer had, the 71 people may
still be the hotel’s employees. Therefore, they lost at least the amount equal to between six
and eight months wage and fringe benefits.” 208 The Arbitration Council found that theemployer should compensate the employees the amount equal to three months wages andfringe benefits was an appropriate and justified remedy. The employer breached the law
without ill intent and the workers lost their wages due to a violation of law.
A review of the decisions of the Arbitration Council also reveals the change of rule that
requires an employer to pay wages and all kind of benefit from the date of dismissal until thedate of the issuance of the award. For example, in the 21/10 case, the employer failed tofollow procedures, in particular to inform the union and labor inspector. The Arbitration
Council interpreted that the notification regarding the reduction of workers to union and labor
inspectors provided workers with chance for the Minister of Labor to intervene by issuing a
proclamation to suspend the dismissal or layoffs for the duration less than 30 days at least
twice.209
In this case, according to the council’s decision, the failure to follow Article 95
regarding notification to the union and Labor Inspector made the workers lose the chance for
an intervention by the ministry. Thus, the employer had to provide compensation to theworkers for two-month wages and all benefits calculated according to the wage received one
month before dismissal.

Conclusion
A review of the short history of the application of the Labor Law, particularly the ruleof valid reason, reflects the weaknesses of the rule of justified dismissal in Cambodia. The
difficulties in access to the judgments of the courts along with the scarcity of the disputes
referred to the courts makes it hard for researchers to understand the standard rules, or theunwritten rules of the courts.210 When dealing with collective labor disputes on the matter of207

Prakas No. 099 SKBY on the Arbitration Council, Clause 34.
[2004] Case no 02/04 (kh The Arbitration Council, April 16, 2004).
209[2010] Case no 21/10 (kh The Arbitration Council, April 23, 2010).
210
Only one Supreme Court’s judgment No: 53 dated March 14, 2000 is available in hand. In that judgment,
there is no explanation as to what constitutes valid reason. The judgments in the lower courts are notavailable.
208

51

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

dismissal, the Arbitration Council develops rules to an extent that at least provides someinsight into the system of dismissal rules in Cambodia. Based on the arbitrator-made rules,
remedies for unjustified dismissal consist of monetary compensation and reinstatement.
Since the rules of dismissal are being developed, the remedies as parts of the rules have
many flaws as a result of loopholes in the law, particularly the 1997 Labor Law. The violationof the procedures in Article 95 does not affect the legality or validity of dismissal relating tothe operational needs of the enterprise since these procedures aim only to minimize theimpact of the layoff. However, the 1997 Labor Law fails to mention punishments for thisviolation. Thus, the Arbitration Council with its power to order compensation orreinstatement can order remedies for the worker under the justification that if the employer
complies with the procedures the worker will not lose their income. In this case, the employer
has to pay an amount of money equal to the wages and all benefits the workers would havereceived during two months.
The Arbitration Council has developed the dismissal rules by filling the loopholes withthe consistency of its decisions. The decisions of the previous panel of the council become
the model or case law for the next panel to decide cases with similar stories. Since 2010, theMoU has enforced the council’s award on right disputes; the arbitrator-made rules have hadsome influence on employment practices in Cambodia since decisions were accompanied byjustification with transparency and reliability.

52

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Chapter 2: Rule of justified dismissal in Japan
Section 1: Dismissal rules in Japan
1. Freedom of dismissal
The Japanese Civil Code promulgated in 1898 was the primary legal source dealing
with the termination of employment relations before the enactment of the Labor Union Act
in 1945 (amended in 1949) and the Labor Standard Act in 1947.211 According to the principleof the Civil Code, dismissal and resignation are treated equally as a means of employment
contract termination. For example, Article 627 (paragraph 1) of the Civil Code provides that“[I]f the parties have not specified the term of employment, either party may request to
terminate at any time. In such cases, employment shall terminate on the expiration of two
weeks from the day of the request to terminate.”212 Since parties could request to terminate acontract at any time, employers and workers could freely terminate their employment
contracts after the elapse of the two-week prior notice period. Employers or workers did nothave to present a valid reason for their intention of termination.
The Civil Code of Japan was enacted when the influence of the concept of freedom ofcontract existed in the civil code of many countries, which allowed both employer and worker
to freely conclude and terminate their contract. 213 In addition, this code allows for the
possibility to end a contract at any time because long-term employment relationships were
not popular among workers and employers at the time, and the two-week prior notice wasused to avoid disadvantages resulting from a sudden or unexpected termination. 214 In
addition, the freedom to terminate the contract at any time without the requirement of areason was to protect the parties from being bound to unfair long-term employment
relations.215
After the end of World War II, there was an increase in rules restricting the employer’s
right to dismissal while workers still enjoyed their freedom in terminating the contracts. It isgood for parties to a contract that they received equal treatment under the law, particularly
the Civil Code. However, the rule of equal treatment of employment termination under the
Civil Code leads to different implications. This is because the execution of equal freedom
causes considerable disadvantages to workers in real practice while it benefits only
employers who have greater economic power.216

211

Employment relations are governed from Article 623 to Article 631 of The Civil Code of Japan of 1898
(1898).
212
Ibid., art. 627.
213
Sinya Ouchi, “Special Topic: Change in Japanese Employment Security: Reflecting on the Legal Points,”
Bulletin of Japan Institute of Labor Vol. 41-No. 1 (January 1, 2002).
214
Daniel H. Foote, ed., Law in Japan : a Turning Point, Asian law series (Seattle: University of Washington
Press, 2007), 484.
215
鳩山秀夫, 日本債權法各論 Detail on Law of Obligation in Japan (東京: 岩波書店, 1924), 549.
216
Sugeno, Japanese Employment and Labor Law, 473–74.

53

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

A dismissed worker may face economic or even social hardships while an employer
finds it easy to replace a resigning worker. Particularly, after World War II when there werenumerous workers who faced food shortages and low employment opportunities, dismissal
could cause social and economic hardship for workers and their dependents.217 Consequently,
the statutory laws and judicial rules noticeably controlled the employer’s right to dismissal.
In 1947, the Labor Standard Act was enacted to provide workers with “a set of basic
minimum standards” that are a better protection than what Civil Code ever achieved.218 The
minimum standard according to the Labor Standard Act means that parties to the employment
relationship cannot establish working condition that provides less protection than theworking condition in this act; however, it encourages parties to interact under the betterworking conditions.219
Regarding dismissal rules, the Labor Standard Act requires prior notice to be given one
month before the date of dismissal. In addition to the Labor Standard Act, which deals withindividual labor relationships, the Union Act was amended in 1949 to deal with collective
labor relations. Many other legislative rules were also adopted. These rules provided workers
with the protection of one-month prior notice and prohibitions on dismissals.

2. Notification of dismissal
The period of prior notice is necessary to prevent threats to the livelihood of workers
and to provide workers with a sufficient period for preparation, such as reemployment.220
Based on this consideration, the Labor Standard Act (Article 20) extends the two-week periodof prior notice in the Civil Code to 30 days. Therefore, employers have to notify about adismissal to workers at least 30 days in advance. If employers fail to fulfill this obligation,
they have to pay the average wage for a period of not less than 30 days. However, theemployer is released from the obligation of giving prior notice when dismissal takes place
due to serious offences by the worker, or to the impossible continuance of the enterprise due
to natural disaster, or other unavoidable grounds.221 In this case, the employers have to obtainapproval from the relevant government agency (Chief of Labor Standard Inspection
Office).222 In addition, the employers also can reduce the number of days of prior notice bypaying the average wage of each day the employers have reduced.223 For example, after 20days of advance notice, an employer has to pay for the remaining 10 days to the dismissed
worker.
Regarding dismissal based on reasons attributable to workers, when an employer
217

Takashi Araki, Labor and Employment Law in Japan (Tokyo: The Japan Institute of Labor, 2002), 24.
Daniel H. Foote, “Judicial Creation of Norms in Japanese Labor Law: Activism in the Service of Stability,” UCLA Law Review 43 (1996 1995): 640.
219
Labor Standard Act of Japan, art. 1(2) (1947).
220
土田道夫 et al., 条文から学ぶ労働法 Studying Labor Law from Articles (有斐閣, 2011), 31–32.
221
Labor Standard Act of Japan, art. 20, ¶ 1.
222
Ibid., art. 20, ¶ 3.
223
Ibid., art. 20, ¶ 2.
218

54

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

dismisses workers immediately the employer is required to obtain approval from the Chiefof Labor Standard Inspection Office. Moreover, there have been also conflicts over thequestion of whether or not this approval could affect the validity of disciplinary dismissal.
In a case where there was reason for immediate dismissal, the dismissal that took place
without the approval of the Chief Labor Inspector Office and so was the object of punishment
on the grounds of violation of procedure; however, the validity upon the civil law/private lawof this dismissal was fine because the approval was made from the viewpoint of the chief ofadministration.224 The judgment over the validity of a disciplinary dismissal was not an easytask for the labor inspector.225
Authorization for an exemption of dismissal notice was no more than the procedure toauthorize the fact by the government office, and whether or not to provide the benefit ofdismissal notice was decided according to the existence or non-existence of the concrete factthat exempts the employer from the obligation of dismissal notice.226 Therefore, though there
was approval from the labor inspector, if there was no reason of exemption, the employer
could not escape from the obligation to provide compensation for the dismissal notice.
In the case where there was no reason that made the immediate dismissal possible, no
notice, and no payment of notification benefit, the validity of the dismissal was decided
according to the following concepts: the concept of absolute invalidity, relative invalidity,
choice (the worker could choose to claim for invalid dismissal or to request for compensationin lieu of notice period by accepting the valid dismissal), and the concept of validity.227 If thevalidity of such a dismissal was decided according to the concept of absolute invalidity, therule of Article 114 that allowed the payment of additional money with the request for benefit
of notice became meaningless; on the other hand, if validity of dismissal was according to
the concept of validity, it was an unnatural outcome that among the prohibited regulations of
the Labor Standard Act, only Article 20 did not have enforcement.228 Hence, the case law has
applied the concept of relative invalidity. The Supreme Court ruled that:In the case where the employer does not respect the notice period of the rule in Article
20 of the Labor Standard Act, or notifies the worker about dismissal without paying
benefit of notice, this notice as immediate dismissal is invalid; however, as long as
in the meaning that the employer does not persist/adhere to the immediate dismissal,
when the employer pays benefit of notice of the same article after the elapse of theperiod of 30 days or after notification, it should be interpreted that the validity of
dismissal exists after either occasion.229
While the court applied the concept of relative invalidity, there was a case where it was
unclear if employer had the intention to adhere to immediate dismissal, in which case thedismissal was invalid. 230 For example, Osaka District Court in the case of an ordinary
224

土田 et al., 条文から学ぶ労働法, 32.
君和田伸仁, 問題解決 労働法〈5〉解雇・退職 Problem Solving Labor Law〈5〉Dismissal・
Resignation (旬報社, 2008), 25.
226Tokyo District Court, December 17, 2004, Rouhan, 889, p. 52.
227
君和田, 問題解決 労働法〈5〉解雇・退職, 27.
228
土田 et al., 条文から学ぶ労働法, 33.
229
Supreme Court, March 11, 1960, Minshu, 14–3, p. 403.
230
君和田, 問題解決 労働法〈5〉解雇・退職, 28.
225

55

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

dismissal ruled that:
Even though it is a dismissal taken without respecting the notice period of Article 20 of
the Labor Standard Act, without providing dismissal notice, in the case where it is clearthat the employer does not intent to adhere to immediate dismissal, and if the dismissed
worker requests for payment of benefit of notice, and the employer hurries to pay, taking
the elapse of 30 days from the expression of intention of dismissal, it is interpreted thatthe validity of dismissal exists…The trial in this case is continued on the effect ofimmediate dismissal as the sole point of dispute. Until the end of the trial, there is noexpression of intention to pay benefit of notice at all from the employer. The employer isbelieved to have been preparing enough for the immediate dismissal, and seriously
investigating the inappropriateness of the worker. Hence, it is difficult to say that it isclear that the employer does not have intention to persist with the immediate dismissal.231

3. Statutorily prohibited dismissals
3.1. Period of restricted dismissal
At present, the worker is protected from dismissal during a period of absence fromwork due to injury or disease in the course of employment and for the following 30 days.
However, this rule does not apply to cases where the employer pays compensation for
discontinuance in accordance with Article 81 or in cases where continuance of the enterpriseis impossible due to natural disaster or other unavoidable reasons.232 According to Article 81of the Labor Standard Act, in the case where the worker cannot recover from the injury orillness within three years from the date of commencement of medical treatment, the employer
should pay compensation for the discontinuation of the compensation, equivalent to theaverage wage of 1,200 days.
Article 19 of the Industrial Accident Compensation Insurance Act (1947) considers thatthe employer has paid a compensation for discontinuance pursuant to Article 81 of the Labor
Standard Act when the employer pays the compensation pension on the day when the three
years have elapsed after commencement of medical treatment or starts to pay thecompensation pension after said day.233 In cases of impossible continuance of the company
due to natural disaster or other unavoidable cause, the employer must obtain the approval of
the relevant government agency with respect to the reason in question.234
231

Osaka District Court, September 12, 1995, Rouhan, 688, p. 53.
Labor Standard Act of Japan, art. 19, ¶ 1 (1947).
233 Article 19: Where a worker who has suffered an injury or disease resulting from an employment-relatedcause receives an injury and disease compensation pension on the day when three years have elapsed after thecommencement of medical treatment pertaining to said injury or disease, or begins to receive an injury anddisease compensation pension after said day, for the purpose of the application of the provision of Article 19,
paragraph (1) of the Labor Standards Act, the relevant employer shall be deemed to have paid a compensation
for discontinuance pursuant to the provision of Article 81 of the Labor Standards Act on the day when said
three years have elapsed or on the day when the worker begins to receive the injury and disease compensation
pension, respectively. Industrial Accident Compensation Insurance Act of 1947 (1947).
234
Labor Standard Act of Japan, art. 19, ¶ 2.
232

56

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

In addition, the employer cannot dismiss women during the period of absence fromwork before and after childbirth according to Article 65 of the Labor Standard Act or within
30 days after the end of the period of absence from work.235 According to Article 65, before
childbirth, a worker can be absent from work for six weeks or 14 weeks in case of multiple
fetuses. 236 After childbirth, the worker can be absent from work for 8 weeks. 237 This
protection is not provided in the case of the discontinuance of the company due to natural
disaster or unavoidable cause, and the employer must obtain approval from the Chief ofLabor Standard Inspection Office in order to verify the above reason.238

3.2. Dismissals with discriminatory grounds
Article 3 of the Labor Standard Act prohibits an employer from using discriminatory
treatment with respect to wages, working hours or other working conditions by reason ofnationality, creed or the social status of any worker. Under the Act on Securing of Equal
Opportunity and Treatment between Men and Women in Employment (1972, revised in2006), Article 7 stipulates that an employer cannot take the sex of worker as grounds for
dismissal, or encouragement of retirement, mandatory retirement age, or renewal of the labor
contract.239
Statutory law also prohibits dismissal on discriminatory grounds against union
affiliation and activities. According to the Labor Union Act (1949), Article 7 prohibits theemployer from dismissing the worker on the grounds that a worker is a member of, or has
tried to join or to organize a labor union, or has performed the justifiable actions of a labor
union.240 In addition, Article 28 of the Constitution of Japan also protects this collective rightby stipulating that “the right of workers to organize and to bargain and act collectively isguaranteed.” More importantly, the right to organize, to bargain, and to act collectively are
fundamental rights contributing to and realizing the right to life guaranteed in Article 25 of
the Constitution of Japan.

3.3. Report of violation or request for an inspection body
When an employer violates any provision of Labor Standard Act or Industrial Safety
and Health Act or ordinances under these laws in the workplaces, the worker can report sucha fact to the Director of the Prefectural Labor Bureau or Chief of the Labor Standards
235

Ibid., art. 19, ¶ 1.
Ibid., art. 65, ¶ 1.
237
Ibid., art. 65, ¶ 2.
238
Ibid., art. 19, ¶ 2.
239
Act on Securing of Equal Opportunity and Treatment between Men and Women in Employment, art. 7, ¶ 4(1972).
240
Union Act of Japan, art. 7, ¶ 1 (1949).
236

57

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Inspection Office or to the Labor Standards Inspector and request for appropriate action to
be taken for rectification.241 In this case, the employer cannot dismiss or discriminate against
the worker who has reported the violation of laws to the relevant government agency. There
are three levels of government agencies responsible for matters relating to labor conditions
and the protection of workers: the Labor Standards Management Bureau (Department within
the Ministry of Health, Labor and Welfare), Prefectural Labor Bureaus, and Labor Standard
Inspector Offices.242
In addition, in accordance with the Act on Promoting the Resolution of Individual
Labor-Related Disputes (2004), an employer cannot dismiss a worker who has made requests
for assistance to the Director of the Prefectural Labor Bureau to resolve the individual labor
disputes or to organize mediation. 243 The employer is also prohibited from dismissing aworker who has made a request for assistance to the Director of the Prefectural Labor Bureau
in resolving labor disputes concerning violation of the Act on Improvement of Employment
Management for Part-Time Workers (1993), or violation of the Act on Securing of Equal
Opportunity and Treatment between Men and Women in Employment (1972), or in the casewhere the worker applies for mediation.244
When the worker reports to the competent authorities about the employer’s violationof law, it is undeniably true that the employer at first denies the fact of violation of the law
in the worker’s report and asserts that the dismissal is made according to other reasons. The
dismissal is not the employer’s retaliation against the worker’s report to the authority.
However, if the worker can prove that the real cause of dismissal is related to the report of aviolation of law, the court will reject the assertions of the employer.245

3.4. Dismissal of whistleblower
The Act on Whistleblower Protection (2004) was enacted for the purpose of promoting
compliance with the laws and regulations concerning the protection of life, body, property,
and other interests of citizen and thus contributes to the stabilization of the general welfare of
the life of the citizens and to the sound development of the socio-economy.246 Accordingly,
an employer cannot discharge the whistleblower who reports facts that have occurred or
about to occur by the business operators, other workers, or agencies to the Administrative
Organ or any competent person with authority to prevent the occurrence and damage.247
The courts have a tendency to invalidate dismissals in cases where an employer
executes the above legally prohibited dismissals.248 For example, in the case of dismissal as
241

Labor Standard Act of Japan, art. 104; Industrial Safety and Health Act of 1972, art. 97, ¶ 1 (1972).
Sugeno, Japanese Employment and Labor Law, 102–5.
243
Act on Promoting the Resolution of Individual Labor-Related Disputes, arts. 4, ¶¶ 3 & 5, ¶ 2 (2004).
244 Act on Securing of Equal Opportunity and Treatment between Men and Women in Employment, arts. 17,¶¶ 2 & 18, ¶ 2; Act on Improvement of Employment Management for Part-Time Workers, arts. 21, ¶¶ 2 & 22,¶ 2 (1993).
242

245 君和田, 問題解決 労働法〈5〉解雇・退職, 17.

246

Act on Whistleblower Protection, art. 1 (2004).
Ibid., arts. 3 & 4.
248
Yasuhiko Matsuda, “Dismissal of Workers Under Japanese Law,” Stanford Journal of International Law 20
247

58

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

a result of unfair labor practice, the Supreme Court in 1968 ruled:
For the dismissal according to unfair labor practice, in the old Labor Union Act (Law
No. 51 of December 22, 1945), Article 11 prohibited unfair labor practice, and Article
33 stipulated the penal regulation against the violating employer. However, the present
Union Act (Law No.174 of June 1, 1949), Article 7 No. 1, prohibits unfair labor practice.
Even though it is a violation of the prohibition, it does not punish the employer
immediately. When the order of restoration of the present conditions of the labor
relation commission against the employer is supported according to the confirmed
decision of the court, it is firstly the object of punishment if the employer still does notfollow this order. However, because the regulation on the prohibition of unfair labor
practice derives from Article 28 of the Constitution, which is the regulation on the
purpose of protection of the right to organize and the right to act collectively of theworker, from the purpose of this article, the action violating this article naturally must
be interpreted as invalid according to the old and present law. In the present law,
immediately, the concerned conduct is not the object of punishment, it is said that
because there is the system of remedy order according to the labor relation commission,
it is inappropriate to interpret that the present law differs from the old law.249

3.5. Dismissal on grounds of marriage, pregnancy or childbirth
The Act on Securing of Equal Opportunity and Treatment between Men and Women in
Employment (1972) prohibits an employer from dismissing female workers for reasons ofmarriage, pregnancy, childbirth, or requests for absence from work before childbirth asprovided by Article 65 of the Labor Standard Act250 or requests for absence after childbirth.251
In addition, paragraph 4 of Article 4 of the same law invalidates the dismissal of women
workers who are pregnant or in the first year after childbirth. However, the exception to thisprotection would be if the employer can prove that the dismissals were made based on otherreasons. Accordingly, in disputes over such terminations, the women workers need to provethat they were pregnant at the time of dismissal, and they were in the first year after childbirth
while an employer has to prove that there is no relationship between the firing and thepregnancy.252 If an employer cannot prove that the dismissal took place for other reasons
other than pregnancy or absence for childbirth, the dismissal is invalid by law.
(1984): 458–61.
249
Supreme Court, April 09, 1968, Rouminshu, 22–24, p. 845.
250 Article 65: In the event that a woman who is expected to give birth within 6 weeks (or within 14 weeks inthe case of multiple fetuses) requests leave from work, the employer shall not make her work.
(2) An employer shall not have a woman work within 8 weeks after childbirth; provided, however, that thisshall not prevent an employer from having such a woman work, if she has so requested, after 6 weeks havepassed since childbirth, in activities which a doctor has approved as having no adverse effect on her. Labor
Standard Act of Japan (1947).
(3) In the event that a pregnant woman has so requested, an employer shall transfer her to other lightactivities.
251
Act on Securing of Equal Opportunity and Treatment between Men and Women in Employment, art. 9, ¶¶2&3 (1972).
252
君和田, 問題解決 労働法〈5〉解雇・退職, 18.

59

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Furthermore, a dismissal due to absence from work for childcare is not allowed. The
Act on the Welfare of Workers Who Take Care of Children or Other Family Members
Including Child Care and Family Care Leave (1991), Article 10 and 16, protects workers
against dismissal when they apply for or take child or family care leave.
Before 2003, even though there was a requirement for a prior notice period andprohibition of certain dismissals, there was no statutory rule restricting the dismissal to takeplace with just cause. Thus, employers could discharge workers freely as long as they
complied with dismissals as per the restrictive regulations in the Labor Standard Act andLabor Union Act, and other regulations mentioned above.

4. Rule of abuse of right4.1. Judge made rules restricting dismissals
The 1950s saw the development of judicial rules that provided job protection to theworkers when there was an increase in disputes over the legality of dismissals. There was noagreement among the courts regarding the rule governing dismissals in the early 1950s. First,
some lower courts applied the rule of freedom of dismissal. For example, in 1951, theMatsuyama District Court stated that an employer could fire the worker freely without any
reason after a notice period of 30 days or immediately by compensation in lieu of the notice
period as long as the employer did not violate Article 19 of the Labor Standard Act relating
to workers who were on maternity leave or work-related injuries.253
Second, the courts required dismissal to be taken with a valid reason. For example, theTokyo District Court in 1950 ruled:
Dismissal in this case is invalid, as it is not based on reasonable grounds. Generally,
the employer can dismiss the worker freely as long as the employer does not violate
the laws, collective agreements, or rules of employment. However, (1) in considerationof the commonality of the enterprise, the employer’s right to personnel management
has to be exercised in the method that promotes the productivity of the enterprise. The
exercise of the personnel management is not accepted when it invades the productive
activities of the worker under the standard of productivity or the right to life of theworker. (2) Because the worker has the right to work [according to this meaning,
workers select the jobs and provide labor force under the most advantageous condition,and maintain their lives. It is the right to be released from other invasion and to continue
the employment relation], the dismissal that violates such a right is not allowed.
Therefore, it is appropriate to interpret that based upon the social common sense; theemployer can dismiss the worker reasonably as long as there is proper reason. Such aworker does not contribute to the productivity of the enterprise, and the worker disturbs
the whole coordinated order of the business.254
Third, the courts restricted an employer’s freedom of dismissal by applying theprinciple of abuse of right found in Article 1(3) of the Civil Code.
253
254

Matsuyama District Court, February 08, 1951, Rouminshu, 50, p. 68.
Tokyo District Court, May 08, 1950, Rouminshu, 1–2, p. 230.

60

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

For example, the Nagoya District Court ruled in 1951:
In employment relations, a dismissal as an announcement that differs from thecancellation of contract is the freedom of the employer. However, even though it is theexercise of the right, when it violates the principle of good faith or honesty, it iscertainly not allowed because it is an abuse of the right. This principle is not different
even in the employment relationship. Probably, the worker generally receives income
from employment as the only wage mostly for living. When immediate dismissal istaken, the worker cannot easily find other employment. In contrast to the worker whose
livelihood is almost jeopardized by the dismissal, the employer finds it comparatively
easier to find other workers. Therefore, it is mostly an abuse of right when there is no
appropriate reason attached to the dismissal…255
Among the rules governing dismissals, the rule of freedom to discharge allows
employer to fire the worker without paying attention to any grounds whereas the rule of valid
reason and the rule of abuse of right restricts the employer’s right to dismissal. The
differences between the rule of valid reason and the rule of abuse of right are as follows.
According to the rule of valid reason, dismissal is not an original or natural freedom of theemployer and takes place only in the case where there is reasonable ground or just cause.256
On the other hand, under the rule of abuse of right, the employer has the right to dismiss but
is restricted when there is an abuse in the exercise of this right. The difference between the
two also places the burden of proof on the existence of valid reason and the abuse of right.257
According to the rule of valid reason, the employer carries the burden of proof to show that
he has a reasonable ground for dismissal. In contrast, according to the rule of abuse of right,
the burden of proof belongs to the worker who alleges that the employer has abused the rightto dismissal.
From the beginning of the 1960s, most of the courts only applied the principle of abuseof right to provide job security to the workers.258 The shift from the rule of valid reason to
the rule of abuse of right was because the former was developed without any legal basis while
the latter was developed based on the general principle in the Civil Code and finally aimed
for the same restriction as the rule of just cause did. Moreover, in Japan, the rule of just cause
contradicts the Civil Code and the Labor Standard Act where an employer has discretion or
freedom over dismissals.
In 1975, the Supreme Court upheld the rule of abuse of right in the case of Nihon
Sokuen by deciding that even the exercise of the employer’s right to dismissal, if it lacked
objectively reasonable grounds and could not be accepted as proper under the common idea,
was invalid as an abuse of right.259 In this case, a dismissal took place after a worker was
expelled from a union. According to the union shop agreement, the employer had a duty todismiss the worker who was expelled from the union. However, if the expulsion from theunion was invalid, the employer had no duty to dismiss the concerned worker. The employer
255

Nagoya District Court, December 04, 1951, Rouminshu, 2–5, p. 578.
浜村彰 et al., ベーシック労働法 第 3 版 Basic Labor Law 3rd Edition, 第 3 ed. (有斐閣, 2008), 209–10.
257
池田, 解雇の法的問題, 52.
258
大内伸哉, 山川隆一, 解雇法制を考える : 法学と経済学の視点 Thinking the Legal System: The View
Point of Law and Economics, ed. 大竹文雄 (東京: 勁草書房, 2004), 6.
256

259 Supreme Court, April 25, 1975, Minshu, 29–4, p. 456.

61

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

could only dismiss the worker when there were objectively reasonable grounds and dismissal
could be accepted as proper from the social conscience. Finally, the court judged thatdismissal was as an abuse of right because there were no other reasonable grounds, except
the invalid expulsion.
In 1977, the Supreme Court confirmed the content of the rule of abuse of right todismissal in the Kochi Hoso case by emphasizing two main requirements: “the objectively
or concretely reasonable ground” and the “appropriateness of dismissal based on the social
common sense.” For example, the Supreme Court ruled that:…even in the case where there is ground of disciplinary dismissal, the employer cannot
always dismiss. Under the particular concrete circumstances, when the execution of
dismissal is remarkably unreasonable and cannot be accepted as proper under the social
common sense, the expression of intention of particular dismissal becomes invalid asabuse of right.260
Regarding burden of proof, there is a relationship between the rule of just cause andthe rule of abuse of right. According to the rule of just cause, where dismissal does not takeplace unless there is a just cause, the employer has an obligation to prove the existence of avalid reason. This rule simply means the right of the employer to dismiss depends on theexistence of a valid reason. Thus, the employer has to prove just cause in order to dismiss a
worker.
On the other hand, according to the rule of abuse of right, where the employer has theright to dismiss the worker and this right is prohibited only there is abuse of such a right, theworker has the obligation to prove this abuse of right. However, since the requirement of
reasonable ground or just cause becomes a part of the content of rule of abuse of right in adismissal, the employer in reality has the obligation to prove the existence of reasonablegrounds in order to the deny the worker’s claim.261 There is a trend in the Supreme Court thatthough the explanation was made in the form of the doctrine of abuse of right to dismissal,
because the doctrine has turned inside out the theory that discharge needs reasonable grounds,
the doctrine of abuse of right in real practice has not differed greatly from the theory of valid
reason.262 Accordingly, there is the transfer of the burden of proof to the employer who has
to prove that the existence of grounds for dismissal in the rules of employment, grounds for
dismissal according to actual misconduct, poor ability or the health condition of the workers;
whereas, the worker only needs to prove the existence of the employment contract, enoughworking ability and a good health condition.263

4.2. Incorporation of judicial rule into laws
There were many views supporting the legislation of dismissal law. According to
Yamakawa, there were two different supporting viewpoints regarding the legislation
260

Supreme Court, January 31, 1977, Rouminshu, 268, p. 17.
大内, 山川, 解雇法制を考える, 92.
262
土田道夫, 豊川義明, 和田肇, ウォッチング労働法, 法学教室 Watching Labor Law (東京: 有斐閣,
2009), 226.
263
Ibid.
261

62

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

governing dismissal. 264 The first view was that the legislative measures to deal witheconomic dismissal were proper because the judicial standard not only made it difficult topredict the legality of discharge but also deterred employers from creating new employment
opportunities due to inflexible and difficult rules. The second view was that legislation wasvery important for rules on dismissal with content that protected workers from dismissal
without reasonable grounds and to improve the procedural rules for dismissal. These twodifferent viewpoints influenced the content of the legislation for dismissal law.
During the amendment of the Labor Standard Act in 2003, there was an intense debate
over the content of the dismissal rules due to the different opinions of the employers andworkers. The draft of Article 18-2 of the Labor Standard Act stated, “[T]he employer may
dismiss workers except in cases where the exercise of the right to dismiss is restricted by theprovisions of this law or other laws. However, a dismissal shall be considered an abuse ofright to dismiss and therefore null and void if it is not based on objectively reasonablegrounds and may not be recognized as socially acceptable.”265
The workers’ representatives strongly criticized the draft article as the first sentencestressed the employer’s right to dismiss and placed the burden of proof regarding theexistence of valid reason/abuse of right to the worker.266 Finally, the judicial rule stating that“the exercise of the employer’s right to dismiss, if it lacks objectively reasonable ground andcannot be accepted as proper under the social common idea, is invalid as abuse of right” wasincluded in Article 18-2 of the Labor Standard Act.
Under the traditional rules for economic dismissal, a termination is void even when theemployer cannot fulfill one of four requirements. These requirements are (1) the necessity of
personnel reduction, (2) administration of effort to avoid the dismissal, (3) reasonable
selection of workers for dismissal, and (4) the administration of explanation or consultation
with the union or use of appropriate dismissal procedures. However, since 2000 many district
courts started to relax the interpretation of the principle of abuse of right in the case of
economic dismissal. For example, the Tokyo District Court ruled in 2000 that even though
there was a claim that abuse of right in the case of adjustment dismissal was decided
according to the four requirements, the four requirements were typified with factors deciding
whether an adjustment dismissal was an abuse of right.267
Moreover, there was no legal requirement for any of the requirements, there was nolegal effect, and the abuse of rights was judged through consideration of all individual
concrete cases.268 Accordingly, the rule involving the four factors does not require employers
to follow all four requirements. The refusal of the incorporation of the four requirements as
the criteria for the abuse of right rule in the case of economic dismissal led to an allegation
264

Foote, Law in Japan, 506.
Ibid., 507–8.
266
Under the Civil Code, the employer can dismiss the worker for any reason. However, there was noprovision requiring just cause for dismissal. Therefore, the incorporation of the employer’s right to dismiss inthe Labor Standard Act made strong emphasis that this right was reinforced. In addition, in the practice ofcourts, the employer had a burden of proof for the dismissal. When the requirement of just cause for dismissal
was placed in the second paragraph, the draft article may imply that it was the worker who had the burden of
proof because the employer normally had the right to dismiss. Hiroya Nakakubo, “The 2003 Revision of theLabor Standard Law: Fixed-term Contracts, Dismissal and Discretionary-work Schemes,” Japan Labor
Review, Japan Institute for Labor Policy and Training (2004): 15–18.
267
Tokyo District Court, January 21, 2000, Rouhan, 782, p. 23.
268
Ibid.
265

63

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

that the Koizumi Cabinet intended to relax case law because they thought that this rule was
too rigid and consequently hindered the structural changes needed for the mobilization of thework force.269
On the other hand, the labor policy commission introduced monetary compensation toemployers and worker’s representatives during the amendment of the Labor Standard Act.
This proposal was made due to the fact that having to wait long for a judgment madeemployer and the worker difficult in maintaining their employment relationships and to thefact that the worker’s skill became out of date.270 The proposal gave authorization to the court
to terminate the employment relations upon a request by either the employer or worker if therelations had been worsened beyond repairable and to make the employer pay a certain
amount of monetary compensation.271
However, there was strong opposition from labor who insisted “it would be scandalous
if employers who had resorted to invalid dismissal were afterwards allowed to seek
termination of contracts by such means.”272 Finally, there was no incorporation of monetarycompensation into the Labor Standard Act. Only judicial principle was incorporated into the
Labor Standard Act in 2003 while the rules regarding economic dismissal and monetarycompensation of invalid dismissal remained under the regime of case laws.
Unlike other provisions in the Labor Standard Act, which require an employer’s
compliance under the punitive measure through monitoring by the Labor Standard Inspector,
Article 18-2 is under civil action.273 Under Article 18-2 of the Labor Standard Act, a worker
who opposed a dismissal by an employer had to file a lawsuit at the court. When there wasan enactment of the Labor Contract Act in 2007 which was a private law, the rule of abuse ofright to dismissal in Article 18-2 of the Labor Standard was replaced by Article 16 of theLabor Contract Act.
Article 16 states that “A dismissal shall, if it lacks objectively reasonable grounds andis not considered to be appropriate in general societal term, be treated as an abuse of rightand be invalid.” Therefore, the legislation of dismissal rules is simply a codification of the
judicial principle for termination.274 As with the Labor Standard Act, the Labor Contract Act
specifies the content of dismissal law in general and abstract terms. Therefore, the court again
has discretion to determine whether a dismissal is based on “objectively reasonable ground”
and “socially accepted standards.”
Considering the fact that dismissal law in Article 18-2 and Article 16 is a copy ofpreexisting case law and according to the doctrine of abuse of right of dismissal where thejudge has discretion to determine whether a discharge is an abuse of right, this rule already269

Takashi Araki, “Corporate Governance Reforms, Labor Law Developments, and the Future of Japan’s
Practice-Dependent Stakeholder Model,” Japan Labor Review, Japan Institute for Labor Policy and Training
2–1 (Winter 2005): 40.
270
Nakakubo, “The 2003 Revision of the Labor Standard Law: Fixed-term Contracts, Dismissal andDiscretionary-work Schemes,” 17.
271
Ibid.
272
Ibid., 18.
273
Ibid., 15.
274
Ryuichi Yamakuwa, “The Enactment of the Labor Contract Act: Its Significance and Future Issues,” Japan
Labor Review, Japan Institute for Labor Policy and Training (2009): 508.

64

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

exists in Article 1(3) of Civil Code. Because the general principle of abuse of right in the
Civil Code is so abstract, ordinary people find it hard to comprehend that a dismissal requires
just causes; and the incorporation of the “abuse of right” into legislative measures is just theconfirmation or clarification.275

5. Certificate on occasion of retirement or dismissal
The Labor Standard Act (Article 22) requires employers to issue a certificate without
delay on the occasion of the retirement of a worker. This regulation aims to help workers inseeking new employment.276 The worker can request a certificate that includes the period of
employment, kind of occupation, position in the workplace, wage, reason of retirement, andreason of dismissal. 277 In addition, during the period from the day when the notice ofdismissal has been provided until the day of retirement, in the case where the worker requests
a certificate corresponding with the reason for the concerned dismissal, the employer mustissue the certificate without delay. However, in the case where the worker retires after the
day of the notice of dismissal according to reasons other than those for the concerned
dismissal, it is not necessary for the employer after said day of retirement to issue thatcertificate.278
A regulation was established during the amendment of the Labor Standard Act in 1998
to include the rule that controlled unfair dismissal by requiring an employer to show grounds
for dismissal. However, because request by the worker was included as the condition in theregulation of “certificate of retirement” so as to contribute to the re-employment of theworker, it was very difficult to understand the characteristics of the dismissal rule.279 During
the amendment process in 2003, an additional rule was necessary to control the period fromthe notice of retirement or dismissal until the day of retirement or dismissal.
The certificate of retirement plays an important role in the process of litigation
concerning dismissal. In cases where dismissal grounds are written in the certificate ofdismissal, there is a question as to whether or not an employer can dismiss the worker onother grounds after issuance. In theory, the function of the certificate of dismissal must be
respected; therefore, the employer cannot claim for that the dismissal grounds that weredifferent from those in the certificate during the procedures for a dispute over dismissal.280

275

Nakakubo, “The 2003 Revision of the Labor Standard Law: Fixed-term Contracts, Dismissal andDiscretionary-work Schemes,” 14.
276
Ibid., 19.
277
Labor Standard Act of Japan, art. 22, ¶ 1 (1947).
278
Ibid., art. 22, ¶ 2.
279
中窪裕也, 野田進, 和田肇, 労働法の世界 The World of Labor Law (東京: 有斐閣, 2011), 423.
280
土田 et al., 条文から学ぶ労働法, 34.

65

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Section 2: Determinants of the abuse of right to dismissal
1. Laws
Japan does not have a code that gathers all regulations on employment relations. Since
the end of World War II, a number of individual texts of law were enacted to deal with theissue of employment relations. Accordingly, the issue of dismissal is resolved in various laws,
such as Labor Standard Act, Labor Union Act, Labor Contract Act, and other legislative texts.
In addition to the above laws that directly deal with labor and employment relations, theprinciples in the Civil Code and the Constitution also have much influence on the decisionof the courts when resolving disputes over dismissal. Furthermore, the Labor Standard Act
entitles employers to create rules of dismissal in the rules of employment that fit with thecharacteristic nature of the operation of their company.

2. Internal work rules, collective agreement, and employment contract
The rules of employment, collective agreements and employment contracts play animportant role in determining whether a dismissal is an abuse of the right. One of the reasonsfor their influence on the rule on dismissal is that the Labor Standard Act requires employers
and workers to abide by the rules of employment, collective agreements and employment
contracts and to fulfill their duties in good faith.281 Most of the working rules set the clauses
relate to reasons or conditions of dismissals.282 Article 89 of the Labor Standard Act requires
employers who employ ten or more workers to draw up internal work rules which include
ten items, including working hours, method of wage payment, retirement (dismissal), mattersconcerning retirement allowance, and others as set in the same article. Item 3 of this article
demands an employer to include “matters pertaining to retirement (including grounds for
dismissal)”283, and it is in the new revision of Article 89 after the amendment of the Labor
Standard Act in 2003.
Before the amendment in 2003, item III mentioned only “matters pertaining toretirement” and the term “retirement” had many interpretations such as resignation by theworker, dismissals by the employer, mandatory retirement at a prescribed age, and expirationof the term of an employment contract.284 This amendment made it clear that the employer
must draw up the rules for termination by adding the word dismissal in brackets next to theword retirement. Accordingly, an employer can dismiss workers according to the reasons
281

Labor Standard Act of Japan, art. 2, ¶ 2.
Clause 56, paragraph 1, number 4 regarding dismissal in the internal work rule of a private hospitalprovides that “when there is unavoidable reason based on the necessity of the business of the hospital, thehospital can dismiss the workers.” Osaka District Court, October 20, 1995, Rouhan, 685, p. 49; The internal
work rule of the company, particularly Clause 52, No. 8, stipulates, “Dismissal can be taken according to theground relating to the unavoidable business convenience.” Rouhan, 330, p. 71.
283
Labor Standard Act of Japan, art. 89 (iii).
284
Nakakubo, “The 2003 Revision of the Labor Standard Law: Fixed-term Contracts, Dismissal andDiscretionary-work Schemes,” 18–19.
282

66

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissalprescribed in the rules of employment.
Regarding the requirement to list the reasons for dismissal, there are two different
interpretations of the right of the employer. On the one hand, the employer can dismiss theworker on grounds which are not listed in the rules of employment. This view is based on theconsideration that the employer has the right to dismissal. In the National Westminster casein 2000, the rules of employment of the company enumerated grounds for dismissal such as
violations of the rules of the workplace, lack of ability, and any offence by the worker. The
worker in this case claimed that the dismissal could not take place according to the groundof economic necessity which was not listed in the rules of the employment. In this case,Tokyo District Court ruled that:
Based on the present laws, it is appropriate that ordinary dismissal is according to theprinciple of freedom of dismissal. However, because dismissal is invalid in the limit of
the case where dismissal is an abuse of right to dismissal, even though there is no factcorresponding to the ground of ordinary dismissal in the rule of the employment, theemployer can terminate the employment contract as long as employer has concretely
reasonable ground and dismissal is not an abuse of right. If according to this reason,even though it is the case where the employer enumerates the grounds of ordinary
dismissal in the rule of employment, except the case where there is a clear special
circumstance of restrictive enumeration, it is appropriate to interpret in the meaning of
exemplification enumeration.285
Therefore, the employer can dismiss workers on grounds that are not prescribed in therules of employment.
On the other hand, another point of view prohibits the employer from dismissing theworker on grounds that are not prescribed in the rules of employment.286 The enumerationof the grounds of dismissal in the internal work rules of the company is the duty of theemployer, which is required by the Labor Standard Act (Article 89). In addition, the basis of
this interpretation is that the content of rules of the employment becomes the content of thecontract of employment. Even though the Labor Standard Act requires an employer to clarify
working conditions in an employment contract,287 in Japan, employers and workers usually
do not make their written contract to include descriptive content because rules of employment
regulate working conditions.288
According to Article 7 of the Labor Contract Act, when the employer and worker
conclude an employment contract, if the employer has informed the workers about the rulesof employment that provides for reasonable working conditions, the content of such rules of
employment becomes the content of the employment contract of the parties. As the rules of
employment are the contents of the contract, the employer cannot dismiss workers on
grounds that are not prescribed in the rules of employment.
It is worth noting that the two interpretations of Article 89 (3) of the Labor Standard
285

Tokyo District Court, January 21, 2000, Rouhan, 782, p. 23.
Ouchi, “Special Topic: Change in Japanese Employment Security: Reflecting on the Legal Points.”
287
Labor Standard Act of Japan, art. 15.
288
Takashi Araki, “Legal Issues of Employee Loyalty in Japan,” Comparative Labor Law and Policy Journal
20 (1999 1998): 269.
286

67

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Act seem to be pointless to the discussion when most of the rules of employment provide ageneral clause such as “other reason or reasons similar to those listed above” in addition to
the lists of reasons for dismissal. 289 However, even though reasons for dismissal areprescribed, this does not always mean that the employer can dismiss workers without
consideration of the rule of the abuse of right to dismissal.
The validity of a dismissal may also rely on the procedural clauses set in the rules of
employment and the collective bargaining agreement. In the collective agreement, there will
be a clause that requires an employer to consult and to obtain agreement from the union whenthe employer wishes to change the status of members, position, or working condition. In
addition, in the rules of employment or the collective agreement, there will also be a rule that
requires a process of interrogation of the workers or discussion with the personnel committee,
especially the committee that is in charge of rewarding and punishing workers when an
employer wishes to punish or dismiss the workers. Moreover, when the reasons for dismissals
are enumerated or restricted in the collective agreement, the regulation has legal effect as thecontent of the employment contract, and a dismissal on grounds other than those listed in thecollective agreement is invalid.290
Generally, a dismissal is invalid when it violates the rule mentioned in the rules of
employment or collective agreement. Article 16 of the Labor Union Act reads:
Any part of an individual labor contract contravening the standards concerning working
conditions and other matters relating to the treatment of workers provided in thecollective agreement shall be void. In such a case, the invalidated part of the individuallabor contract shall be governed by those standards. With respect to matters as to which
the individual labor contract does not provide, the same shall apply.291
According to this Article 16, the Union Act empowers collective agreement to set therule of dismissals and the court according to this rule decides the invalidity of a dismissal
that violates the rule of the collective agreement where a dismissal is required to take placewith reason.292

3. Employment practice
The employment practice is also one of the factors that shape the rules of abuse of rightin dismissal. The tradition of employment practice in large Japanese companies ischaracterized by lifetime employment, seniority based wage, and enterprise based unions.293
Among the three features, lifetime employment has a closer relationship to the decision of289

君和田, 問題解決 労働法〈5〉解雇・退職, 20–21.
This is application of Article 16 of the Union Act 浜村 et al., ベーシック労働法 第 3 版, 208.
291
Union Act of Japan, art. 16 (1949).
292
Fumito Komiya, “Dismissal Procedures and Termination Benefits in Japan,” Comparative Labor Law
Journal 12 (1991 1990): 155..
293
野村正実, 日本的雇用慣行 : 全体像構築の試み Japanese Employment Practice : Trying to Build An
Overall Picture, Minerva 人文・社会科学叢書 (京都: ミネルヴァ書房, 2007), 95.
290

68

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

courts in restricting the employer’s right to dismissal. Lifetime or permanent employment is
the practice of employment of large enterprises where fresh gradates, regardless of their level,
start their work, upgrade their skills and knowledge through inside training, and stay in thesame enterprise until they reach the age of retirement set by the company (55).294
James C. Abegglen, an American social scientist revealed the employment practice inJapan in his book entitled “The Japanese Factory” in 1979. At that time, the most importantdifference between employment relationships in the USA and Japan was the commitment forlifetime employment relationships between employers and workers.295 The employer did notdismiss the worker unless there was an unavoidable cause and the worker did not leave hisor her employer to work for other companies. Abbeglen compared such a lifetime
employment relationship in the Japanese factory to that of the family business in the USA
where an employer treated his workers as members of the family.296
Japanese management justified this commitment to a permanent relationship in thematter of dismissals or layoffs on the grounds that it was a matter of national concern, andclaimed that Japan was “a poor country and an overpopulated one, a country where jobs are
scarce and employment difficult. Laid-off or dismissed workers will simply starve, theargument goes, because they will be able to find no other work.” 297 The Japanesemanagement thought there was a closed interrelation between the policy of business and thenational welfare in Japan whose economy survived from export and import activity.298 In
addition, there was loyalty to the overall group and reciprocal responsibility where employers
had to refrain from discharging the worker until the end of their time in the business and theworker had to work in the company.299 The system of factory organization in Japan consistedof the commitment to permanent employment which had an interrelationship with methodsof recruitment, incentives and rewards.300
There was a close relationship between the system of recruitment and the level of
education in Japan. For example, Koin (person who works) were a group of workers who
were wageworkers with a minimum education, while Shokuin (person in charge) were agroup of workers who were the salary workers or managers of the company and in the lower
levels had a high school education and in the top ranks, were college graduates. 301 The
personnel department of the main or parent companies selected and distributed workers, both
Koin and Shokuin, to the local plant or companies.302 October was the examination monthwhen the companies recruited new workers who graduated in spring.
The system of incentives varied in each company. Wage payment was one of themethods in the promotion of incentives for workers in devoting their effort to the outcome of294

Robert E. Cole, “Permanent Employment in Japan: Facts and Fantasies,” Industrial and Labor Relations
Review 26 (1973 1972): 615.
295
James C. Abegglen, The Japanese Factory, Perennial works in sociology (New York: Arno Press , 1979,
1979), 11–25.
296
Ibid., 11.
297
Ibid., 15.
298
Ibid., 15–16.
299
Ibid., 17.
300
Ibid., 25.
301
Ibid., 29.
302
Ibid., 30.

69

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

the factory. Allowances for work, attendance, family, job rank, and regional allowances wereadded to the basic wage though these elements did not relate to the workers’ performance or
the output of the companies.303 Hence, the workers had large amounts of wage. In addition
to monetary and non-monetary allowances, most large companies in Japan conducted asystem of retirement that set the age of retirement and rewarded the workers according to thelength of their service in the company, and the system of bonus that was a part of the wage
and which was provided twice a year in mid-summer and at the end of the year.304
Regarding the scope of protection against dismissal, one of the criticisms is that only
regular employees in large firms enjoy the job security while regular employees in small
firms face poor working conditions, high possibility of bankruptcy, uncertainty of production
demand, and a shortage of capital fund.305 However, the long-term employment practice,though it applies only to the regular workers in a few large enterprises, is the traditional
employment practice in Japan that influences the decision of the courts restricting theemployer’s right to dismissal according to the rule of abusive dismissal.306 For example, theTokyo Higher Court in 1979 ruled that:
The decision to close a section of the company is a company’s discretion and freedom;
however, the employer naturally does not have freedom to dismiss the worker in thatclosed section. This is because in Japan the employment relationship has its foundationon the principle of long-term employment that customarily plans for the long-term
livelihood based on permanent and stable employment relations.307
The courts applied the rule of abuse of right to dismissal that made discharge as the lastresort even in the case of economic dismissal. Such a restriction on the dismissal has
protected workers from poverty and secured them in their jobs until they reach retirementage. In Japan, in 2010, regular workers who received protection against dismissal accounted
for 65.7 percent while irregular workers who did not get such protection accounted for34.3.308
Section 3: Types of reasons for dismissal
In Japan, most of the disputes on dismissals concern the question whether or not theemployer abuses the right of dismissal. However, the rules concerning abuse of the right todismissal just provide the abstract requirements of “objectively reasonable grounds” and“appropriateness in general societal terms.” In this section, there is an examination of what
constitutes objectively reasonable ground and makes the dismissal as appropriate based onsocial consciousness. Since the courts developed the judicial rules concerning employer’s
unilateral termination of contract, the review on the decisions of the courts is of great
importance to understand the detailed rules on the abuse of right to dismissal.
303

Ibid., 48–52.
Ibid., 58–60.
305
Cole, “Permanent Employment in Japan,” 617.
306
Komiya, “Dismissal Procedures and Termination Benefits in Japan.”
307
Tokyo High Court, October 29, 1979, Rouhan, 330, p. 71.
308“Japanese Working Life Profile 2011/2012- Labor Statistics” (The Japan Institute of Labour Policy andTraining, 2011), 33.
304

70

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

1. Dismissal based on worker’s capacity
Lack of capacity and loss of ability due to sickness or injuries are the reasonablegrounds for employers to dismiss workers. Here firstly, there is an overview of the rules for
dismissal based on a worker’s capacity shortage or poor knowledge, which leads to poor
working results. Secondly, there is an overview of the rules concerning dismissal grounds
involving the loss of working ability due to sicknesses or injuries, which are not work-relatedones, but are related with private causes.

1.1. Dismissal on grounds due to lack of capacity
1.1.1. Unusually low ability according to appropriate performance evaluation
Companies regulate the rules of employment with clauses regarding dismissal grounds,
such as “worker has remarkably poor service without good faith in duty,”309 “the employer
recognizes that the worker does not suit with the duty because of result of work and efficiency
is poor,”310 “working ability is poor and there is no expectation of improvement,”311 and“there is no expectation of skill development.” 312 Disputes concern whether or not the
grounds raised by an employer correspond with the grounds for dismissal in the clauses of
the rules of employment.
The validity of dismissal relies not only on the existence of the grounds, which is theinterpretation of clauses in the rules of employment but also on the requirement that theemployer’s termination of a contract is an appropriate measure considered from the social
common sense. The courts examine the appropriateness of the method of evaluation on
personnel performance before concluding whether or not a worker’s poor ability or
unsatisfying achievement falls into grounds for dismissal. The courts decide theappropriateness of the methods of evaluation of the worker’s performance according to thereal conditions of each case. The following courts’ decisions are examples of rules on thevalidity of dismissal based on the worker’s poor capacity or bad achievement.
There is a tendency in the judicial rules to uphold the validity of dismissal on the
grounds of unusually poor capacity or achievement by the worker.313 For example, a company
fired a worker based on the grounds in the rules of employment that a dismissal would takeplace when the working ability was low and there was no expectation of improvement.314
309

Tokyo District Court, December 22, 2003, Rouhan, 871, p. 91.
Osaka District Court, November 29, 1991, Rouhan, 599, p. 42.
311
Tokyo District Court, October 15, 1999, Rouhan, 770, p. 34.
312
Osaka District Court, March 22, 2002, Rouhan, 832, p. 76.
313
君和田, 問題解決 労働法〈5〉解雇・退職, 49.
314
770 Rouhan 34.
310

71

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

The worker’s working ability was in grade C and did not reach the average standard andranked under 10 percent among the workers of the company. However, the performance
evaluation of personnel was a relative evaluation and not an absolute evaluation. 315
Accordingly, the court ruled that it was not proper to immediately judge that the working
efficiency was unusually low and that there was no expectation of improvement. At the sametime the company advised the worker to retire from the company, also advised another 55
workers with low ranks in the performance evaluation to retire and these 55 workers agreed
to resign.
Taking such relative evaluation as the premise, if the advice for retirement given to aparticular proportion of the workers was repeatedly done every year, although it was clearthat the standard of workers had improved as a whole, any worker in the lowest 10 percent
would automatically incur a low-mark performance in the evaluation. Therefore, even though
the workers improved their performance, the company could dismiss a particular proportionof workers every year.
In reference to the rules of employment, which mentioned about when the working
ability was low and there was no expectation of improvement, the employer took the relativeevaluation as the premise for dismissal. However, the court did not accept this dismissal of
workers with a relatively low rank of performance evaluation. The court strictly interpreted
low working ability as being an unusually low working ability with appropriate and evenstrict methods of performance evaluation.
In another case decided by the Nagoya District Court in 2003, the court examined theindication and content concerning the fulfillment of duty of a company towards a worker andinvalidated the dismissal because there was no recognition that the worker had an unusuallypoor performance.316 In a letter notifying the dismissal, the employer wrote that the reason
for discharge was that the worker could not achieve the sale target that was 4 million Yen permonths. The company established a target of increasing sales after negotiation with the unionon July 10, 2000. During the period of one year and ten months (from August 1, 2000 to May
31, 2002), the worker’s real result of total sales of 2,924,224 Yen showed a clear poor work
achievement. The amount of total sales of 2,924,224 Yen in average was less than 1,32,919
Yen per month, which was very far from the sales target of 4,000,000 Yen per month.
The court examined the records of sales of companies that did not exceed 134,897 Yen
per month and concluded that the establishment of the target 4,000,000 Yen per month was
unreasonable. In addition, when compared with the sales achievement of other workers, theamount of sales for the dismissed worker was only a bit lower than that of other workers.
Regarding the sale of new shops during the period from June 1, 2001 to May 31, 2002, thesale achievement of dismissed worker was 182,700 Yen per month. In addition, there were
workers whose sale achievements were lower than that of the dismissed worker, such as
166,000 Yen, and 46,000 Yen. Although there were a lot of workers who achieved sales
315

The company conducted the performance evaluation of personnel to all workers excluding officers threetimes a year: in March, in May, and in February. Performance evaluation for salary increase was on Marchwhile evaluation for bonus was on May and February. Items for performance evaluation in the case of salary
increase were 30 points of work result, 45 points of demonstration ability, and 25 points of working attitude,
in total 100 points. Ibid.
316
Nagoya District Court, February 05, 2003, Rouhan, 848, p. 43.

72

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

higher than the dismissed worker, such as 290,000 Yen to 594,000 Yen, these were notextremely large in number. The work result of the worker was not unusually poor in this case.

1.1.2. Dismissal avoiding measures: possibility of education/training or transfer
Even when there is a problem of worker’s ability, the dismissal cannot immediately
take place. Before firing the worker, the employer has to take measures to avoid dismissal,
such as education training or transfer of the worker to other tasks in light of his or her
ability.317 According to the Tokyo District Court’s decision in 2001, even though there wasa reason for ordinary dismissal based on the internal work rules (Article 53, Paragraph 1, No.
3 where the dismissal takes place in a situation where the working ability had gotten
remarkably worse and it is an obstacle or hindrance on the company’s business efficiency),
the employer cannot always dismiss the worker.318 Under particular concrete circumstances,
if the choice of dismissal is noticeably unreasonable and unacceptable based on social
common sense, the employer’s expression of intention of dismissal is an abuse of right andinvalid. Especially, under the long-term employment system where workers continuously
worked until retirement age, dismissal on the grounds of unsatisfying achievement or badworking attitude caused great disadvantage to the worker who had been continuously serving
the company for a long period.
Moreover, workers were paid a high salary regardless of poor working performance.
The court ruled that there should have been a special plan of revision according to the
reduction of payment based on the agreement with those workers or the introduction of areasonable payment system. A dismissal based on the employer’s reason that the salary was
extremely high compared to the low working efficiency was an abuse of right. The court
determined the validity of dismissal in this case according to the possibility and validity ofthe transfer.
In conclusion, under the system of long-term employment relationships, even though
the worker’s ability is low, the employer cannot dismiss the workers unless the employer has
already executed dismissal avoiding measures, such as educational training, transfer, or
demotion of the worker. Accordingly, the possibility or validity of transfer can influence thedecision on the validity of dismissal. However, the employer’s consideration of measures toavoid dismissal may vary according to the real condition or difficulty of transfer. Large firms
have more possibility of transfer than small firms.

1.1.3. Dismissal of worker employed under special treatment for special purposes
According to Tokyo District Court in 2000, the court accepted the validity of dismissal
even though the employer did not take any measure to avoid the dismissal such as education
or transfer.319 In this case, the employer’s main business was not only to provide knowledge
317Tokyo District Court, August 10, 2001, Rouhan, 820, p. 74.
Ibid.
319
Tokyo District Court, April 26, 2000, Rouhan, 789, p. 21.
318

73

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

and strategies to the client companies but also to help his client companies by working withthem to completely establish or take root of the re-evaluation of benefit systems of held
resources (person, items, capital, information and time) and of the advancement of effective
benefit. The employer emphasized the outcome of his clients through the creation andmaintenance of profit improvement of the clients under the form of possible measures. Thus,
this company differed from typical consultant companies. According to the internal work rule,
Article 9, paragraph 1, No. 1, a dismissal would take place when the worker was judged as
unsuitable to the accomplishment of the occupation. No. 2 stated that a dismissal would takeplace when the worker was judged as incompetent or lacking in ability for theaccomplishment of the assigned occupation.
In this case, the company claimed that the worker was employed as an installation
specialist and received a high salary and annual income (7,700,000 Yen). This treatment
differed from the treatment of employment of new graduates under the long-term
employment system. The requirement that the worker as an installation specialist meant heor she was expected to have skills or special ability or qualifications which became thecontent of employment contract. The court examined whether or not the case fell within the
grounds of the internal work rules. Indeed, the employment contract decided the type ofability and qualification the company required from the worker who was employed as an
installation specialist.
The worker who was employed as an installation specialist had to have qualifications
as a business consultant and as installer. The worker did not always have to receive directions
from his boss, but he had to be able to make a proposal or suggestion on his own initiative.
Moreover, the worker had to have a strong interest in the discovery of problems in theworking place (of the client company). The worker had to be able to discover and clarify theroot cause of the problem, and to resolve the problem from many different perspectives. In
addition to these abilities, he had to have the ability to communicate and to build a trustfulrelationship with many people from the top to the lowest level in the company.
Regarding the dismissal of the worker, the court found that that after being employedin April 10, 1995, the worker was engaged in four projects during the period from June 6,
1995 to September 27, 1996. Among the four projects, three projects showed that theworker’s requested ability or qualification as an installation specialist did not reach theaverage level. The poor ability of the worker continued for a year and a half since the date ofentering the company. The court ruled that there was no expectation that the worker’s ability
could reach the average point even though the worker continued to work in the company
when the worker expressed self-recognition about his poor ability and the competence
required as an installation specialist at the time the worker was being removed from the last
project. The worker’s poor capacity at the time of being removed from the last project fell
into the dismissal grounds in Article 9, paragraph 1, No. 1 and No. 2 of the internal work
rules.
Even though the poor ability of the worker reached the level of dismissal, after
removing the worker from the last project, the employer provided the worker with anotheroccupation through a proposal. This proposal showed that the company tried to continue theemployment of the worker. Even though the negotiation between the worker and the company
continued for about three months from the date of the proposal until December 1996, it was74

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

impossible to find a compromise between the two parties. On March 12, 1997 (two months
after the end of negotiations), the employer dismissed the worker. Considering the above
process, the dismissal took place according to concretely reasonable grounds and thedismissal was an appropriate measure based on social common sense. The dismissal in thiscase was valid.
In conclusion, based on the grounds of a worker’s low or unsatisfying achievement, thedismissal of this worker who was hired for a special or particular duty with high expectations
and responsibilities along with a high salary could take place even though there was no
execution of dismissal avoiding measures.

1.1.4. Dismissal of manager who cannot achieve what is written in employment contract
In 1987, the Tokyo District Court accepted a dismissal on the grounds that the worker
who was employed as the chief of marketing section could not achieve what had been written
in the employment contract.320 The company faced with high competition and a change ofbusiness environment. As a result, the company decided to establish a marketing section on
April 1, 1985 with expectations for them to make a marketing plan on the maintenance ofprofit, expansion of high sales, and expansion of share. The company hired a worker on May
1, 1985 as the chief of marketing section with a monthly salary 517,000 yen and with a bonus
twice a year (summer and winter for 3,000,000 Yen). On February 28, 1986, the company
dismissed the worker based on Clause 55, No.5, which stated that an employer could fire aworker when the grounds were similar results as previous cases that involved dismissal.
According to the process of the employment, the contract regulated the position of theworker as the chief of the marketing section with an expectation that the worker had ability
suitable with that position. However, because the worker was employed according to therecommendation of the corporation whose business was to recruit talented workers, and theworker received special treatment from the company, the court stated that these facts showedthat the employer’s expectation of the worker was far more than what had been concluded in
the contract. Based on this view, when examining the conditions of work performance, thecourt found that the worker decided the marketing plan in order to make the business sections
run, particularly to make a concrete plan for the method of selling medical cosmetic products
for seven months after the beginning of the of work.
However, the worker did not conduct such a plan and did not make an effort to do thisplan as seen from the fact that the worker noticeably violated the expectations of the company
when creating this marketing section. In addition, the worker joined a political party andwould have become politician if he were elected. The worker abandoned the duties half way.
Therefore, the worker did not fulfill the duties in the employment contract.
Another case reflects the trend of the courts that accepts the validity of the dismissal ofa worker who is employed under special treatment as a manager even though there was notransfer. In addition, the court accepted the validity in this case when the employer provided
the worker with a chance to improvement his ability, but there was no improvement in the
320

Tokyo District Court, August 24, 1987, Rouhan, 503, p. 32.

75

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

ability.321 In the case presented to Tokyo District Court in 2002, based on the evaluation of
the employee’s work history, and especially on the employer’s interest in the employee’s
history of duties in an important foreign customer company, the employer judged thedismissed worker to be talented with the English and Japanese language ability necessary for
the work and for providing immediate assistance in quality control.322 Then, the worker was
employed as a first class manager as a person responsible to the customers. The worker also
acknowledged his status as halfway employment. The condition of the discharged worker
differed from the case of newly graduating workers who were under the long-term
employment practice.
The company required that the worker extend his education and earn the necessary
ability from the beginning. However, the worker did not have the ability expected at the timeof employment at all and did not even try to improve his ability. Hence, dismissal was
unavoidable under Clause 37, No. 2 of the rule of employment in cases where the worker had
no faith/truth in achievement of duties and had remarkably low knowledge, skill, or efficiency.
At first, the court examined the ability or aptitude needed to achieve the duties of theworker as stated in the internal work rules. In fact, the worker did not have the work
experience at the foreign customer company of the employer (mentioned at the time ofrecruitment), and lacked the knowledge and ability related to quality control or management.
In addition, the worker also made a wrong translation of the name of his own company andpartner companies, the content of a complaint, and failed to use language used in industry as
seen in a report written in English. For example “cover case” was mistranslated as “hippocase.” Thus, the worker had a big problem with the English language ability expected by thecompany.
Second, the court examined the efforts for improvement in his poor ability (there wasno future expectation of improvement). At the time of deciding whether or not to employ theworker, there was a problem with his Japanese language ability and the manner in which heaccepted instructions from others (cooperation). However, because the worker was employed
under the promise that he would improve his ability, when the worker did not make an effort
to receive instructions from the boss honestly, the company could not continue to employ
him. In this case, after employment, there was no evidence that the worker made an effort toimprove his Japanese language and ability in quality control.
In addition, the dismissed worker behaved as follows. The worker resisted instructions
and advice from the vice-secretary and demonstrated an unreasonable reaction. For example,
the worker exaggerated his ability and experience in the foreign customer company, refused
instructions from a supporting team, and violated an administrative order that required
agreement from the boss before the submission of a report.
Moreover, the worker did not admit his own offence in going against the instructions
from the chief of personnel section regarding the request from the boss for improvement. On
the contrary, the worker criticized the boss. This conduct by the worker was inappropriate,
and it was clear that the worker rejected the request for improvement from the company.
Therefore, the employer could not expect any effort in improvement. This ground321
322

Tokyo District Court, October 22, 2002, Rouhan, 838, p. 15.
Ibid.

76

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

corresponded to the internal work rules that dismissal took place when there was nofaith/truth in achievement of the duties; when the knowledge, skill, or efficiency wereremarkably low; and there was no future expectation of improvement.
More importantly, the dismissed worker used false information about his work
experience. Although the worker stated that his wife had provided this information without
receiving his concrete instruction, he did not confirm the content of that resume andsubmitted it to the company. The court ruled that the worker did not have any intention tosubmit the resume with correct information. Because the employer discharged the worker
four and a half months after entering the company, the choice of dismissal in this case wasreasonable and a proper measure from the point of view of social common sense.

1.1.5. Appropriateness of dismissal
Regarding the grounds of unsatisfying results, even though the achievement is low, theemployer cannot always dismissal a worker who is not the main person responsible for aparticular duty. For example, in a Tokyo District Court case in 1985, a worker resigned fromthe position of director of the company due to his poor ability in managing the budget planof the company.323 Then, the worker served as the chief of planning office and section sales
manager with the same wage. His position involved submitting a document for the plan of a
remade brand of commercial products, to make samples, to hold exhibitions of products, andto sell the products. However, the remade brand commercial product did not provide any
benefit at all, and the worker could not increase the price of sale set in the budget plan he hadsubmitted.
The court found it hard to accept the fact that the company also added the decision of
the budget plan to the content of the duties of the dismissed worker after placing him as thechief of the planning section. This was because the company already knew that there was a
problem relating to the worker’s ability in the management of the budget plan, and it wasalso the reason that the worker resigned from the position as director. In addition, the draftof the budget plan made by the worker was just a proposal. The worker’s plan relating to thecommercial product had to receive approval from other members in planning meetings andsampling meetings.
Regarding sales, the staffs of the company had little knowledge about the nature or
characteristics of the brand of products. For this reason, they conducted methods of sale under
a form that placed old products together with the commercial products of the new brand.
Considering these conditions, the court concluded that making less or even no profit on the
remade brand commercial products could not be the fault or responsibility of the worker
alone. Also, the grounds for discharge did not fit with Clause 41, No. 2 of the internal work
rule regarding a worker’s lack of ability. The dismissal in this case was invalid.
In 2002, Tokyo District Court ruled that it was not appropriate to judge the worker’s
ability or working result in a short period after holding the assigned position.324 The employer
323
324

Tokyo District Court, September 30, 1985, Rouhan, 464, p. 38.
Tokyo District Court, August 09, 2002, Rouhan, 836, p. 94.

77

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

hired the worker for the post as chief of the business development section and expected theworker to achieve a designed task. The court continued to state that the period from thecommencement of work until the dismissal was less than two months which was a very shortperiod for the worker to carry out the expected duties.
In this case, the court recognized that if the company continued to employ the worker,
he could achieve the result requested by the employer. This was a case where the employer
rejected the employment of the worker who was in the probation period according to thegrounds of poor or unsatisfying results. The worker was employed as chief of the businessdevelopment section and received an annual income of 13,000,000 Yen. The company
cancelled the contract during the probation period, two months after engaging the worker tothe work. The Court could not accept the company’s dismissal grounds, that the worker had
weak ability, poor qualifications, a shortage of English language knowledge, and a false job
history (resume). Thus, the rejection of employment in this case lacked concrete reasonablegrounds and was invalid accordingly.
In conclusion, in case of poor ability, the dismissal is valid only in a case where there
is noticeably low level of worker’s capacity and there has been consideration about transfer
measures or education training given to the concerned worker prior to the dismissal. This
reflects the practice of lifetime employment in which nurturing talent through longtime
education and training is commonly conducted in the Japanese enterprise.
For workers who work in a managerial post or with special duties with particularspecial skills or abilities and who receive good working conditions and wages, the employer
can fire them on grounds relating to the loss of the ability specified in the contract eventhough there have been no prior measures, such as transfer or education training. This isbecause the employment of such a worker is made halfway based on their special skills withspecified or expected results and is different from the employment of normal workers whoare in general newly graduated staff members. The dismissal in this form is allowed in thecase where at the time of the conclusion of the contract; there was an agreement requiring a
specific skill or ability.
Moreover, if the worker is not the main person who is responsible for this particular
task or receives a short period of time to achieve a result, the court does not accept the validityof dismissal. Compared to those who are employed soon after their graduation from school,
workers who are hired half way for specific tasks with special treatment from the employer
have a higher risk of dismissal.

1.2. Dismissal due to illness
1.2.1. Impossibility of work performance after expiration of work suspension
In cases where the worker cannot return to the same post as before due to injury or
sickness, the worker’s inability in providing labor or service or lack of ability becomes areasonable ground for dismissal. However, as sickness or injury comes to everyone, toimmediately dismiss a worker due to such reasons is quite unpleasant, especially to those who
78

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

have been serving the company for years. Thus, many companies draw up their internal work
rules with a system of work suspension for medical treatment for a certain period. This system
is also accompanied by a condition that allows dismissal when a worker cannot return to theprevious post after the period of suspension of employment has elapsed.
In a case at the Tokyo District Court in 2007, the Japan Gas Company employed aworker from March 26, 1990.325 A worker was transferred to the subsidiary company, known
as Nichigasu Calculation Center from September 16, 1997. This was after many previoustransfers. From October 1, 2001, the worker was transferred to the Transportation Service
Company that was also a subsidiary of the Japan Gas Company. While working in thedelivery section, the worker was moved to the gas loading section from January 20, 2003.
These transfers were made because of the poor physical condition of the worker.
The worker received orders from the Transportation Service Company to suspend
duties four times. The first suspension was from November 16, 2004 until December 25,
2004. The second was from December 26, 2004 until March 29, 2005. The third was fromMarch 30, 2005 until June 24, 2005, and the fourth was from June 25, 2005 until August 15,
2005. Before the first suspension, the worker took annual leave with wages due to poor healthfrom September to November 2004. After the worker submitted a health examination paper
to make a request for one-month absence for medical treatment for a condition that included
symptoms such as loss of self-control, the Transportation Service Company ordered theworker to suspend duties.
After the expiration of the period of suspension, the worker submitted to the company
another health examination document with the same content. Accordingly, the company
repeatedly ordered more suspensions of work three times. The suspension of work on
November 16, 2004 was made according to Clause 45, No. 4 of the Japan Gas Company thatthe suspension was made in line with the existence of “special circumstance,” and Clause 49,
No. 1 of the Transportation Service Company that suspension was allowed when the worker
could not fulfill duties due to accident or weakness of mentality or spirit.
On July 29, 2005, a date near the expiration of the period of work suspension due on
June 23, 2005, the Transportation Service Company sought to confirm whether or not theworker could return to the workplace and asked the worker in a written letter to submit ahealth examination document. However, when the worker did not submit this document, thecompany telephoned the worker to confirm his capability of returning to the workplace. Thisconfirmation was a message from the employer that if the worker could not return to theworkplace, he should retire.
Subsequently because the worker replied that his body condition remained as bad as
before, the Japan Gas Company on August 15, 2005 telephoned him to check the possibilityof his returning to work. The worker replied that his physical condition had not improved
and wished to work in an appropriate position because he could not work in the area of gas
loading any more. The Japan Gas Company after receiving the same answers decided thatthe worker could not return. Later on, the Transportation Service Company transferred thestatus of the worker back to the Japan Gas Company.
325

Tokyo District Court, March 30, 2007, Rouhan, 942, p. 52.

79

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Because the worker did not submit an examination paper as requested by the company,
it was appropriate that the Japan Gas Company and Transportation Service Company did notextend the period of work suspension after August 15, 2005 (the fourth order of worksuspension). According to Clause 52, No. 6 of the internal work rules of the Japan Gas
Company, the retirement from work became valid after August 15, 2005.
Based on the above case, there was also a dispute as to whether or not the situation of
the worker fell into the clause provided in the internal work rules. However, in a company
where there was no system of work suspension, the immediate dismissal was not allowed.
After that, the court examined the relationship between the legal principle of the abuse ofright to dismissal and the possibility of working. The problem in this case was whether or notthere was the possibility that the worker could return to the same post after the expiration of
the period of work suspension. The evaluation or judgment on the ability of the worker was
based on the medical diagnosis provided by the companies’ doctors and those from outside
the companies.
The court decided that there was a possibility for the worker returning to work basedon the medical evidence and that content of the duties of the worker. In the case of mental
problems, the important determinant for the possibility to work was the court’s examinationof the worker’s attitude and communication during the litigation process. For example, theemployer dismissed the worker according to the grounds of manic depression.326 Before thedismissal, there was no evidence that the company requested the advice of a doctor or medical
physician. From the testimony of the worker’s attitude during the process, cross-examinationand interrogation, the court judged that the condition had improved as a result of treatment,
the symptom was not serious, and that there was the possibility that the worker could recoverwith medical treatment. In addition, in view of the fact that the company continued
employing two other workers with health problems and on the existent health condition of
the dismissed worker, the court ruled that the employer had violated the principle of equal
treatment when they discharged only one worker. The dismissal was an abuse of right.

1.2.2. Possibility of returning to work incrementally
At the time of the expiration of the period of work suspension, the worker cannot
perform his or old position, but can do easier tasks. In such cases, there are two points ofview among courts regarding the validity of dismissal (the employer’s suggestion for
retirement).327 First, the dismissal is valid when the worker cannot recover a state of healththat would enable him or her to accomplish his or her previous duties at a normal level.
Second, the dismissal is invalid because the employer should place a worker in an easier task
so that the worker can recover from the illness or injury to a degree that will enable him to
return to normal duties gradually, step by step for a certain extended period. This is also the
problem of whether or not the employer has a duty to take measures such as offering a periodof preparation for returning to work, offering opportunities for education and training, ortransferring of worker so as to avoid dismissing the worker from the company.
326
327

Tokyo District Court, February 18, 2005, Rouhan, 892, p. 80.
君和田, 問題解決 労働法〈5〉解雇・退職, 53.

80

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Regarding the duty of an employer to transfer a worker to an easier task, there was acase where the worker claimed money during the period where the employer refused his laboror service. In this case decided by Supreme Court in 1998, the worker who was being engaged
as an onsite overseer of a construction factory asked for a transfer from his present position
to an office job on grounds relating to private sickness.328 The company rejected his request,
ordered the worker to have medical treatment at home, and cut his wages.
If an employment contract is concluded without specifying the content of duties, eventhough the worker could not perform perfectly the specified duty ordered by the company inline with genuine necessity, the employer has a duty to accept the worker’s request to offer
their labor in other duties when consideration is made of the real situation, the difficulties
involved in transferring the worker in the company, the type of company, the scope of thecompany, and the position, experience, and ability of the worker. In this case, the court
examined whether or not the transfer of the worker was possible and decided on the existenceor non-existence of the right to claim for wages.
The decision of the Supreme Court above concerned the existence or non-existence ofthe right to claim for wages; however, it also resolved the problem concerning cases of
dismissal on the grounds that there was difficulty in returning to the previous duty due tosickness or injury. Accordingly, if there is no restriction on the type of worker’s duty, when
the worker cannot return to the previous position but can work in other duties, the court
invalidates a dismissal that takes place without any examination of the possibility of transfer
to other duties.
Furthermore, the courts have proposed a rule that employers should provide workers
with a reasonable period or measures sufficient for regaining the ability to work again
incrementally after the expiration of the period of work suspension. The Sapporo District
Court on September 21, 1999, dealt with a case where a worker was in the period ofsuspension of work due to an accident outside the business (private reason). The company
dismissed him on the ground of expiration of the period of work suspension.329 The court
interpreted the system of work suspension providing the worker with a period of absence ofup to a maximum period of 6 months and that during this period the employment relationshipof the worker was maintained with the system exempting the worker from work.
The system protected the worker from retirement (dismissal) during the period of 6months, as the worker could not supply his services because of the private sickness, with theemployer waiting for the worker’s recovery during this period. Therefore, in cases where aworker might recover from disease or injury and could return to their previous work after the
expiration of the period of work suspension, a retirement (dismissal) on the grounds of the
expiration of the period of work suspension is invalid.
The possibility of returning to work must be decided based on the objective or realcondition of the recovery of disease or injury of the worker when the period of worksuspension expires. Regardless of whether the disease or injury has recovered to a level
permitting a return to work, if the employer’s advice for retirement or dismissal takes place
328
329

Supreme Court, April 09, 1998, Rouhan, 736, p. 15.
Sapporo District Court, September 21, 1999, Rouhan, 769, p. 20.

81

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

without the employer having sufficient information to judge the possibility of the worker’s
returning to work; the retirement or dismissal is invalid.
When the period of 6 months of work suspension expired (January 10, 1997), theworker’s left hand still had slight shaking, the right leg remained numb, and vision wasslightly blurred. Despite hospital visits once or twice a month being necessary, there was noproblem with the everyday life, and the worker recovered to the extent that he could stillengage in office work carry out calculation, and drive a car. The worker could be responsible
for previous work duties, such as creating estimates and quantity surveying.
Though the worker could not fulfill 100% of the required work immediately, at least
while being engaged in work, there was the possibility of full recovery after the period of
two or three months. In the company, there was no rule that recognized the extension of thisperiod. However, in reality going to hospital once or twice going was not obstacle for theworker to carry out his duties. Therefore, the court ruled that based on the principle of goodfaith, after the expiration of the period of work suspension, it was possible that the worker
could go to the hospital once or twice per month. Consequently, the expiration of the periodof work suspension was not grounds for retirement or dismissal of the worker.
In another case, a worker, during the period of work suspension due to sickness
expressed an intention for reinstatement to work, and there was a genuine possibility of theworker supplying their services.330 There was no restriction on the type of work at the timeof recruitment and there was the fact that the worker expressed an intention to return to workon August 6, 1997. In cases where the worker shows an intention to return to work, theemployer decides on this possibility.
The court examined the possibility of a new work arrangement according to the realfacts. The employer had a business section of for the Shinkansen Railway at Tokyo City andbranches in Shizuoka City and Osaka City and employed 22,800 workers. The content of thebusiness consisted of various jobs relating to buying and selling immovable property for the
purpose of railroad business. Also the types of business were numerous, such as general work
(work and skills), transportation work (station staff, guard/conductor, and driver). The worker
was engaged in the duty of examining carriages when the sickness occurred.
On December 1997, there were four facts about the worker’s physical condition. One,the worker could walk by himself without using a stick though it took time. Two, though theright hand was weak compared to left hand, the grip (ability to catch) was not much different
to that of an ordinary person. However, there was difficulty in detailed work such as writing
because the operation of the fingers of the right hand was bad. Three, the worker’s speech
was at a level that could be understood by others. Four, even though there was double vision,
its level was not serious, and he could focus on a single point.
Moreover, certain control over blood pressure was possible when the worker took
medicine. Little by little, the worker’s blood pressure increased its stability. If health could
be sustained the danger of a reoccurrence of cerebral blood vessel disease decreased. Basedon the various contents of jobs in the company, the physical condition of the worker, and the330

Osaka District Court, October 04, 1999, Rouhan, 771, p. 25.

82

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

worker’s claim for supplying labor, the court found that the current worker’s ability at least
fitted with a job in the tool room at Osaka Carriage No.2. Thus, there was the possibility oftransferring the worker to the tool room.
The work in the tool room consisted of loaning and keeping tools. Hence, special
knowledge and experience were not necessary or required. The work in the tool room did not
require speed in writing letters or walking. If the worker had enough ability to engage inconversations with coworkers, there was no hindrance or obstacle to the work. Because thepower to grip was within the appropriate range, the worker could manage handling tools to aparticular weight.
The court ruled that if the worker could not sufficiently perform the previous task due
to body condition, if there was a request to supply labor in the same quantity and speed as an
ordinary person in other works, from the principle of good faith in the employment contract,the employer should have made the worker take over a job that corresponded to the abilityof the worker from the consideration of the company’s scale, worker’s arrangement,
responsibilities, and possibility of changes. Within the company, for example, one worker
did not deal with heavy items because the company arranged for many people to work as
partners according to the quantity of work. Carrying in and out the tools was the
responsibility of the person who received them. According to the scale of the company of theemployer, there was no fact that the employer could not accept the worker’s request for theseother duties. Therefore, at least, regarding the work in the tool room, there was the possibility
to be posted there. Thus, the court rejected the assertion of the company that there was nowork possible for the worker.
In conclusion, if there is no restriction on the type of duties for the worker, the employer
according to the principle of good faith should assign the worker easier tasks that fits withthe current condition of worker’s ability even after the end of the expiration of period of thework suspension. The court judges the possibility of new arrangements or transfer based on
the worker’s experience and responsibility, the company’s scale, the real situation of thepossibility or impossibility of transfer. However, in cases where the worker cannot even doeasy tasks, the employer is permitted to dismiss this worker

2. Dismissal due to worker’s misconduct
Most of the rules of employment categorize worker’s misconduct as conduct that (1)interrupts the operation of production or service, (2) degrades the reciprocal truth in theemployment relationship, and (3) intentionally harms the properties of the company. They
also regulate four levels of punishment starting from verbal warning, wage cut, worksuspension, up to immediate dismissal.331 In this case, dismissal on grounds relating to aworker’s offence functions as a kind of disciplinary measure the employer takes to punish
the worker through termination of the employment contract.

331

Toshiaki Ohta, “Works Rules in Japan,” International Labour Review 127 (1988): 633–34.

83

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

2.1. Types of dismissals
If viewed from the method of execution, dismissals are divided into two categories,
namely ordinary and disciplinary. A disciplinary dismissal is punishment for any worker’s
conduct that violates the particular instructions of a company while ordinary dismissal is theexecution of employer’s right to cancel the contract.332 Both have different social and legal
meanings. The two types of dismissal have different procedures and consequences. In thecase of ordinary dismissal, the employer has to notify the worker prior to discharge or pay
compensation in lieu of the notice period to the dismissed worker.333 Whereas, in the case of
disciplinary dismissal, an employer can fire a worker immediately without advance
notification or payment of compensation in lieu of the notice period, but the employer has toobtain approval from the Labor Inspector.334
Moreover, in many cases, according to the rules of employment, the dismissed worker
cannot receive any amount of retirement allowance.335 The worker also loses their right tounemployment benefit provided in the Employment Insurance Act when they are dismissed
according to serious misconduct.336 In addition, the workers might face great difficulties ingetting new employment after having a history of disciplinary dismissal.337 In conclusion,
when compared to ordinary dismissal, a disciplinary dismissal causes great disadvantages tothe worker.
There are punishment measures that have the same effect as disciplinary dismissal.
First, Yushi Kaiko refers to discharge that lessens the consequence of disciplinary dismissal;
and second, Yushi Taishoku refers to employer’s advice for retirement or resignation throughwhich disciplinary dismissal takes place when the worker does not follow this advice in theset period.338 Even though Yushi Taishoku is done in the form of the employer requesting theworker’s resignation, it is one kind of disciplinary measures, and its legal effect has the same
rules as disciplinary dismissal.
For example, the Tokyo District Court in 2006 ruled as follows on the rule governing
Yushi Taishoku.339 The chief of a finance section submitted a request for retirement to thecompany in April 26, 2004 on grounds of “punishment by Yushi Taishoku due to violation of
the internal work rule.” Since the court did not recognize the violation of the internal work
rule, and based on the fact that the punishment of Yushi Taishoku according to the above
332

Tokyo District Court, April 24, 2002, Rouhan, 828, p. 22.
Labor Standard Act of Japan, art. 20, ¶¶ 1&2 (1947).
334
Ibid., art. 20, ¶ 3.
335
中窪, 野田, 和田, 労働法の世界, 192.
336
“Employment Insurance Act of Japan,” December 28, 1974, Article 33 reads “In the case where an insured
person has been dismissed due to significant cause imputable to the accused himself/herself or has resigned
voluntarily without justifiable reason, the basic allowance shall not be paid for a period specified by the Chiefof the Public Employment Security Office of one month or more and less than three months, following the
expiration of the period prescribed in Article 21. Provided, however, that this shall not apply to a period during
which he/she takes public vocational training, etc. as directed by the Chief of the Public Employment Security
Office, nor to a period after the day of completion of said public vocational training, etc.”
337
Araki, Labor and Employment Law in Japan, 154.
338
君和田, 問題解決 労働法〈5〉解雇・退職, 35.
339
Tokyo District Court, January 31, 2006, Rouhan, 912, p. 5.
333

84

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

premise was invalid, the court could not accept the validity of the retirement of the chief ofthe finance section. The letter of request for retirement submitted due to the violation ofinternal work rule and due to punishment by Yushi Taishoku was an invalid measure. The
retirement based on this submission could not be accepted as a valid retirement.
Other than disciplinary dismissal and Yushi Kaiko, all kinds of discharges are called“ordinary dismissals.”340 Yushi Taishoku, discharge on grounds related to worker’s sickness
or poor capacity, and adjustment dismissal are ordinary dismissals. The rule of the abuse ofright in Article 16 of the Labor Contract Act governs the validity of these kinds of dismissals.
Any kind of dismissal that lacks reasonable grounds and appropriateness is an abuse of rightand invalid.
Even though the worker commits a misconduct that can be grounds for disciplinary
measure, the employer tends to avoid disciplinary dismissal by choosing the ordinary type.
There are many reasons for the employer’s preference in executing the ordinary dismissal.341
One reason is that there is the employer’s consideration or concern for the livelihood of theworkers after dismissal. Second, an employer might wish to avoid the complicated procedure
involved in obtaining the approval of the Labor Inspector for exemption of compensation forprior notice. Third, the employer may be annoyed by the trouble involved in any dispute
regarding discharge because the rule for ordinary dismissal is already strict and the rule fordisciplinary dismissal is even stricter. In other words, courts have a tendency towards strict
control and a high possibility of rejecting the validity of disciplinary dismissal, while therecognition of ordinary dismissal is comparatively easy.
Since disciplinary dismissal is made on the grounds of violation of the company’s
directions through the misconduct of the worker, there are many disputes where the grounds
for disciplinary dismissal are used as though it were an ordinary dismissal.342 For the same
worker’s conduct (violation of the company’s instructions), along with expression of
intention for disciplinary dismissal, the employer expresses an intention for ordinarydischarge. In such cases, the validity of disciplinary dismissal and that of ordinary dismissal
are decided individually.
In addition, though an employer might not express the intention of ordinary discharge,
during the litigation process, there are cases where the employer claims that the expressionof intention of ordinary dismissal also includes an expression of intention of disciplinary one.
Therefore, if the disciplinary dismissal is invalid, the ordinary one is valid. The Tokyo District
Court in 1979 ruled that in general it was not appropriate to include expressions of intention
for ordinary dismissal with those for disciplinary discharge, and if the transfer fromexpression of intention for disciplinary dismissal to that of ordinary one was accepted, eventhough there was a reception of the expression of intention for discharge, it unfairly made thestatus of the worker become unstable.343
Moreover, regarding the transfer from an expression of intention for disciplinary
dismissal to an expression of intention for ordinary dismissal, the Saitama District Court in340

君和田, 問題解決 労働法〈5〉解雇・退職, 36.
Ibid., 32.
342Tokyo District Court, April 24, 2002, Rouhan, 828, p. 22.
343
Tokyo District Court, August 29, 1979, Rouhan, 326, p. 26.
341

85

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

2003 rejected the assertion of the employer.344 In this case, employer claimed that even if thecourt did not allow an earlier disciplinary discharge the ordinary dismissal (economic
dismissal) was valid. However, the court ruled that in the letter notifying immediate discharge
against the worker, the employer wrote that the dismissal took place according to Clause 49of the rules of employment on the standard of disciplinary measure. It was clear that theearlier discharge was a disciplinary dismissal.
Therefore, the disciplinary dismissal as punishment and the ordinary dismissal werecompletely different in the meaning of the system. And, if the court accepted the transfer ofsuch an invalid or bad action by employer, the status of the worker would become noticeably
unstable. Such a court ruling could induce easy disciplinary dismissal. In conclusion, thepunishment in disciplinary dismissal and ordinary dismissal are different in the meaning or
substance of the systems, different in grounds, requirement and effect. Hence, the judges
rejected such a transfer.

2.2. Rules for disciplinary dismissal
Though the validity of disciplinary dismissal depends on each individual case, thecourts tend to apply the rule of abuse of right to dismissal provided in Article 16 of the Labor
Contract Act. Since disciplinary dismissal has the characteristic of combining dismissal withdisciplinary measures, there must be a fulfillment of the requirements in Article 15 of theLabor Contract Act that:
In cases where an employer may take disciplinary action against a worker, if suchdisciplinary action lacks objectively reasonable grounds and is not found to beappropriate in general societal terms in light of the characteristics and mode of the act
committed by the worker pertaining to such disciplinary action and any othercircumstances, such disciplinary order shall be treated as an abuse of right and beinvalid.
Hence, dismissal as one of the disciplinary measures must take place with objectively
reasonable ground and the choice of discharge as a disciplinary measure must be appropriate
according to the general societal term. The rule of abuse of right in dismissal is also appliedin the case of disciplinary dismissal. In general, legal disputes over the validity of disciplinary
dismissal include three points. First, there must be facts to support the existence of
misconduct. Second, such misconduct corresponds to the disciplinary ground. Third, the levelof seriousness of misconduct is proportional or appropriate with the weight of disciplinary
measures, such as disciplinary dismissal or Yushi Kaiko.

2.2.1. Existence of rules on disciplinary grounds
An employer cannot take any disciplinary action when there is no rule that enumerates
the offence, type of offence, and degree of punishment. There must be rules that clearly state344

Saitama District Court, June 30, 2003, Rouhan, 859, p. 21.

86

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

the grounds for disciplinary action. This rule reflects the principle nulla poena sine lege thatliterally means no punishment without law. The internal work rules of the companies regulate
the grounds for punishment and types of disciplinary actions. According to Article 89
paragraph 1 number 9 of the Labor Standard Act, the grounds and types of disciplinary
actions are regulated in the rules of employment.345 According to Article 7 of the Labor
Contract Act, the working conditions in the rules of employment that are reasonable canbecome the content of the employment contract as long as the employer informs workers
about such internal rules. In this sense, the content of regulation on disciplinary measure islocated in the employment contract and internal work rules.

2.2.2. Analogical application of principles of criminal law in disciplinary dismissal
In addition to the principle of no law without punishment, non-retroactive and double
jeopardy that are the principles of criminal law also apply in the case of disciplinary measures,
including dismissal. The Constitution of Japan (Article 39) provides that “No person shall beheld criminally liable for an act which was lawful at the time it was committed, or of which
he had been acquitted, nor shall he be placed in double jeopardy.” 346 According to theprinciple of non-retroactivity, there is no disciplinary action for any misconduct occurring
before the establishment of regulations and disciplinary measures in the internal work rule.
Furthermore, the principle of double jeopardy also applies in the case of disciplinary
measures. The court also uses these principles when evaluating the validity of dismissal on
the grounds of worker’s misconduct.
The following cases illustrate the application of the principle of double jeopardy in caseof disciplinary dismissals. For example, the Osaka District Court ruled in 1963 that in general,an employer could not take different disciplinary measures based on the same fact in light ofthe principle of double jeopardy.347 The principle of double jeopardy restricted employers
from taking second-time disciplinary measures based on conduct that had already been theobject of disciplinary measures.
An examination of a decision by the Tokyo District Court in 1998 provides a concrete
example of the application of the principle of double jeopardy.348 The worker was a driver
for a taxi company. At time the employer took disciplinary measures against worker
including work suspension from July 22, 1997, because the worker had scattered bills inside
the company. The company extended the period of work suspension. After this extension, on
October 23, the employer dismissed that worker under Yushi Kaiko according to the internal
work rule on the grounds that the worker clearly expressed an attitude that did not follow the
management of the company.

345

Article 89 of the Labor Standard Act provides that “ An employer who continuously employs 10 or moreworkers shall draw up rules of employment covering the following items and shall submit those rules of
employment to the relevant government agency. In the event that the employer alter the following items, thesame shall apply:(9) in the event that there are stipulations concerning commendations and/or sanctions.”“Labor Standard Act of Japan.”346
The Constitution of Japan, art. 39 (1946).
347
Osaka District Court, February 22, 1963, Rouminshu, 14–3, p. 340.
348
Tokyo District Court, February 06, 1998, Rouhan, 735, p. 47.

87

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Clause 81, No. 1 of the internal work rule regulated that even though the worker
received punishments such as a reprimand, a pay cut, demotion, suspension from doingtransport-related work, and work suspension in general, when there was no expectation of
the worker’s sincere regret, the employer fired the worker in the form of Yushi Kaiko or
disciplinary dismissal. However, the court ruled that because the disciplinary measure
involved the employer’s punishment for the worker’s violation of the company’s instructions,the principle of double jeopardy also applied to the clause for disciplinary measures in therules of employment. The conduct of the worker that became the object of disciplinary
measures in the past could not be the object of disciplinary measures again. The employer
could not punish the worker based only on the grounds that that worker did not self-reflect
on his misconduct. In practical terms, the worker had already received disciplinary measuresthat included suspension.
The company claimed that the worker clearly behaved negatively by not following theoperations and management of the company as per Clause 80, No. 3 of the internal work rule.
However, on October 16, eight days before dismissal, the chief of the union committee asked
the worker whether the employer had said that if the worker wrote a letter of apology theworker would be allowed to do work-related transport duties. Although the worker had nointention of writing an apology, there was no proof from the person related to the union thatthe worker was to write an apology and a commitment to follow the operations andmanagement, and that at that time the worker had not followed the operations andmanagement of the company.
Even though the worker during the exchange of conversation with the person related
to the union had no intention to follow the direction of the company, there was no proof thatthe worker directly showed a negative attitude to the employer in the sense that he had nointention to follow the management. In addition, there was no proof that the worker clearly
disobeyed the order or instructions regarding the business of the company. Consequently, theemployer’s claim did not correspond to Clause 80, No. 3 of the internal work rule. The Yushi
Kaiko was invalid according to the violation on the principle of double jeopardy.
The principle of double jeopardy prohibits employers from executing double
punishment. However, when there is a history of disciplinary measures against a worker’s
misconduct, and the same worker commits another mistake again in a short period after theprevious sanction, the employer with reference to the history of punishment can decide on
disciplinary measure against this fault349 Similarly, the Kobe District Court in 1983 ruled thatthe principle did not prohibit an employer from imposing heavy disciplinary measures on a
person who had received sanction in the past when that person committed a fresh misconductthat was the object of disciplinary measures, in comparison with other persons who received
no punishment at all in the past.350 Hence, at the time of deciding the content or types of
disciplinary measure, the history of past sanctions can be considered as a condition or
grounds for disciplinary dismissal.

2.2.3. Type of disciplinary grounds in the rules of employment

349
350

14–3 Rouminshu 340.
Kobe District Court, March 17, 1983, Rouhan, 412, p. 76.

88

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Naturally, there must be a correspondence or match between the invoked grounds andthe reason for disciplinary action regulated in the internal work rules. The employer can takedisciplinary dismissal at the time they come to know about the misconduct. If the employer
after carrying out a punishment has acknowledged that the invoked reason corresponds to thegrounds for disciplinary dismissal, they cannot discharge the worker.
The Supreme Court in 1996 invalided a disciplinary dismissal when the court did notallow the inclusion of the worker’s age, which the employer did not know at the time ofdischarge, as an additional ground for disciplinary dismissal.351 In this case, when a worker
requested two days off, the employer’s representative dismissed him. While the dismissed
worker was preparing a document and filing a lawsuit to the court, the company replied bysaying that at the time of recruitment, the worker wrote his age as 45 but that his true age was
57. The employer claimed that worker falsifying their background was reason for disciplinary
dismissal from the beginning. The employer further asserted that the judgment of the first
instance (that rejected the employer’s claim that disciplinary dismissal in this case was basedon the fact of personal age of the worker) implied a mistake over the interpretation of theexecution of the right to discipline.
The court in this case ruled that because the disciplinary measure against the worker
was a punishment on the grounds of a violation of the company’s instructions, the legality of
the concrete penalty was connected with this violation alone. Therefore, when employer did
not know the existence of a particular offence by the worker at the time of dismissal, as longas there were no special circumstances, the employer could not use this offence as a groundfor disciplinary discharge because it was not the grounds of the disciplinary measure indispute.
In this case, the Supreme Court accepted the legality of the decision of the first instance,that is, the disciplinary dismissal being based on the ground such as the worker’s request fora day off and the worker’s attitude in receiving a day off at that time. Because at the time ofdismissal, the employer did not acknowledge the issue of the age of the worker, the employer
could not take this into account.

2.2.4. Principle of appropriateness and equal treatment
The validity of disciplinary dismissal is much influenced by the principle ofappropriateness and the principle of equal treatment.352 Based on the Labor Contract Act(Article 15), the rule on the abuse of right to disciplinary action and the rule on the abuse ofright to disciplinary dismissal have the same content, namely the requirement for the
existence of reasonable grounds and the requirement for the appropriateness of the execution.
According to the principle of appropriateness, the weight of disciplinary action must be
appropriate in the light of type and level of illegal violation, and the disciplinary dismissal or
Yushi Kaiko can take place when the violation of the company’s order reaches a level thatjustifies such a punishment.353
351

Supreme Court, September 26, 1996, Rouhan, 735, p. 47.
君和田, 問題解決 労働法〈5〉解雇・退職, 39–40.
353
Ibid., 39.
352

89

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Most disputes imply that although any kind of punishment is inevitable, the executionof disciplinary dismissal is the heaviest sanction. According to a case decided by the Tokyo
District Court in 2006, after changing the commutating route after approximately four years
and eight months, the worker did not report this change to the employer and unjustly received
a commuting allowance.354 The worker’s unjustly receiving this allowance fell under thedisciplinary rules of employment, Clause 39, No. 11 where there was damage due to aworker’s intentional act. However, in consideration to the worker’s motive, the amount ofdamage, and the process of negotiation between the employer and the worker regarding theallowance for the commuting fee, the court invalidated the disciplinary dismissal becausesuch action used to maintain order in the company was too heavy.
In a case presented to the Tokyo District Court in 2005, a worker did not make salerecord or cancel the sale of previous order, failed to establish the truth about the intermediatetransaction and to pay for the purchased product, made an inappropriate dealing withadditional cost and forgery of transaction documents.355 These misconducts corresponded to
grounds for disciplinary dismissal as per the internal work rules, particularly Clause 74 (2)and (6). Clause 74 (2) which stated that a dismissal could take place when the worker did not
follow the working rules, or various other rules of the company, or their duties andinstructions; and consequently caused serious disturbance for the company. Clause 74 (6)stated that a dismissal could take place when misconduct noticeably hampered the credit of
the company and noticeably caused damage to the company due to bad intentions or serious
offences.
The court found that in each situation regarding the sale record, the payment of money
received in the intermediate transaction, and the creation of false order documents, the worker
did not try seeking his own benefit. The worker tried to extend the sales in the company.
Each offence was not the individual conduct of the worker, but was conduct that enhanced
the company. If the conduct regarding the sale record was excluded, the worker did not havea heavy responsibility for his offence. Regarding the s sale record, the worker’s conduct did
not cause damage to the company. Especially, when compared to the employer’s treatment
against the representative director of the company, the dismissal of the worker wasquestionable on the basis of fairness. When considering the overall situation, even when there
had to be disciplinary measures against the worker, the disciplinary dismissal was too harsh.
Therefore, the disciplinary dismissal in this case lacked reasonable grounds and was not
appropriate according to the social common sense. The right of dismissal was abused andinvalid.
The principle of equal treatment requires the employer to take disciplinary measures ofthe same kind and level against any conduct violating the same rule at the same level. Respect
for the principle of equal treatment has its foundation in many legislative texts. The
Constitution of Japan (Article 14) stipulates “All of the people are equal under the law andthere shall be no discrimination in political, economic or social relation because of race, creed,
sex, social status and family origin.”356 In addition, the Civil Code (Article 90) reads, “Ajuristic act with any purpose which is against public policy is void. 357
354

Tokyo District Court, February 07, 2006, Rouhan, 911.
Tokyo District Court, November 22, 2005, Rouhan, 910, p. 46.
356
The Constitution of Japan, art. 14 (1946).
357
The Civil Code of Japan of 1898, art. 90 (1898).
355

90A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Although equal treatment under the Constitution is not directly applied in private
relations, the public policy of the Civil Code is indirectly applied in the relations of private
persons. There is a requirement for the realization of equal treatment in labor relations where
there is a big difference in power between employer and worker; it is necessary to adopt the
principle of equal treatment in the Labor Standard Act.358
The Labor Standard Act (Article 3, 4) requires an employer to have fair and equal
treatment towards each worker. Accordingly, an employer is restricted from discriminatory
treatment in the areas of wage, working hours, promotion, transfer, safety and health, and all
kinds of working conditions, including dismissal, in particular the grounds and the dismissal
itself.359

2.2.5. Compliance with reasonable procedures
If the rules of employment or collective agreements require that dismissal take placethrough discussion with disciplinary committees and consultation with labor unions orworkers’ representatives, the employer must abide by these procedures before dismissal. The
Labor Standard Act requires an employer to respect the rules of employment and collective
agreement. 360 Even if there is no such regulation, upon the existence of grounds fordisciplinary action, the employer has to provide the worker with a chance to receive noticeand to defend him or herself against the employer’s allegations. However, where there is nosuch regulation in the internal work rule, there are no case laws that invalidate the disciplinary
dismissal simply for the reason that there is no worker’s chance of defense.361
2.3. Examples of rules of dismissal due to misconduct
The examination of decisions of courts is an effective way to understand the concrete
content of the rule on the abuse of right to dismissal. The existence of reasonable grounds
and the appropriateness of dismissal are the result of the evaluation of all the facts in eachindividual case. The following courts’ decisions are examples of rules on misconduct thatappear as reasonable grounds for dismissals.

2.3.1. Violation of company’s orders
In general, the disputes over the validity of disciplinary dismissal on the grounds thatthe worker rejects the company’s instructions concern the question of whether or not the358

土田 et al., 条文から学ぶ労働法, 11.
中窪, 野田, 和田, 労働法の世界, 78.
360
Labor Standard Act of Japan, art. 2, ¶ 2 (1947).
361
Tokyo District Court, December 17, 2004, Rouhan, 889, p. 52; Osaka District Court, December 19, 2001,
Rouhan, 824, p. 53.
359

91

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

company’s instructions are legal. In the case where the company’s instructions are legal, andthe violation of these can cause great impact, as a whole disciplinary dismissal can be valid.
A violation of the company’s instructions mostly concerns the violation of an order oftransfer. However, even though a company’s orders, such as a transfer, are legal, thedisciplinary dismissal is invalid when the execution of transfer is inaccurate.362
The following is an examination of a case in the Tokyo District Court in 2000 regarding
the validity of disciplinary dismissal on the grounds of the worker’s violation an order by thecompany.363 An inventory control and package shipment company hired the worker throughan employment agency. After three-month probation, the worker became a regular staff
member with duties the same as that of the chief section of the administration section. Lateron, the company wished to reduce the expense, and ordered a reassignment to the businesssection on October 6, 1997. The worker refused this order by asserting that he was employed
for a managerial occupation. In response, the company took disciplinary measures on
October 31 on the grounds that such conduct fell under Clause 51, No. 9 of the internal work
rule regarding cases where the worker refused a reassignment, transfer, or temporary transfer
without having reasonable grounds. However, the court found that the dismissal took place
one day before the new job of the dismissed worker was to start from November 1.
First, the court examined the legality of the company’s order. The employment contract
in this case was concluded in a form where the company registered with an employment
agency to recruit powerful people to strengthen the business power. Hence, the contract wasmade in order to expand the position of section chief when there was a vacant position as
section chief of the administration section. Second, before the case of the disputed transferof the worker, the company used to employ other workers through an employment agency
and used to transfer those people who were in the administration section to the businesssection. Third, during an interview when being recruited, there was no evidence in theconversation that applied to the specific position. In addition, there was no intention toconclude the contract to specify a particular position such as administrative work or
managerial position.
Therefore, the employment contract attached the worker to the administration section
from the beginning and paid the worker the same wage, as that of the chief of section, but thecontract did not restrict the worker to administration work or managerial work. Based on therecognition that the employer’s right to order a transfer, the employer’s order for transfer inthis case was not an abuse of right as there was a necessity from a business perspective forthe reassignment of many workers from the administration section to business section inorder to reduce expenses in the company.
In addition, from October 7, 1997 (one day after the transfer order) until the day of thedisciplinary dismissal, the worker expressed an intention not to follow the transfer order. The
worker did not change this intention, and it was clear that the worker refused the transfer
order. The employer had the right to transfer the worker and their order in this case did notconstitute an abuse of right. Consequently, the worker’s refusal to be transferred lacked valid
reason, which fell under Clause 51, No. 9 of the internal work rule regarding disciplinary
dismissal.
362
363

Tokyo District Court, February 18, 2000, Rouhan, 783, p. 102.
Ibid.

92

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

The workers in the company formed a union and requested to include the transfer orderin this case as the item for consultation in the collective negotiations. However, the company
rejected this request by claiming that the refusal of a transfer order was a problem for theindividual. The workers were prepared to follow the transfer order if there they were satisfied
after consultations. Although the workers created a union after the order for transfer, thisorder did affect working condition. In view of the fact that the employer had a duty to go
through the collective bargaining process relating to this problem, the employer’s refusal togo through collective negotiations in this case was considered to be unfair labor practiceunder Article 7, No. 2 of the Union Act.364 However, there was no such a procedure. The
disciplinary dismissal that was taken against the disputing worker one day before the start ofwork in the new place and this did not constitute the appropriate procedure mentioned above.
Thus, the court invalidated the dismissal because it did not follow an appropriate procedure
and as such was an abuse of right.
In a case presented to Tokyo District Court in 2002, the court invalidated a disciplinary
dismissal of an incapable person with sex identity who came to the office in the appearanceof a woman. 365 The worker’s clothes violation corresponded to disciplinary dismissal
grounds in the internal rules. However, the court ruled that such a conduct was not a serious
or malevolent violation of the company’s instructions to the extent that dismissal wasappropriate. Based on the fact that the worker was diagnosed as a person with a sexual
identity problem, the worker bore great psychological pain due to the company’s instructions
that required him to act as man or to control her actions as a woman. Moreover, there was
not enough evidence to prove any fear or hatred by others regarding the appearance of worker,
and the appearance in a woman dress did not cause particular obstacles to the fulfillment ofwork.
In a decision of the Fukuoka District Court in 1997, the Yushi Kaiko of a truck driver
who dyed his hair yellow was in valid.366 The worker was a driver for the company whosebusiness was the sale of alcoholic beverage and transportation. The company ordered theworker to change his hair from yellow to black three times. However, the worker did notobey this and did not submit a letter of apology in accordance with the reprimanding
measures of the company. Therefore, the worker expressed the attitude that he did not serveor respect the management of the company. Consequently, the employer used the disciplinary
measure Yushi Kaiko that was heavier than reprimanding measures.
However, the dismissal was invalid because the instructions of the company that
restricted the freedom of the worker were unreasonable and the dismissal was not anappropriate measure. The court ruled that, in general, it was natural that the employer felt it
necessary to understand completely the motivation of the workers in order to secure andmaintain order inside the company. In this case, the employer was allowed to make necessary
rules, directions, and orders. However, the worker did not have to respect the generalsupremacy of the company. There had to be a restriction on the power to keep order in the364

Article 7 of Union Act reads “the employer shall not commit the acts listed in any of the following
items…(2) to refuse to bargain collectively with representatives of the workers employed by the employer
without justifiable reasons;” “Union Act of Japan.”
365
Tokyo District Court, June 20, 2002, Rouhan, 830, p. 13.
366
Fukuoka District Court, December 25, 1997, Rouhan, 732, p. 53.

93

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

company. In particular in matters relating to personality or freedoms of a person, such as haircolor and type, figure, and dressing, if the employer wanted to restrict the freedom of theworker in the name of keeping order in the company, they could only do so within limits.
The employer could restrict the worker’s freedom within a reasonable range necessary forthe smooth administration of the company. The court invalidated the dismissal. In this case,the court paid attention to the benefits of individual personality and limited the company’sorder.

2.3.2. Negligence on duty and poor performance
The validity of dismissal for the reason of carelessness in duty depends on the degree
or magnitude of negligence. For example, the Osaka District Court in 1997 invalidated a
disciplinary dismissal because it was too heavy compared with the worker’s mistake.367 In
this case, the dismissed worker was the manager of a production section and took
inappropriate measures against the incident resulting in the outflow of poor quality products.
When the incident occurred, the dismissed worker did not report to the representatives of thecompany. The dismissed worker ordered the manufacturing workers to stop operations,which delayed restarting operation by one week. Even though there was an outflow of poor
quality products, the dismissed worker wanted to protect his subordinate workers and so did
not properly report the incident. Instead, the dismissed worker made a report of the
production that included the item as being in stock at that time.
The court ruled that from the point where the fired worker carelessly submitted a reportof production repeatedly, this conduct fell under grounds for disciplinary dismissal from theviewpoint of the status of the worker as manager. However, when examining the concrete
contents of the damage, the level of inappropriateness of the steps the dismissed worker took
during the incident, and the repeated negligence in making production reports, the court ruledthat worker’s offence should only made the worker lose his qualifications as the manager ofthe production section, but not his status as an ordinary worker. When doubting thequalifications of the worker as manager of production, the company demoted the worker toordinary staff. This demotion was already an appropriate disciplinary measure. Hence, thedismissal in addition to the demotion made the worker ineligible for receiving receive aretirement allowance. Though the worker lacked qualifications as a manager, the dismissal
was too excessive as the company overlooked the ten-years work the dismissed worker had
contributed. Furthermore, the court found it was very doubtful whether or not the disciplinary
measures were based on past matters to do with the worker.
In another case, the Tokyo District Court in 2002 validated the dismissal of a worker
who was absent without permission for a long period in light of a history of disciplinary
punishment. 368 In this case, the dismissed worker was a journalist who went to collectinformation but did not take any notes at all. Consequently, the dismissed worker wrote
wrong news and then had a problem with the person who collected the information. Eachboss in each new section of the company evaluated the concerned worker to be not up to thetask of producing a good news story compared with other workers.
367
368

Osaka District Court, February 12, 1997, Rouhan, 714, p. 48.
Tokyo District Court, April 22, 2002, Rouhan, 830, p. 52.

94

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Also, when the worker was engaged in sending and receiving E-mails, the worker wrote
a message that harmed the reputation of the company and received a verbal warning. The
work performance of the worker was also extremely poor. Even when the concerned worker
was transferred from the editing section to the welfare program section due to poor capacity
as a writer, the worker kept committing offences such as leaving the company early eventhough there was a warning from the company. As a result, the worker received a wage cut
as punishment. In addition, the worker was absent without permission from January 11 toMarch 2, 2000. Finally, the company dismissed the worker.
The dismissal of a worker in the case of negligence or poor performance is valid when
the degree of misconduct is serious. The level of seriousness in regard to the misconduct
depends on the court’s evaluation of the concrete facts of each case. According to the twocases above, although the worker was careless in duty, the court accepted the dismissal only
on the grounds that the worker repeatedly committed offences with a series of disciplinary
measures.

2.3.3. Obstruction of service or business
The validity of disciplinary dismissal is decided according to the level of the businessinterruption. There are cases where interruption of business operation occurs due to theworker’s dissatisfaction towards the working conditions. However, in general, businessinterruption corresponds to disciplinary grounds in the rules of employment. Therefore, when
workers are not satisfied with their working conditions, they should establish a labor unionor join individual associations and resolve this problem through collective negotiations andcollective action.369 The following are cases regarding dismissals on the ground of worker’s
obstruction and violation of the rules of the workplace.
In the case presented to Osaka District Court in 2000, the employer dismissed workers
in managerial positions on the grounds of operational hindrance.370 Four workers were chiefsof branches of a company whose business concerned the import of medicine. When thecompany paid much compensation due to AIDS or HIV disease contraction, they reduced
wages in line with a decline in sales. The future was unstable. An adviser to the company,
who was the oldest son of the chief of the company, was not happy with the company’s
conduct and created a vision of renewal in order to reform the company. The workers
cooperated with this adviser for the realization of this vision. They signed their names to apetition, created a union of managerial posts, requested for the company to have collective
bargaining, administered a strike, and had a sit-down in front of the company.
In response, the company notified them that it did not recognize a union for managerial
posts. The company took disciplinary dismissal against one of the workers on the grounds
that as the chief of a branch, he had a duty to keep the order of the company. The worker’s
participation in the renewal vision created by a person outside the company caused corruption
and obstructed the appropriate operation of the business. During litigation, the company
claimed that the worker’s misconduct corresponded to grounds for ordinary dismissal in the369
370

君和田, 問題解決 労働法〈5〉解雇・退職, 43.
Osaka District Court, January 07, 2000, Rouhan, 789, p. 39.

95

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

rules of employment when the worker, as the chief of a branch who had the highest
responsibility in each branch interrupted the company’s organization.
The court ruled that the act of petition-signing by the worker did not request that the
representative director of the company resign from his position. This act was just a request
for a constructive improvement of the company. Besides, before grasping correctly the levelof participation of the workers, the employer made the decision of dismissal based only on
the fact that the worker had the position of chief of the branch.
Regarding disciplinary dismissal of another chief of branch, the company claimed thatthe company could not accept the establishment of a labor union of workers in managerial
positions because the group was established for an unjust motive. The company believed thatsitting down in front of the company was not appropriate conduct for the chief of the branch.
The court ruled that the union of workers in managerial positions in this case was anorganization run by managerial posts in the company.371 Because only workers who were thechiefs of the branches were qualified to be members of the union, this managerialorganization was an independent labor union. Therefore, the court recognized the union ofpeople in managerial positions as a labor union. Accordingly, the act of the workers sitting
down in front of the company was a conduct equivalent to a strike by a labor union of workers
in managerial positions. The disciplinary dismissal on the grounds of the workers’ strike wasinvalid.
In contrast to the above decision, the Osaka District Court in another similar caseaccepted the validity of disciplinary dismissals based on the consideration that workers in a
managerial position had substantial responsibility towards the company.372 In this case, theemployer dismissed workers who had established a union for those in managerial positions
because their conduct disrupted the operations of the company.
The court ruled that the four workers made petitions in order dismiss the manager ofthe company under a plan that supported the outsiders. The petition was made by calling forthe involvement of many other workers in the four branches in the company. This activity ofthe dismissed workers was conduct that interrupted the order of the company. This conduct
fell under the disciplinary grounds of the internal work rules of the company and so thedismissal of the managerial workers was valid.
Regarding the appropriateness of the dismissals, the court ruled that the workers inpositions as chiefs of branches had a high responsibility in each branch. Their position was
to maintain the system and order, but the workers easily followed the initiative of the outside
party and involved many subordinate workers. The conduct of the discharged workers caused
disorder for the company. Because the responsibilities of the workers were substantial, thecourt could not judge that the disciplinary dismissals were inappropriate.
371

The establishment of the labor union of the workers in managerial position does not fall into (i) of Article 2of Labor Union Act which states that a labor union is not an organization “which admits to membership ofofficers; workers in supervisory positions having direct authority with respect to hiring, firing, promotion, ortransfers; workers in supervisory positions having access to confidential information relating to theemployer’s labor relations plans and policies so that their official duties and responsibilities directly conflictwith their sincerity and responsibilities as members of the labor union concerned; and other persons who
represent the interests of the employer.”
372
Osaka District Court, December 19, 2001, Rouhan, 824, p. 53.

96

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

2.3.4. Personal backgroundFalsifying personal background is appropriate enough to result in disciplinary dismissal
when this fraudulence affects evaluation of the worker’s ability to carry out duty or causes
adverse influences on the social confidence or trust of the company. If the worker
continuously works for a company for a long period, but disguises his or her background anddoes not cause damage to the company, the court rejects immediate disciplinary dismissal.
The following are court decisions are of cases related to dismissal of workers who
falsify their historical or educational background. The Urawa District Court in 1994 accepted
the validity of disciplinary dismissal on the grounds that the worker wrote “graduate” insteadof the fact of having “dropped out” of high school.373 The worker was employed as driving
instructor after the end of a probation period.
On March 18, 1994, the employer used disciplinary dismissal against the worker on the
grounds that he had misled the company by asserting his graduation status at the time of
employment. The car-driving school was an institution that played a public role in instructing
students or trainees in order to obtain the skill and knowledge of driving necessary for
obtaining a driving license. As an instructor who was engaged directly in this work, theworker was required to have a high level of skill, knowledge or qualifications. In addition,
the worker was required to maintain a proper and truthful relationship with the students,
businesspersons, and executive officials.
Based on the consideration that the study record of the worker was a determinant of his
quality and appropriateness for work, the court ruled that the background of the worker
became one of the most important requirements for job recruitment and arrangement of duties.
If the worker had made it clear at the time of employment that he had dropped out of highschool, the company would not have employed the worker as an apprentice instructor.
Neither after the apprenticeship, would the employer have given the worker the duty ofdriving instructor. The court considered that the worker committed serious disloyal
misconduct under Clause 62, No. 1 of the rules of employment where it becomes grounds fordisciplinary dismissal when a worker falsifies his or her background and gets employed.
The Sendai District Court in 1985 invalidated a disciplinary dismissal because merely
a falsification of academic background or criminal record in itself could not be grounds for
dismissal. 374 The worker was employed as the vice chief in a taxi company that was
employing around ten other workers. The worker mainly managed the sums and received
orders from passengers. However, at the time of employment, the worker hid a previous
conviction record and falsified the work record.
Regarding grounds that the worker hid a history of crime and his past history, the court
had the following view:

373
374

Urawa District Court, November 10, 1994, Rouhan, 666, p. 28.
Sendai District Court, September 19, 1985, Rouhan, 459, p. 40.

97

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

When employers conclude the employment contract, they wish to know accurately thelabor force of workers. The wish to conclude employment contracts and to understandaccurately the labor force of workers is an appropriate requirement because contract
continuously establishes the bilateral relationship where payment of wage is done tothe labor force. The employers hope to conclude a complete employment contract (thecontract without omission), and inform workers about the clause that the academic
history, past employment, or history crime affects the evaluation of labor force whenseeing concretely. In principle, workers bear the duty based on the principle of goodfaith that he must answer correctly. Therefore, as means to acquire the document forevaluation the work force, a worker who is requested to submit the paper of background,
has a duty based on the principle of good faith that he has to write the fact. As long as
there is a column concerning “reward and punishment” in the paper of background, theworker must write correctly his own criminal record in the same column.375
To the secure employment opportunities for rehabilitated criminals, the court further
ruled that it was generally accepted that the refusal to hire workers based on their criminal
record where the punishment had already ended was a cruel punishment or restrain. As aresult, the employer’s refusal explicitly counteracted with the effectiveness of the systemending the crime and with the purpose of the policy that aimed at eliminating crime. In viewof the existence and meaning of the system for eliminating crime and any attempt to control
the benefit to both worker and employer through the hiding of a criminal record, and given
the type of work or content of the employment contract, as long as there were no special
circumstances where the existence of such a criminal record could cause negative influenceson the evaluation of work, the court ruled that the worker did not have duty upon the principleof good faith to inform about his criminal record.
In this case, when concluding an employment contract the worker did not write about
the criminal record in the background paper. The employer considered such action as grounds
for dismissal. However, the business of the company concerned the service of transportingof passengers, i.e. it was a taxi company. The content of the duties of the worker were nothing
more than being a driver. Therefore, there was no special circumstance that the worker had
to inform the employer about the criminal record. The worker had no duty upon the principleof good faith to fill in the criminal record or past history in the column of the backgrounddocument requested for submission to the employer. Accordingly, failure in filling in thecolumn did not constitute reasonable grounds for dismissal.
Regarding the grounds that the worker hid his academic record or work past record;
the court ruled that an employer required the worker to inform about his or her academic orpast record in order to have an appropriate evaluation. Hence, the worker had the duty upon
the principle of good faith to write appropriately the academic record and working record in
the column of the background document submitted to the employer. In the employment
contract in this case, the falsification of the academic record did not have any influence on
the appropriate evaluation of the worker. Regarding the working record, instead of writing
the fact that the worker had worked for another taxi company for six months, the worker
wrote nine months. This was just three months difference and had no effect on the evaluationof the worker. The court thought that the consequence of the falsification was not a serious
375

Ibid.

98

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

violation of the duty based on the principle of good faith.
In another case of a worker falsifying a background the criminal record was a factor in
the condition of employment at the time of recruitment. The employer took disciplinary
ground when the worker gave a false answer to questions about their history of past criminal
convictions. However, Nagasaki District Court in 2000 invalidated the Yushi Kaiko for theworker who hid the criminal record.376 The employer claimed that at the time the worker
entered the company in 1983, the worker hid his criminal record and that he had served athree-year imprisonment for a violation of the law on drugs.
The working rules of the company (Clause 100, No. 5) ruled that an employer would
execute a disciplinary discharge when the worker lied about a criminal record that was theelement of the conditions for recruitment. The court interpreted this regulation to be thatworker’s falsified answer at the time of interview was a reason for punishment, but theworker had no obligation to clarify his criminal record if employer did not ask. In this case,there was no proof that the employer questioned the discharged worker about the criminal
record at the time of the interview. The worker’s failure to reveal his criminal record did notcorrespond to disciplinary dismissal grounds in the rules of employment.
In a case presented to Sapporo High Court in 2006, the employer fired a worker ongrounds relating to the worker’s hiding information about his physical condition. The worker
had problem with his eyesight but he did not report the truth. Instead, he wrote down that thecondition of his health was good in the history record.377 In the letter of history submitted at
the time of the interview, the worker wrote good eyesight in the health section. The worker
wished to be employed as a driver of heavy machinery. Thus, the worker did not explain thecondition of his eyesight. The company employed the worker not knowing of the worker’s
real condition of shortsightedness.
The court ruled that although the worker did not notify the examiners at the time ofinterview, in the column of for condition of the health in the history letter, if the worker hada chronic disease that could influence the general condition of health and the working ability,
he had to write this information. The worker’s poor eyesight did not relate directly to a goodor bad general condition of health. Hence, it was not a chronic disease. Because there was no
malfunction of the worker’s eyesight that concretely caused disqualification as a driver ofheavy engines, the employer could not use the rules of employment (Clause 61 regarding
grounds for disciplinary dismissal and Clause 54, No. 4 concerning grounds for ordinary
dismissal) in order to fire the worker when the worker hid his malfunction of eyesight. In
sum, as long as the worker had qualifications as the heavy engine driver, the personal
background was not important for the employer.
Another case of dismissal on the grounds relating to falsification of background is seenin the decision of Tokyo District Court in 2004.378 In this case, the worker who did not havethe ability of Java language wrote letter of history that he had knowledge of this language. In
addition, at the time of interview for recruitment, the worker told the interviewer that he had
this ability. Because the employer hired worker for a position as a programmer of Java
376

Nagasaki District Court, September 20, 2000, Rouhan, 798, p. 34.
Sapporo Higher Court, May 11, 2006, Rouhan, 938, p. 68.
378
Tokyo District Court, December 17, 2004, Rouhan, 889, p. 52.
377

99

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

language, the knowledge of Java language was necessity for this duty. When the worker hid
the necessary background, this misconduct corresponded to Clause 86, No. 3 of the work
rules. The court accepted the validity of the dismissal.

2.3.5. Using computer for private purpose
The employer also can dismiss the worker when that worker uses the computer during
working hours for private purpose. The worker’s conduct violates the requirement ofconcentration while on duty. Regarding the use of computer for private purpose while atwork, the Tokyo District Court ruled in 2003:
A worker though bears obligation of attention to work, which is the obligation upon
the employment contract, is individual who has more than social life. Hence, it does
not mean that communication with outside people during working hour is absolutely
prohibited. As long as there is no special regulation in the rules of employment, it is
not an obstacle of duty fulfillment, under the degree that is accepted as properaccording to social common sense, such as it does not cause great economic burden to
employer, using the computer of the employer for private use and for sending or
receiving private E-mail does not violate the obligation of attention to work.379
In this above case, the court found that there was no prohibition on using a computerfor private use. The worker sent and received mail twice a day during working hours, and it
did not cause a great economic burden to the company. From a consideration on theappropriateness based on social common sense, the court ruled that such conduct by theworker did not violate the duty of concentration at work and invalidated the ordinary
dismissal.
The Fukuoka District Court in 2004 invalidated the dismissal of a worker who was ateacher at technical school who used a computer during working hours for private purpose
and contributed to a dating website and received and replied to E-mails many times.380 The
worker was registered with seven dating websites and one marriage consultancy website. The
worker exchanged mails many times with a chat partner at the dating website. In particular,
the worker used their E-mail address and made contributions to the website. From the content
of the contributions, readers could know that the contributor was a person related to thecompany. Therefore, such contributions were immoral and inappropriate. This conduct
violated the rules of employment in the company.
The court ruled that a series of such conduct not only violated the obligation to pay
attention to work and obey the rule of the workplace, but also made the worker losequalifications as an employee of the company. In addition, since this conduct affected thecompany as well as the credit of the technical school of the company, the worker’s offense
corresponded to disciplinary dismissal ground in the rules of employment. However, thecourt further ruled that disciplinary dismissal caused the worker to lose his position which
379
380Tokyo District Court, September 22, 2003, Rouhan, 870, p. 83.
Fukuoka District Court, December 17, 2004, Rouhan, 888, p. 57.

100

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

was a heavy disadvantage. From such a view, the court required dismissal to be an
appropriate measure in consideration of the type of violation of the rules, the level andcircumstance relating to the punished person, and other various circumstances.
The court found that the content of the mails was about everyday life and a lovers’
quarrel. Receiving and replying to the mail did not cause any particular hindrance to thebusiness of the company because there was no proof that such conduct caused any particular
bad influence on the pupils who were students of the technical school. Even though thenumber of applicants to the company’s schools decreased in 2004, the worker’s contribution
on website did not have any influence on the business of the company. From the situation
above, the worker’s violation of each rule was not grave.
In addition, there was no rule regarding the use of personal computers in the company.
There was also the fact that other workers also used the computer for private purposes very
often. Accordingly, the company had mistake when it did not appropriately deal with the useof computer in the workplace. Moreover, the worker worked earnestly for a long period fromthe commencement of work until the time of dismissal. According to the history of the worker,
he received disciplinary measures only once. The punishment was a one-month salary cut
when the worker refused to take a post as school manager in 2000. In this case, the worker
also submitted an apology letter and expressed his regret for the offence. Taking all thecircumstances into consideration, the disciplinary dismissal was drastic compared to otherdisciplinary measures. The disciplinary dismissal in this case was invalid as an abuse of rightto dismissal.
The employer appealed the case to the Fukuoka High Court in 2005 and this higher
court rejected the decision of the District Court by validating the dismissal.381 The High Court
ruled that the worker used the mail address requested by his chatting partner. This conduct
could allow other readers of the website to know the name of the school, which would cause
damage on the credibility of the school. Based on the employment contract of the company,
the worker had an obligation to concentrate on duties in the school during the working hours.
However, the worker received and replied to enormous amounts of mail during the working
hours for a long period of time. If this amount of time and work were applied to the original
work, it was sure that better results could be obtained. The court could not overlook on theworker’s negligence on duty.
In addition, the court ruled that everyone in the school knew that the employer did notallow using the borrowed computer and exchanging private mails for a long period of timeand for continuous periods. In regard to the establishment or absence of rules regarding theuse of personal computers, the worker’s conduct amounted to a level of disloyalty. There was
no evidence that there were other workers in the school who repeatedly used private mails in
the level that was equal to the dismissed worker.
Furthermore, though the reasons for disciplinary measures were different, the worker
received a salary cut as a disciplinary punishment before the dismissal. If the worker
repeatedly committed the misconduct, there was a common understanding that employer
would invoke a heavy punishment. When his chatting partner asked him twice if it was okay
381

Fukuoka Higher Court, September 14, 2005, Rouhan, 903, p. 68.

101

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

to use the computer of the school for private mail, the fired worker still repeatedly received
and replied the same mail. According to the investigation of the school, the worker did not
apologize or reflect on his behavior even after the employer discovered the inappropriate
conduct until the period when the worker stopped going to work.
After stopping going to work, the coworkers begged the worker to submit a letter of
apology. Hence, the worker did not submit it following his own intentions. Additionally,
there was no evidence that the disciplinary dismissal in this case was in retaliation for past
misconduct by the worker. Based on the level of seriousness of the worker’s misconduct andhis position as a person who provided education to students, the disciplinary dismissal in thiscase was quite unavoidable and was not an inappropriately cruel measure.
In sum, the disciplinary dismissal on the grounds of private use of computer can takeplace when the employer publicizes the prohibition regarding the use of computers during
working hours. The seriousness of the worker’s offence depends on the amount of the time
the worker spends on using the computer for private reasons. If the amount of time isconsiderable, it can affect the worker’s results and performance. It is unreasonable when an
employer discharges a worker for using a computer for private purpose for a short period oftime. The employer investigated every fact of the condition of the private use of the computerand dismissed the worker. The court inevitably refers to the principle of equality bycomparing the condition of private use of the computer of the discharged worker with otherstaff.

2.3.6. Crime or misconduct in private life
Under the employment contract, the worker has a duty to offer labor or services to thecompany and the company cannot restrict the worker from doing private activities outside ofworking hours. Therefore, private activities cannot become grounds for disciplinary
measures.382 However, the activities in private life of the workers may have direct relations
with the rules of the company and affect the trust and social value of the company. Hence,
misconduct and crime outside of work can become grounds for the disciplinary measures.
The Supreme Court in 1974 accepted the validity of disciplinary dismissal of a worker
who was convicted for impeding police collection of information for a criminal investigation
by ruling as follows:
Disciplinary measure is a kind of punishment to secure the maintenance of order of thewhole company and to make the operation of the company go smoothly. The worker
has a duty to secure the maintenance of company’s order. To secure the maintenance ofthe company’s order, in general, can be achieved through the regulation that focuses on
the worker in the workplace or the fault or misconduct that has relation with theaccomplishment of work. However, it is not enough by just focusing on the fault in theworkplace or others that relate to the working achievement. That means that the fault
that does not relate to the accomplishment of work or occurs outside the company also
has direct relation with the company’s order. It is clear this fault can become an object
382

君和田, 問題解決 労働法〈5〉解雇・退職, 45.

102

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissalof the regulation. In addition, because the company has activities in the society, thereis fear that the damage or decline of social value causes obstacle to the smooth
operation of the company. When there is fear connected to the damage that declines
this value, the misconduct is concretely recognized, even if it is not related to the
execution of duty made outside the workplace, and in order to secure the maintenanceof order in the company widely, there has to be a case that this fault become an objectof the regulation.383
In this case, the company was a government owned railway, which was connected tothe public benefit; therefore, any criticism from the public was also the concern for thesmooth operation of the company. In order to deal with the values from the society, it isreasonable for the employer to establish broader and stricter rules governing the worker’s
activities although this worker’s fault was not related to the execution of duties. Strict rules
regarding this issue might not be important for employers in governing the activities of
employees in private companies. If the court’s judgment showed the crime of the worker tobe an interruption of the execution of the pubic work, the employer could take disciplinary
dismissal.
The Tokyo Higher Court in 2003 validated the disciplinary dismissal on the grounds
that the worker who was on the staff of an electric railroad company repeatedly committed
sexual harassment on the train.384 On November 21, 2000, the worker committed another actof sexual harassment on the train. After arrest and detention by the police, the company
dismissed the worker according to a violation of Clause 7, No. 5 regarding disciplinary
measures towards railroad staff. Based on this rule, when a railroad staff committed a crime
regardless of it being inside or outside the period for performing duties, the employer could
punish the worker according to the seriousness of offences. Such punishments include
demotion, stoppage of salary rising, and disciplinary dismissal. The sexual harassment
caused a great psychological pain to the victim. As with crimes against property such as
stealing or embezzlement on duty and crime against body such as using violence or force,
sexual harassment is a serious crime because it has a negative influence on the victim.
Moreover, the fired worker was on the staff of the electric railroad company. He had
an obligation to protect the customers from the trouble and damage on the train. The court
ruled that this moral standard accompanied the duty or position of the worker. The worker
was in a position where this crime should be inconceivable. In addition, the court found that
half a year before the worker committed sexual harassment that was grounds for dismissal.
The worker was fined for it that time. Consequently, the employer did not increase the salaryof worker. After this punishment, while the worker submitted a written apology requesting
moderation in terms of disciplinary measures, he committed sexual harassment again. Basedon these circumstances, the court stated that dismissal that was the most serious punishment
was an appropriate measure.

2.3.7. Working for another company
Many companies prohibit an employee from working for another company without
383
384

Supreme Court, February 28, 1974, Rouhan, 196, p. 24.
Tokyo High Court, December 11, 2003, Rouhan, 867, p. 5.

103

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

permission, and the violation of this prohibition becomes grounds for disciplinary
measure.385 The employers worry that their business would be hampered when their workers
work for their competitors and disclose their business’s know-how or trade secret. Even
though the employer does not regulate the duty not to compete in the rules of employment,
the duty not to compete is one of the workers’ duties of loyalty to their employers derivingfrom the relationship under the employment contract.386 In addition, the Unfair Competition
Prevention Act prohibits the worker from using or revealing trade secrets of the current
employer in another company because such a conduct is a form of unfair competition.387
A worker can perform other jobs outside of the working hours that are not restricted by
the company or that are not by nature competing with the business of his or her current
employer. This is a conventional freedom for workers. Therefore, the company cannot use
disciplinary measures only on the grounds that the worker provides labor or service in anothercompany and receives wage from them because sometimes working for many jobs isunavoidable in order to sustain one’s livelihood.388
However, when the worker has another post in another company; there is an obstaclein providing labor or services to the employer.389 It is undeniably true that having many jobs
at the same time is a big burden for the worker who might face problems of health andworking ability. If the worker becomes sick because of overwork or cannot supply enoughlabor or services to the company, the employer can dismiss the worker. In this case, there is
only ordinary dismissal, not disciplinary dismissal.

3. Necessity of the operation of the enterprise
An example of adjustment dismissal is the case where the company wishes to reduce
the labor costs due to economic difficulties or due to the restructuring of the labor force inthe company. Under Article 16 of the Labor Contract Act, the employer has a right to makean adjustment dismissal provided that the dismissal takes place according to concretereasonable grounds and is appropriate according to the social common sense.
The courts have developed a judicial rule to examine whether or not an adjustment
dismissal is an abuse of right. For example, in 1975, Nagasaki District Court ruled:
Adjustment dismissal is not taken on grounds relating to the worker’s capacity or
misconduct. Rather, it aims to adjust the surplus number of workers. Because theadjustment dismissal affects the livelihood of the workers and their dependents due to385

Araki, “Legal Issues of Employee Loyalty in Japan,” 279.
Ibid., 274.
387
The term “unfair competition” used in this Law shall mean any of the following acts:(vii) the act of using
or disclosing a trade secret which has been disclosed by the business entity holding it (hereinafter referred toas the “holder”), for the purpose of unfair business competition or otherwise acquiring an unfair benefit, or forthe purpose of causing injury to such holder; Unfair Competition Prevention Law of Japan, 47 art. 2, ¶¶ 1, No.
7 (1993).
388
君和田, 問題解決 労働法〈5〉解雇・退職, 46.
389
Ibid.
386

104

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissaldifficulty in reemployment, particularly in the time of economic recession, the principleof good faith applies in the employment contract and requires particular restriction. In
other words, the employer has exclusive right in direct and control the labor force inthe company, but he or she cannot exercise this right arbitrarily. The validity ofadjustment dismissal in this case must be considered from 4 points of view. First, it isnecessary to conduct dismissal. If adjustment dismissal is not taken, continuation of
the existence of the company is about to be in jeopardy. Second, the employer must put
effort on absorbing the surplus workforce according to the measures such as transfer
of worker, short-term suspension of workers, or collection of the voluntary retirement.
Third, the employer put effort on explaining and notifying the worker representatives
or labor union regarding the time, scope, and method of adjustment dismissal. And
fourth, there must be a concrete or reasonable method of personnel selection according
to the standard of adjustment.390
In this case, the adjustment dismissal was invalid since there was no recognition of thenecessity for dismissal or personnel reduction.
The courts’ rule on adjustment dismissal was influenced by the practice in large
companies that tried to keep their workers even during economic crisis, particularly since theoil crisis in 1973.391 In order to avoid the abuse of right, the employer has to fulfill four
requirements: (1) the necessity of personnel reduction, (2) administration of the effort toavoid the dismissal, (3) reasonable selection of the workers, and (4) the administration of
explanation or consultation with the union or appropriate dismissal procedures. An
adjustment dismissal is the result of the employer’s real situation of management, and is not
the fault of the worker. Therefore, there is high necessity for protection of the workers.
In addition, the burden to prove these four requirements also belongs to the employer.
The employer has to prove that the adjustment dismissal takes place according to a necessity
for personnel reduction after they have conducted dismissal avoidance measures and areasonable selection of dismissed worker. Furthermore, the employer has a duty to show theevidence that he or she has conducted reasonable procedures such as consultation withworkers’ representative. However, the burden of proof also belongs to the workers when theyclaim that the employer does not execute consultation or explanation with the workers ingood faith.392
There are two different views over the rule deciding the validity of adjustment dismissal.
One view is that the validity of dismissal is decided based on the rule of the four requirements
where the employer has to fulfill all the four conditions. The second view is the rule of thefour factors where the four factors are nothing but the elements for examining the validity of
dismissal, and the validity of dismissal is judged from the consideration of the four factors
as a whole.393 Thus, according to the rule of four factors, even though the employer does notrespect or follow one of the factors, the dismissal is still valid when considered from the390

Nagasaki District Court, December 24, 1975, Rouhan, 242.
Roger Blanpain, Corporate Restructuring and the Role of Labour Law, 1st ed. (Kluwer Law International,
2003), 115.
392
Tokyo High Court, October 29, 1979, Rouhan, 330, p. 71; Tokyo District Court, November 29, 2006,
Rouhan, 935, p. 35.
393
Tokyo District Court, January 21, 2000, Rouhan, 782, p. 23.
391

105

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

perspective of the other factors as a whole. There are many cases where courts have atendency in applying the rule of four requirements in the case of the adjustment dismissal.394

3.1. Necessity of personnel reduction
One of the four requirements for a valid adjustment dismissal is the necessity for
personnel reduction. When the economic situation of the company becomes worse, an
employer may wish to reduce expenses. Hence, an employer may reduce the companies’
expenses by reducing the labor cost and this leads to personnel reduction. A personnel
reduction is necessary only if it is the last resort after the employer has taken other measuresin order to decrease expenditure in the company. Accordingly, there is an interrelationshipbetween the requirement of necessity for workforce reduction and the requirement of
employer’s effort to avoid the dismissal. For instance, if the employer does not make efforts
to avoid dismissal by halting recruitment of new workers or by cutting the cost of theworkforce, the employer violates the requirement of necessity through workforce reduction.
The necessity in personnel reduction is recognized when the situation of the businessof a company reaches a certain level.395 First, the continuance of the company is about to bein danger if the dismissal does not take place.396 In one case, a company that sold sewing
products such as underwear and pajamas let go 29 workers on the grounds that there was a
reduction in orders due to the bad condition of the textile industry. However, the employer
was not sure about the number of workers necessary for dismissal.
In addition, the court had questions over the company’s standards for selecting theworkers for adjustment dismissal. The employer did not examine carefully the condition of
the company properly before the dismissal of the 29 workers. After the dismissal, there were
nearly 130 women workers who voluntarily resigned according to reasons of marriage andchildbirth. Consequently, the company lacked workers, and employed four new workers.
Considering the recent recruitment of eight new workers and the fact that of whether theemployer in good faith had examined the detailed facts before conducting the adjustment
dismissal in the company, the court ruled that there should have been no such dismissal. Thus,
the company did not need to dismiss 29 workers.
Second, personnel reduction is necessary when there is in reality a high level ofbusiness crisis and there is no alternative method besides a reduction of workers throughdismissal. 397 For example, in a case decided by Okayama District Court in 1979, theshipbuilding section was the backbone of the employer’s business.398 The company was
faced with a difficult situation as follows. There was a surplus of world-sized ships that led
to the decline of share in shipbuilding in the company due to the huge fall in orders forshipbuilding (in 1978 declined by 12% if compared to 1973), and the fall of in prices (reduced
394

大内, 山川, 解雇法制を考える, 9.
君和田, 問題解決 労働法〈5〉解雇・退職, 60.
396
Nagasaki District Court, December 24, 1975, Rouhan, 242, p. 14.
397
Okayama District Court, July 31, 1979, Rouhan, 326, p. 44; Rouhan, 685, p. 49.
398
326 Rouhan.
395

106

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

half of the price compared to that in 1973).
Furthermore, the company excessively decreased the production of ships run by diesel
and started to develop printing machines. The company found it difficult to start new
production. According to the content of the plan for the improvement of the company’sbusiness drawn up in 1978, the court found that the company faced with a real deficit ofaround 200 billion yen. The employer explained that the total amount of money in reservation
at the time of conducting the plan for improvement was 300 billion yen. In the year of 1978,
the company had already used up two-thirds of this amount. Therefore, the company faced ahigh level of business crisis.
Third, the court accepts the necessity of workforce reduction according to thereasonable administration of the company.399 In a case decided by Tokyo High Court in 1979,
a company produced and sold high-pressure gas such as oxygen, argon, nitrogen, acetylene,
and liquefied petroleum gas.400 The company also produced and sold equipment for usinggas. The dismissed workers were those employed at the sales section of the acetylene gas at
the Kawasaki city factory of the company. The company notified the workers on July 24,
1970 about the dismissal accompanied by the closure of the acetylene sales section on August
15, 1970.
To consider whether the dismissal corresponded to Clause 52, No. 8 of the rules of
employment that allowed dismissal to take place due to unavoidable business necessities, thecourt synthesized the concrete circumstances and conditions of the employers and workers.
Hence, the court considered the requirement that the closure of the particular section was an
unavoidable necessity based on the reasonable administration of the company.
The acetylene section faced serious competition due to an increase in many companies
that had the same business (from 15 before 1953 to 85 in 1963). From 1960-1961, the marketof acetylene gas deteriorated since the industry of iron, steel, shipbuilding and engine
construction started to use oil due to its great abundance with a low price and low risk ofdanger of explosion. Accordingly, the price of the acetylene decreased from 300 Yen to 193
Yen per kilogram. In the acetylene business, the normal efficient productivity of a worker per
one month was six tons. However, in the company, the productivity varied from 1 to 1.8 tons
per worker. As a result, the percentage of the personnel cost included in the cost productionof the acetylene was at a high ratio. The standard of wages of the workers in the acetylene
section was favorably comparable with other companies. Therefore, this high wage led tohigh production costs and made the company unable to overcome the deterioration of themarket position of the company. Because of this, the income and expenditure of the acetylene
section reached a deficit, which kept accelerating every year.
Without expectations for improvement in income and expenditure in the acetylene
section, the company could not ignore the situation. Furthermore, the oxygen section thatwas the main force in the company was falling behind in competition with other companies
that had the same business in terms of investment in plant and equipment. The company
feared that huge differences in the quality of the business with other competing companies
399

The court accepted the necessity and validated the dismissal. Tokyo High Court, October 29, 1979,
Rouhan, 330, p. 71.
400
Ibid.

107

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

had serious effects on the administration of the company. In order to aid the administrationof the company, the closure of the acetylene section (that became the main cause of many
years of loss in in of the company) was an unavoidable necessity based on the administrationof the company and was a reasonable measure. The Tokyo High Court accepted the necessityand validated this adjustment dismissal.
Fourth, the reduction of the workforce is necessary when an employer makes an effort
to keep the worker who loses his or her post due to the closure of their workplace as a resultof company’s reorganization. For example, in a case decided by the Tokyo District Court in
2000, the employer closed a section which led to the loss of jobs for the workers.401 In thiscase, the company proposed to the workers an agreement to terminate the employment
contracts. The company offered resignation conditions that would provide a fixed amount ofmoney and support reemployment activities. Because the worker in the case rejected this
proposal and wished to continue working with the company, the company offered the positionof clerk with annual income of 6,500,000 yen in another section. Though it was lower than
his annual income of 10,520,000 yen, the annual income as the clerk was higher than that ofother workers who were working in the same position. However, the worker rejected this
proposal. Based on the reasonableness of the employment termination, the employer’s
consideration on worker’s livelihood after discharge and the procedures carried out before
dismissal, the court accepted the validity of the dismissal.
In another case, the Okayama District Court in 2001 accepted the necessity of personnel
reduction when the company faced a long-term slump and there was a tendency that this longterm slump would keep continuing.402 When the company faced deficits, it employed thepolicy of staff rationalization and the closure of unprofitable stores and shops. The company
encouraged the worker in the case to choose a commission business or early retirement, but
the worker refused both of these. Regarding job relocation, there was no position available
in the area the worker was working in even though the company relocated him. Since before
this the worker did not accept a transfer to Osaka, which was far from the current workplace,the employer decided that worker would not accept a transfer to a faraway workplace.
In addition, even though the court accepted the necessity in personnel reduction in thefirst step, the adjustment dismissal was still invalid as the scale of dismissal or number ofworkers to be reduced was more than what was recognized to be necessary in reality. For
example, according to a decision of the Osaka High Court in 2007, judging from thecompany’s economic situation, it was necessary to get rid of six workers through adjustment
dismissal.403 However, the employer dismissed 10 workers. Thus, the employer had to prove
the necessity of letting go 10 workers. Even though the court accepted the necessity of
personnel reduction by six workers, the dismissal of 10 workers that was done for the same
401

Tokyo District Court, January 21, 2000, Rouhan, 782, p. 23.
Okayama District Court, May 22, 2001, Roukeisoku, 1781, p. 3.
403
The company was faced with the economic decline seen from the cancellation of the transaction of sellingelectricity with its main partner and losses at the company every month. The business situation of thecompany at the time of dismissal was a situation where the company faced with the considerable amount oflosses, and the personnel costs compared to the amount sold was high. Meanwhile if the company reduced thepresent deposited money, the company could maintain the business. Considered from the amount of thebusiness losses and the conditions of the cost of personnel, there was a high possibility in reducing thepersonnel costs in the company. The company did not make a proper procedure such as consultation or
explanation to the workers about the adjustment dismissal. The dismissal was invalid. Osaka High Court, May
17, 2007, Rouhan, 943, p. 5.
402

108

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

reasons and on the same occasion was invalid because there was no proof of necessity for a
personnel reduction of 10 workers. In other words, the court could not validate the dismissalof 6 workers and invalidate the dismissal of 4 workers.
When deciding the necessity in reducing the workforce, the court examined thesituation of cash flow, gain and loss, movement of income of worker or personnel costs,
personnel movement regarding irregular workers such as newly employment and part-time
job workers, the quantity of the duty, and dividend of the enterprise. 404 Regarding thesituation of the property or gain and loss of company, if the employer does not show financial
statements (letters calculating gain and loss, or certificates of debt and credit), it is difficult
for court to recognize the necessity in personnel reduction.405

3.2. Effort of dismissal avoidance
A valid adjustment dismissal requires the employer’s effort in dismissal avoidance. For
example, the Tokyo District Court in 2004 ruled that a dismissal was the termination of an
employment contract and had great effect on the rights and duties of the worker. Therefore,
the court did not accept the validity of a dismissal that violated the social consciousness
because it was an abuse of this right.406 Dismissal in this case was taken along with theclosure of an Osaka branch. The court further ruled that even though the decision whether or
not to close the branch belonged to the responsibility of the employer who was the chief ofthe enterprise, the employer could not immediately dismiss all the workers of that branch.407
The dismissal was made in line with personnel adjustments caused by the decline of thebusiness and was solely an administrative decision by the employer. As a result, although not
the fault of the workers, the dismissal had a major effect on the livelihood of the workers.
Accordingly, if the dismissal was not necessary, it was invalid. Even though there was sucha necessity, the employer had a duty to make efforts to avoid making dismissals before ending
the employment of the workers.
The concrete plans for dismissal avoidance are as follows: a plan for personnel payment
cuts and cost reduction, a freeze in new recruitment, wage cuts or a shortening of working
hours, transfers, temporary transfers, short leave, or voluntary retirement. The requirementof the employer’s effort in avoiding dismissal has an interrelationship with the firstrequirement, the necessity of personnel reduction. Voluntary retirement and transfer are
examples of the employer’s effort toward dismissal avoidance.

3.2.1. Acceptance of voluntary resignation
Voluntary resignation is a reasonable method in terms of personnel reduction, which404

君和田, 問題解決 労働法〈5〉解雇・退職, 59.
Ibid.
406
Tokyo District Court, March 09, 2004, Rouhan, 876, p. 67.
407
Ibid.
405

109

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

respects the will of the workers.408 Therefore, there are many cases that decide on the noncompliance with a duty of effort towards dismissal avoidance in the case of sudden dismissal
without any calls for voluntary resignation. For example, the Supreme Court in 1983
invalided a dismissal when the employer did not make an effort in calling for voluntary
resignation from the worker. 409 In this case, the employer’s business was to run akindergarten. It started to adjust the numbers of day-care workers due to the decrease in thenumber of kindergarten children. At the time the employer decided to dismiss two workers
including the claimant who was the party in the conflict. The employer designated the twoworkers and carried out said personnel adjustment. Before this dismissal, the employer did
not make any effort at all to request their cooperation and did not explain the circumstancesof personnel adjustment being unavoidable. Also, the employer did not take measures to ask
for voluntary resignations. The Supreme Court ruled that the dismissal, of which the worker
were notified suddenly six days before termination, violated the principle of good faith in theemployer and worker relation and was considered invalid as an abuse of right.410
If no worker applies for the voluntary retirement, when the employer dismisses all thetargeted workers the employer’s conduct is not appropriate in terms of the acceptance ofvoluntary resignations that respect the freedom of the worker in making decisions and interms of plans for reducing staff. This rule is extracted from the decision of the Kyoto District
Court in 1996.411 The acceptance of voluntary resignation means that the employer respects
the freedom of the worker in making decisions as whether to resign or to continue to work.
In this case, while inviting workers for voluntary resignation, the employer dismissed all theworkers who were subject to dismissal and did not apply for early retirement. Accordingly,
the worker in the case had no freedom not to resign. He had to resign when there wasinvitation to do so from the employer. Therefore, the method used by the employer was not
appropriate within the meaning of the recruitment for voluntary retirement. In this case, inorder to reduce personnel expenses, the employer dismissed three workers. The employer
could also have achieved his aim if he changed the working conditions of two workers who
continued working in the company by reducing their wages. However, when the employer
dismissed five workers all at once, such an action was inappropriate according to the methodfor dismissal avoidance.
If an employer does not provide conditions that aim to promote free will in decisionsof resignation, the acceptance of voluntary resignation of worker is not evaluated as being aneffort towards dismissal avoidance. For example, in a case decided by the Nagoya High Courtin 2006, an employer made the acceptance of voluntary resignation before dismissal under
the condition that it provided an additional supply of one month of basic wage in addition to
the resignation money according to the company’s convenience.412 The court further ruledthat in the content of this condition, if the employer immediately fired the workers according
to adjustment dismissal there was nothing besides the fact that the employer would have togive the retirement money and naturally have to pay the benefit going with the dismissal notice.
The employer’s proposal was not an appealing condition to make workers who wished towork to retire from their jobs. In the reality, not even one worker agreed to resign during the408

君和田, 問題解決 労働法〈5〉解雇・退職, 60–61.
Supreme Court, October 02, 1983, Rouhan, 427, p. 64.
410
Ibid.
411
Kyoto District Court, February 02, 1996, Rouhan, 713.
412
Nagoya High Court, May 31, 2006, Rouhan, 920, p. 33.
409

110

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

period when voluntary retirement was being sought. Therefore, the voluntarily retiring
workers scheme was unreasonable as a way of avoiding dismissal.
The offer of voluntary retirement must be made to all workers in the company.
According to the company, there was a fear that the acceptance of voluntary retirement would
cause an outflow of talented workers necessary for the operation of company.413 Hence, theemployer managed to use individual persuasion or determine the people who were subjectedto the collection. According to a decision of the Yokohama District Court in 2006, although
the employer did not take the voluntary retirement due to such a fear, the court decided thatthe employer did not make enough effort to avoid dismissal. 414 The court ruled that theemployer did not have to seek voluntary retirement for the workers if his business consistedof occupations that needed special skill, knowledge, and experience. The voluntary
retirement would cause a great loss to the company due to the outflow of non-replaceable
talented workers from the company.
However, in this case, the surplus workers who were first to be discharged were those
who were working in the manufacturing section of the factory. Because this kind of businessdid not need someone to have special skill, knowledge or experience, the employer should
not have feared the outflow of non-replaceable talented workers so long as the employer
accepted voluntary retirement from workers in the manufacturing section. Consequently, thecourt ruled that it was unreasonable when there was no acceptance of voluntary resignationfrom these workers.
According to the above case, the employer has to offer retirement to all workers
subjected to adjustment dismissal. An employer can also keep the talented people necessary
for the operation of the company by excluding them from the list of those eligible forvoluntary retirement. However, in planning to dismiss particular workers, the employer
persuaded the other applicants for voluntary resignation to stay in their jobs. In this case, theOsaka District Court in 1979 decided that there was no administration of duty of effort for
dismissal avoidance because the employer engaged in unfair persuasion that violated theprinciple of good faith in the process of accepting voluntary retirement of workers.415

3.2.2. Transfer
A transfer of a worker can be made in three forms: (1) Haiten where the worker istransferred inside the company, (2) Shukko where the worker keeps their status from theprevious company but is transferred to another company, and (3) Tenseki where the worker
is transferred to other company without carrying over the status from the previous
company. 416 Adjustment dismissal without prior execution of transfer means that an
employer does not conduct any effort towards dismissal avoidance. In addition, if theemployment contract restricts the type of duty and service, and if such type of duty isabolished, from the point of view of dismissal avoidance (maintenance of employment), there413

君和田, 問題解決 労働法〈5〉解雇・退職, 61.
Yokohama District Court, September 26, 2006, Rouhan, 930, p. 68.
415
Osaka District Court, April 25, 1979, Rouhan, 331, p. 48.
416
Araki, Labor and Employment Law in Japan, 130.
414

111

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

must be an attempt at transfer or temporary transfer of the worker concerned. Immediate
dismissal without transfer or temporary transfer is evaluated to imply no effort towards
dismissal avoidance.417
Regarding the approach of seeking transfer, the Osaka District Court ruled in 2000 that
employers are required to transfer a worker before dismissal.418 The court found that in the
self-declaration paper made by the worker, although work other than that at the current
working location was impossible, the worker in the past had also worked in work locations
other than Chiba, Nagoya, and Osaka. In the company, there was no condition that requiredconsent from the worker for a transfer. In addition, it was not the case that the worker refused
the suggestion of transfer to other regions. Accordingly, the employer had to transfer theworker to another work location if his job at the existing workplace was impossible.
Furthermore, when the worker hoped for duties in other operations, the employer had to
examine the placement of the worker and the temporary transfer to the relative company.419

3.3. Reasonable selection of workers
Even though a dismissal is inevitable, there must a reasonable standard of selection ofworkers to be dismissed and there must be a fair selection. A dismissal that lacks
reasonableness in personnel selection is generally invalid. Even though dismissal isinevitable, the employer explicitly violates the principle of justice when they fire workers
who should not be essentially dismissed. For example, such a case could be when theemployer preserves the cooperative union and weakens the opposing union by deliberately
selecting workers who are leaders and activists in that opposing union as the target foradjustment dismissal.420 Adjustment dismissal used for the purpose to weaken one union andprovide favorable treatment to another union lacks reasonableness in terms of standards of
personnel selection, and the dismissal lacks appropriateness.421 The dismissal such a casewould be invalid because of the abuse of right.
The court decides the standard of personnel selection to be when the employer
expresses their intention for dismissal and rejects any claims made by the employer after thisexpression, particularly during the litigation process. The Tokyo District Court in 2001 ruledon an exception where an employer made clear the standard of personnel selection after thedismissal.422 At the time of dismissal, the employer could not make clear this standard to theworkers. Though he established such a standard after the dismissal, this standard was fairly
applied to select the dismissed workers. Only if there was a claim or proof of special
circumstances that there were reasonable grounds dictating that the employer could not makeclear the standard, these grounds would then be seen to affect the reasonableness of personnel
selection.423 In this case, the court decided that the personnel selection of the worker lacked
417

君和田, 問題解決 労働法〈5〉解雇・退職, 62.
Osaka District Court, May 08, 2000, Rouhan, 787, p. 18.
419
Ibid.
420
Tokyo District Court, March 09, 2004, Rouhan, 876, p. 67.
421
Ibid.
422
Tokyo District Court, May 17, 2001, Rouhan, 814, p. 132.
423
Ibid.
418

112

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

reasonableness.
According to the judge-made law, in general, the concrete standard of selection is aconsideration of the history of past disciplinary punishment, the number of days of latenessand absence without permission, the working results (level of contribution to the company),age, length of service, family support, degree of shock that would occur due to dismissal, andthe form of employment.424 In reality, whether or not the standard of selection is reasonable
is decided individually according to the facts of each case. The following determinants areexamples of criteria for the selection of personnel.

3.3.1. Working results
Employers seek for courts to accept the selection of dismissed workers based on theevaluation of working results and ability. The workers who are dismissed first are those whohave poor working results or have made little contribution to the company. The employer has
to make sure that the standard for the evaluation on the working results of the worker isappropriate. The following cases examine the evaluation of working results that affected thereasonableness of selection of workers for adjustment dismissal.
In a case decided by the Fukuoka District Court in 2004, 425 at the time of an
employment freeze, the employer found that it necessary to let go 30 part-time workers.
However, the employer selected candidates for termination according to their attendance rate
within the regular period. Second, from these candidates, the employer evaluated theirattitude in terms of duty, cooperation, work efficiency, and the condition of quality
production, and selected workers for dismissal, but employment freeze impeded
reasonableness in the standard of selection. The standard in selecting candidates included
only the attendance rate within the regular period and excluded the working time outside theregular period such as periods of overtime work. However, from the point that the working
hours within the regular period were the working hour in the contract of the part-time workers,
the exclusion of the working time outside the stated period was reasonable. According to thisstandard alone, each dismissed workers could not become objects of dismissal. On the other
hand, the standard of the second method of selection was not reasonably clear and was an
item that easily fell into arbitrary judgment. When applying this standard as a standard of
selection, the personnel performance evaluation was always done by employer. As theemployer had not made personnel performance evaluation for each day, based on the premisethat there was no preparation for the conduction of adequate investigations up until theselection, the court could not accept that the standard had reasonableness.
In a case presented to Kofu District Court in 1987, the court rejected the reasonable ofthe standard of the employer that showed total points for the most recent of three personnel
performance evaluations.426 Regarding the point of performance evaluation, the court could
acknowledge only the total points because employer did not clearly explained the concrete
content of the performance evaluation.
424

土田 et al., 条文から学ぶ労働法, 257.
Fukuoka District Court, May 11, 2004, Rouhan, 879, p. 71.
426
Kofu District Court, May 29, 1987, Rouhan, 502, p. 88.
425

113

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

The Tokyo District Court in 2003 rejected the reasonableness of personnel selection
where the employer had used his discretion to evaluate the future use of the workers in agroup, without having concrete or reasonable criteria.427 The standard of personnel selection
was as follows: the targets for dismissal were those who were not in managerial posts andwere judged as difficult for use in the group in the present and the future. The selection
included those who could not find appropriate work in the company, based on the results ofthe employer’s careful and comprehensive judgment about the possibility of future use
according to the workers’ technique, skill, and knowledge. The court could accept thisstandard of personnel selection as a reasonable standard that concretely and reasonably
ensured the employer’s judgment. However, regarding the point that the possibility of present
use being also added to the possibility of future use, this was an uncertain factor in the
judgment giving the employer great discretion. The judgment was concretely and reasonably
guaranteed only when it was made according to sufficient evaluation standards, but notaccording to the employer’s discretion. However, when scrutinizing the record, the court
found that there was not enough evidence to show that the employer could guarantee thereasonableness of his judgment.

3.3.2. Age and length of service
An employee’s age or length of service is one of the criteria for the standard for
personnel selection. A worker is selected for dismissal according to age and long-term or
short-term employment relations. From the perspective of the employer, the company
benefits when there is a dismissal of a worker with a high salary and of old age (long-term
employee). In contrast, from the viewpoint of the workers, dismissal has an adverse impact
on their livelihood because being old might become a negative influence on the decision of
the employer in recruiting them. That is why courts require employers to provide benefits toold-aged workers when selecting them as the target for economic dismissal.
According to case law, a reasonable selection occurs when the worker who has almost
reaches retirement age receives a reasonable compensation or benefit. For example, in a casereferred to the Fukuoka District Court ruled in 1992, there was dispute between the employer
and workers on the reasonableness of the dismissal of workers who were more than 53 years
old. The court ruled that even though it was the case that old age people faced more difficulty
in re-employment compared with young people, the retirement age in the company was 55.
In addition, though the workers continued working, they could work at most for only two
years.428 Furthermore, in consideration of other points, such as the payment of retirementmoney and the connection to public welfare, the standard of dismissal in this case wasreasonable as a concrete standard without arbitrary decisions.429
In addition, the Tokyo District Court ruled in 2001 that based on the standard where
the management worker was more than 53 years old, the employer could not ignore the427Tokyo District Court, July 10, 2003, Rouhan, 862, p. 66.
Fukuoka District Court, November 25, 1992, Rouhan, 621, p. 33.
429
Ibid.
428

114

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

worker’s expectation for wages in the period left until the retirement age.430 Because beingold (more than 53) meant it was difficult for re-employment, the court rejected thereasonableness of selecting workers for dismissal if the employer did not provide the workers
with economic benefits for the cost of early retirement and support for re-employment.431

3.3.3. Types of employment relation
In consideration of the form or type of employment, the employer will dismiss irregular
workers before selecting regular one for redundancy because the relationship between thecompany and irregular workers is weaker and the shock to the livelihood due to dismissal isvery small. 432 However, recently there has emerged quasi part-time workers who are nodifferent to regular ones in terms of working hours and content of duty, but the wage is lower
than that of regular workers. Moreover, there is also a focus on the household economy ofthese workers.433 There is a debate as to whether or not these workers should be selected
before regular ones on the grounds that they are part-time employees.
According to case law, the difference between a regular and irregular worker is thelevel of attachment to the company. 434 The Supreme Court accepted the validity ofadjustment dismissals when there was a need for personnel reduction, and the employer did
not offer voluntary retirement for the regular workers, instead firing short-term workers.435
When there was a need for personnel reduction, the first workers to be dismissed were those
who were not regular workers. According to the Takamatsu District Court in 1998, quasiregular workers were employed temporarily according to the amount of the work in thecompany without any guarantee of lifetime employment like regular workers.436 There wasa complete difference in the level of attachment of quasi-regular workers to the company
when compared with the regular workers who were employed under the expectation of
lifetime employment.437 In the case of adjustment dismissal, as long as there was no special
circumstance, the court interpreted that the plan for personnel reduction of quasi-regular
workers before dismissal of regular workers was reasonable.438 In this case, the court rejected
the reasonableness of an adjustment standard that was established based on poor attendance
without distinguishing the status of workers; that is, whether the workers in question werequasi-regular or regular. The adjustment dismissal in this case was invalid.

3.4. Appropriateness of procedure or duty of explanation and consultation

430

Tokyo District Court, December 19, 2001, Rouhan, 817, p. 5.
Ibid.
432
君和田, 問題解決 労働法〈5〉解雇・退職, 65.
433
Ibid.
434
Supreme Court, December 04, 1986, Rouhan, 486, p. 6.
435
Ibid.
436
Takamatsu District Court, June 02, 1998, Rouhan, 751, p. 63.
437
Ibid.
438
Ibid.
431

115

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Before dismissal, the employer must provide adequate explanation and engage in
consultation with the labor union and workers regarding the details and necessity ofadjustment dismissal (time, scale, and method) and the standard of personnel selection. An
adjustment dismissal that does not pass or go through enough consultation is invalid since it
violates the clauses of the collective agreement.439 In fact, even in the case where there is nosuch clause in the collective agreement, a dismissal that takes place without explanation or
consultation is invalid.
In addition, when the employer explains the business situation, using general
expressions to say that the dismissal is inevitable due to economic difficulties, this does notmean that the employer has fulfilled their duty of explanation. For example, Morioka District
Court ruled in 1979 that because the dismissal of all workers according to the closure ofHanamaki factory was not a simple case, the company should have added enough explanation
about reasons for the closure of the factory, the necessity of dismissal, the reasons thatworkers in other factories did not become the target of dismissal, financial statements, andaccounting statements.440 However, the company from the beginning until the end of theprocedure of dismissal provided abstract explanations saying that the closure of the factoryand dismissal was an unavoidable measure in order to overcome a slump. There was noevidence that the employer provided an explanation understandable to the dismissed workers
and the union.441 The court invalidated the adjustment dismissal regarding the closure of thefactory in this case because the employer violated the principle of good faith.
In cases where the labor union requests information on the company’s financial
situation, the company must present and explain with particular concrete documents ormaterials. For example, the Kyoto District Court in 1996 found that the employer did nothonestly carry out an explanation or consultation in a case where the company only referredto the documents of debt and credit but did not allow workers to copy these documents.442
Also such an explanation or consultation is taken with the labor union under theunderstanding that the workers belong to that organization. However, where the workers do
not belong to the labor union (in the case where there is no labor union this applies to all theworkers), it is necessary to offer explanations or consultation with individual workers. Such
explanations or consultations also have to go through the form of collective meetings.
However, the employer has to guarantee an opportunity for adequate explanation or
consultation with the workers subjected to the dismissal. Because there was no opportunity
for direct consultation with the workers in non-managerial posts who had high a possibilityof being dismissed or their representatives, the Fukuoka District Court in 1998 took the viewthat employer did not fulfill the duty of explanation and consultation.443

3.5. Adjustment dismissals in the case of closure of a factory, branch, or section

439

君和田, 問題解決 労働法〈5〉解雇・退職, 66.
Morioka District Court, October 25, 1979, Rouhan, 333, p. 55.
441
Ibid.
442
Kyoto District Court, February 02, 1996, Rouhan, 713.
443
Fukuoka District Court, December 24, 1998, Rouhan, 758, p. 11.
440

116

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

In the life of a company, the employer might close or abolish a factory, branch, or
special sections, which lead to the dismissal of workers who are engaged in those workplaces.
In this case, the validity of dismissal is also decided according to the rule governing
adjustment dismissal, the rule of four requirements. There are many conflicts over the efforts
for dismissal avoidance and the requirement of adequate explanation or consultation.444
The Tokyo High Court in 1979 validated the adjustment dismissal when a company
closed their acetylene section. This was because there was a surplus of people in othersections, and the employer feared that the acceptance of voluntary retirement in thosesections would cause damage to the company.445 As a result, adjustment through dismissal
in the acetylene section was inevitable. In another case, the Sendai District Court in 2002
invalidated a dismissal when the employer did not engage in sufficient efforts at dismissal
avoidance. Due to the fact that the adjustment dismissal was a result of the closure of theoffice, the employer sufficiently fulfilled three requirements, namely necessity for personnel
reduction, reasonable selection of workers, and the appropriateness of the dismissal
procedure. However, regarding the effort of dismissal avoidance, the employer seemed tohave made no serious or earnest efforts in providing temporary or permanent transfers.446
There have also been cases where the courts invalidated a dismissal when the employer
did not fulfill the requirement for adequate explanation or consultation with the workers. The
Kyoto District Court in 2003 invalidated a dismissal when there was a lack of reasonable
procedure for the dismissal. With the closure of a machinery section, the employer did notcarry out enough of an examination into their newly built company regarding changes inbusiness to avoid having to engage in dismissals. In addition, the employer failed to conduct
proper dismissal procedures such as providing explanations or consultation.447 The Fukuoka
District Court in 2007 invalidated the dismissal.448 In a dismissal due to the abolition of a
cooking section at a special home for nursing old aged people, there was no examination ofother possibilities and not enough explanation or consultation with workers was provided.
The dismissal of all the workers of the spinning section was due to the closure of that
section after the decision of the management. The court invalidated the dismissal because theemployer could not prove that it was necessary for company to dismissal all the workers who
were in the spinning section.449 The reasonableness of personnel selection is accepted bycourts mostly in case of the dismissal of all workers who are engaged in specified duties in aparticular section.450 However, in cases where the workers are employed without restrictionof place and type of duty, or where they are engaged in a particular post and subjected todismissal, the employer has to fulfill the requirement of reasonableness of personnel
selection.451 For example, an employer did not establish the standard of selection for workers
for dismissal. Subsequently the employer fired three workers who were engaged in thesection that was closed.452 The Tokyo District Court in 1998 ruled that the employer probably
444

君和田, 問題解決 労働法〈5〉解雇・退職, 67.
Tokyo High Court, October 29, 1979, Rouhan, 330, p. 71.
446
Sendai District Court, August 26, 2002, Rouhan, 837, p. 51.
447
Kyoto District Court, June 30, 2003, Rouhan, 857, p. 26.
448
Fukuoka District Court, February 28, 2007, Rouhan, 938, p. 27.
449
Nagoya High Court, January 17, 2006, Rouhan, 909, p. 5.
450
君和田, 問題解決 労働法〈5〉解雇・退職, 68.
451
Ibid.
452
Tokyo District Court, January 07, 1998, Rouhan, 736, p. 78.
445

117

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

made the selection of workers by chance. Consequently, the method for selecting thedismissed workers was not appropriate because this standard lacked fairness.

Section 4: Remedies for unjustified dismissal
1. Definition of invalid dismissal
The Labor Contract Act (Article 16) stipulates that a dismissal that lacks objectively
reasonable grounds and is not considered to be appropriate in general societal terms is an
abuse of rights and invalid. In theory, according to the effect of the abuse of rights, eventhough an employer has an obligation for compensation for damages, there may beconsideration that the dismissal is valid. However, judge-made laws have long invalidated
dismissals and the effects of an abuse of right to dismissal are incorporated into Labor
Contract Act.453 In Japan, the effect of an invalid dismissal is not limited to the case of an
abuse of right to dismissal. A dismissal that violates the restricted grounds in law, internal
work rules, or collective agreements is also an invalid one. When a dismissal is invalid, theemployment relations continue to exist as if there was no dismissal. Consequently, an
employer has to reinstate the worker to the same position with the same treatment.

2. Wages during dismissal
When the court invalidates a dismissal, there is a legal problem concerning wages
during the period of dismissal from the day of discharge until the day of the issuance of thejudgment. The effect of invalid dismissal implies the continuity of the employment contract,
but it is very common that the fired worker does not supply labor or services from the day heor she has received notice of discharge from the employer. The court applies Article 536 (2)of the Civil Code regarding the assumption of risk to provide the dismissed workers with theright to wage during the dismissal.
Article 536 (2) reads, “If the performance of any obligation has become impossible due
to reasons attributable to the obligee, the obligor shall not lose his/her right to receive
performance in return. In such cases, if the obligor gains any benefit as a result of being
released from his/her own obligation, the obligor must reimburse the obligee for the
benefit.”454 The dismissed worker as an obligor cannot perform his or her duty because of
the invalid dismissal taken by the employer who is the obligee. The dismissed worker does
not lose his or her right to wages.
The discussion does not stop at the point where there is recognition of the worker’s
right to wages, but goes further to the issue that an employee earns income during the period
of invalid dismissal. According to the second sentence of Article 536 (2), even though the453454

中窪, 野田, 和田, 労働法の世界, 326.
The Civil Code of Japan of 1898, art. 536 (2) (1898).

118

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

worker has the right to wages during the period of invalid dismissal, he or she has an
obligation to return benefits or money earned as a result of being released from his or her
duties to the employer. As the litigation takes a long time, the worker during the dismissal
period may work in other job to earn an income. In such a case, the worker has to return thisamount of money to the employer. Then, there is the question of the amount of wages theworker would have received during the period of dismissal and the amount of money he or
she has to return to the employer when the concerned worker earns the income during thisperiod.
The Labor Standard Act (Article 26) provides that “In the event of an absence fromwork for reasons attributable to employer, the employer shall pay an allowance equal to atleast 60 percent of worker’s average wage to each worker concerned during the period ofabsence from work.” 455 The Supreme Court ruled in 1962 that Article 26 of the Labor
Standard Act was a special rule of Article 536 (2) of the Civil Code, and it required theemployer to pay wages though the worker did not work. 456 Because work suspension(absence from work) and dismissal were only different in terms of the worker’s freedom ingetting another job during these periods, Article 26 of the Labor Standard Act also applied in
the case of dismissal.457 According to this interpretation, the employer has to pay a worker at
least 60 percent of the average wage during the period of invalid dismissal. This allowance
is a guarantee of the minimum livelihood of workers during the period of work suspension
or dismissal.458
For the amount of wage the worker earned during the period of dismissal, the sum of
up to 60 percent of the average wage, regardless of the worker’s income during the dismissal,
is the amount the employer has to pay as per Article 26 of Labor Standard Act.459 On theother hand, the sum exceeding 60 percent of the average wage becomes the object ofadjustment with the duty of redemption of the income earned during the dismissal, and theemployer in this case can pay the worker by deducting this part of the income from theamount of wage concerned.460
The period that becomes the standard for calculation of these wages must correspondproperly with the period that becomes the standard for calculation of the income earned
during dismissal. For example, the Supreme Court in 1987 ruled that in the obligation to pay
wages during the dismissal, the employer could deduct the amount of income earned in the
period that properly corresponded with the period that was the object of a particular paymentof wage from the part of the income that was more than 60 percent of the average wage.461

455

Labor Standard Act of Japan, art. 26 (1947).
Supreme Court, July 20, 1962, Minshu, 16–18, p. 1656.
457
Ibid.
458
土田 et al., 条文から学ぶ労働法, 39.
459
中窪, 野田, 和田, 労働法の世界, 327.
460
Ibid.
461
Supreme Court, April 02, 1987, Rouhan, 506, p. 20.
456

119

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

3. Provisional disposition
In the process of disputes over invalid dismissal, there is the usage of provisional
disposition by the worker during the procedure of the litigation where worker requests fromthe court an order to protect his or her status and to demand the payment of wages from
employer. According to the Civil Provisional Remedies Act of 1989, a court’s order ofprovisional disposition is necessary because it keeps the status of worker in the company andprotects the worker’s livelihood against difficulty, which is a consequent of the invalid
dismissal.462
Workers started to apply for provisional disposition against the illegal action of
employers, such as dismissal, after employers asked courts for orders of provisional
disposition to impede the actions of workers, such as sit-down strikes, plant seizures, andunion seizure of factory operations.463 If there is a claim of invalid dismissal, the court usuallyorders the employer to provisionally keep the status that exists and the rights in theemployment contract of the worker (provisional disposition of protection of status), and to
pay the appropriate amount of wages until the day of the issuance of the decision (provisional
disposition of payment of wages).464 However, recently, when it is not necessary to protect
the status of the worker, the court orders only the provisional payment of wages and evenrejects the necessity of provisional payment of wages if the worker has enough assets orincome.465
The provisional disposition of payment of wage provides discharged worker with anamount of money equal to all or part of their wage in order to avoid a poor livelihood during
the litigation. It does not relate to the condition of whether or not the worker has to work.
However, the court orders the worker to return the money paid by the employer whencanceling the provisional disposition.466 If the worker has received this payment, and thecourt cancels the particular provisional disposition of payment, the worker has an obligation
to return the money.467 Even though the provisional disposition is not cancelled, when theworker loses the litigation and the dismissal is valid, the employee has to return the received
wage to the employer.

462

Article 23 (1): An order of provisional disposition relating to the subject matter in dispute may be issued
when there is a likelihood that it will be impossible or extremely difficult for the obligee to exercise his/herright due to any changes to the existing state of the subject matter. (2) An order of provisional disposition todetermine a provisional status may be issued when such status is necessary in order to avoid any substantial
detriment or imminent danger that would occur to the obligee with regard to the relationship of rights in dispute.
Civil Provisional Remedies Act of Japan, art. 23 (1) & (2) (1989).
463
Matsuda, “Dismissal of Workers Under Japanese Law,” 466.
464
中窪, 野田, 和田, 労働法の世界, 328.
465
Ibid.
466
Civil Provisional Remedies Act of Japan, Article 33 reads “Article 33 Where an obligee has, based on anorder of provisional disposition, received the delivery or surrender of an object or received payment of money,or used or retained an object, a court may, upon the petition of the obligor, order the obligee to return the object
delivered or surrendered by the obligor, return the money paid by the obligor or return the object used or retainedby the obligee, in an order to revoke the order of provisional disposition under the provision of paragraph (1)of the preceding Article.”
467
Supreme Court, March 15, 1988, Minshu, 42–43, p. 170.

120

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

4. Dismissal and compensation for damage
In addition, if the worker requests confirmation of status and provisional payment
because of invalid dismissal, he or she can also demand for compensation for damages suchas consolation money according to the illegal conduct of the employer. According to the Civil
Code of Japan, Article 709, “A person who has intentionally or negligently infringed any
right of others, or legally protected interest of others, shall be liable to compensate any
damages resulting in consequence.” 468 Moreover, Article 710 reads “Persons liable fordamages under the provisions of the preceding Article must also compensate for damages
other than those to property, regardless of whether the body, liberty or reputation of others
have been infringed, or property rights of others have been infringed.” 469
In the case of invalid dismissal, the employer does not always have to pay
compensation for damages. According to the Tokyo District Court in 1996, there must be an
examination of the conditions for creation of the illegal conduct, such as the intention
involved or mistakes occurring based on the relationship of individual case, the violation ofrights, the occurrence of damage, and the cause and results.470 This implies that just because
the dismissal is valid, it does not constitute an illegal conduct or tort liability. However,during the process of dismissal, if there is direct malice, explicitly inappropriate treatment,
discrimination, damage of reputation, unfair labor practice, or an adverse situation, the court
in practice accepts compensation for damages.471
For example, according to the Fukuoka High Court in 1980, if discharge due to a union
shop agreement was invalid and the expulsion of the worker invalid, the dismissal could not
immediately constitute illegal conduct. However, when the company has already known
about this invalid expulsion and has fired the worker by ignoring this, the dismissal
constitutes illegal conduct against the worker.472 In this case, the company could not escapefrom their responsibility for illegal conduct in dismissing the workers. The court decided thecompensation on the basis of the illegal conduct and provided the workers with consolation
money because the employer discharged them from the workplace by taking inappropriate
dismissal measures. The consolation money to each worker was appropriate to 500,000 Yen.
In another case presented to the Chiba District Court in 1993, the employer encouraged
the voluntary resignation of workers when the investigation of the facts had not yet
finished.473 According to all the evidence in this case, even though there was no proof thatthe company recognized the absence of grounds for dismissal, there was evidence that there
was no investigation into grounds for selection-decision being connected to disciplinary
measures. In addition, the employer without conducting an investigation of necessary facts
continued ordering workers to standby at home. The order was already evaluated as illegal,
and the dismissal in this case took place due to the workers’ disobedience of this order. The
468

The Civil Code of Japan of 1898, art. 709 (1898).
Ibid., art. 710.
470
Tokyo District Court, May 27, 1996, Roukeisoku, 1614, p. 9.
471
Fukuoka High Court, December 16, 1980, Rouminshu, 31–36, p. 1265; Chiba District Court, September 24,
1993, Rouhan, 638, p. 32; Rouhan, 935, p. 35.
472
Ibid.
473
31–36 Rouminshu 1265.
469

121

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

workers faced a dilemma through the employer’s recommendation to resign or get dismissed.
Due to the effects of the dismissal, the workers suffered mental pain in that they were forced
to degrade their working ability in specific skills as airplane mechanics. The consolation
money for each worker was 1,000,000 Yen.
In the decision of Tokyo District Court in 2006, the adjustment dismissal took place
without fulfilling the requirements for dismissal and was an abuse of the right to dismiss andwas illegal.474 When examining the process of adjustment dismissal in this case, there werefour major facts. One, when the employer attempted to amend the rule for retirement wages
by reducing the amount of money, the dismissed workers resisted these actions and consulted
with the labor inspector and with the Tokyo Labor Bureau. Two, the company resented theconsultation activities of the workers with outside organizations. Three, the workers
consulted with the Tokyo executive office of social security about the cancellation of a roomfor health consultation at the company. Four, the employer warned the workers about
consulting with organizations outside the company.
According to these facts, the employer was unhappy with the workers who resisted his
activities. In view of the absence any requirement for adjustment dismissal, the court foundthat it was appropriate to accept that the resentment the company had towards the resistanceof the workers led to the dismissal. Therefore, the economic dismissal in this case constituted
an illegal conduct.
On the other hand, the Supreme Court in 2010 decided that dismissal of a management
worker whose attitude was affected by alcohol was an unavoidable disciplinary measure, andthat this discharge did not constitute illegal conduct. 475 In this case, the worker was acompany director who held two posts concurrently. The company received complaints fromother workers and customers about the attitude of the discharged worker. The worker was
addicted to alcohol. Even though there was a warning from the representative company
director, the worker did not restrain from drinking alcohol.
The worker was absent on the day of an appointment with a person who was in chargeof a customer. On the day the chief of the company talked on phone with the worker. The
worker under the influence of alcohol stated that it was as though he had resigned. In viewof these facts, the ordinary dismissal did not constitute illegal conduct against the worker
even though the employer did not take other methods other than dismissal as a disciplinary
measure.
Because normally the wage is returned with an invalid dismissal, in practice,compensation for damages is limited to consolation money against mental damage. However,
the worker in exchange for a request for confirmation of status and wages related to an invalid
dismissal requested compensation for damage that includes lost wages.476 In a case decided
by the Nagoya High Court in 2005, the employer dismissed the worker on the grounds that
she was married to a lawyer in another law office and feared that secret information from theoffice might be leaked to the other competitor law firm.477 The Nagoya High Court ruled that474

935 Rouhan 35.
Supreme Court, May 25, 2010, Hanji, 2085, p. 160.
476
Nagoya High Court, February 23, 2005, Rouhan, 909, p. 67; 2085 Hanji 160.
477
909 Rouhan 67.
475

122

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

it was very common present society for both husband and wife to be working, and thedismissal based on an abstract fear lacked reasonable grounds and social appropriateness. In
addition, the dismissal was a violation of the law that provided both men and women withequal opportunity to employment. Hence, such conduct constituted illegal conduct andcorresponded to lost wages for three months equal to 1,040,000 Yen, and 300,000 Yen as
consolation money.

5. Severance pay
The rules of employment in many companies dictate a rule that employers do notprovide all or even a part of the retirement allowance for workers who are dismissed
according to disciplinary measure. In principle, the reduction or cancellation of thisallowance can only take place if any clause in the internal work rules states clearly that there
will be non-payment or reduction of retirement money.478 This clause regarding the reduction
or cancellation of retirement money must be concluded before the day of the disciplinary
dismissal. This is based on the principle that there can be a reduction or cancellation ofretirement money in the case of disciplinary dismissal. If the worker voluntarily terminates
their employment contract, the employer cannot cancel or reduce the amount of theretirement allowance.
If the worker resigns before the employer carries out a disciplinary dismissal, theworker cannot get retirement wages if he or she has engaged in misconduct that falls under
the grounds for disciplinary discharge in the rules of employment. For example, the company
creates a rule that no retirement money is provided to the worker in the case of dismissal du
to violation of internal work rules such as engaging in disloyal conduct.479 In one case, theworker was responsible for the evaluation of products bought by the company. The workerbought the products at a price 10 percent higher. This caused great damage to the company.
Although the worker notified the employer about his resignation before the disciplinary
dismissal, he could not receive retirement money because there were grounds for disciplinarydischarge which would incur non-payment of retirement allowances.480
In addition, after retirement if there is an evidence of grounds for disciplinary dismissal,
478

君和田, 問題解決 労働法〈5〉解雇・退職, 36.
Osaka District Court, January 29, 1999, Rouhan, 760, p. 61.
480
The court ruled that disciplinary dismissal was a ground for termination of the employment relationaccording to the execution of the right to discipline the worker. Just before the employer took disciplinary
dismissal, the worker expressed an intention of retirement or resignation. The Employer also expressed his
intention to terminate the contract on the same day. Therefore, the employment relation between employer
and worker was terminated on the same day and it was impossible to use the right to discipline after this day.
However, originally, the ground for disciplinary dismissal and ground for non-allowance of retirement wage
were two different things. The rule of the company on the retirement money connects grounds for nonallowance of retirement money to disciplinary dismissal. The implication of this rule was even though it was
the case that the employer took disciplinary dismissal, there was a notification of resignation from the worker
that terminated the employment relation before the employer carried out the disciplinary dismissal. However,in this case where there was ground for disciplinary dismissal that was commensurate to the non-payment of
retirement money, it was possible to interpret the rule thus, and hence there was no retirement money
provided. Ibid.
479

123

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

as in explicit disloyal conduct by the worker, the right to claim retirement money is cancelled
as an abuse of rights.481 One year before resignation, a worker transferred information about
customers from the current company the worker was working in to another competitor
company whose business was a travel company. Just before the day of resignation, the worker
deleted the data of 1,066 customers of the company. With the data for 809 customers left over,
the worker deleted the history of travel and added a remark column. The method of businessin the company was to gather clients for tours by using the data of customers in the computers.
Through an investigation of the history of travel of the customers, the employer could use a
program to send direct mail to the customers. When the worker deleted the data of thecustomers, the company could not restore operations and this caused inefficiency in thebusiness activities. If the employer had known about these actions before resignation, theemployer would have taken disciplinary dismissal because this was a situation that fell into
disciplinary dismissal grounds under Article 40, Number 2 (4) for criminal acts such as
stealing, embezzlement, and causing injury to the company.

Conclusion
The rule regarding abuse of right to dismissal in Japan is an abstract legislative rulein the Labor Contract Act. However, the courts developed comprehensively the content ofrules before the incorporation of this judicial rule into legislative texts. Relying only on thelegislative texts, parties in the conflict cannot understand the whole framework of the law
governing dismissal in Japan. They have to refer to judicial rules. Even though there is noformal existence of the principle of stare decisis in Japan, there is a tendency that the courts
in many cases refer to the previous decisions, particularly the decision of the Supreme Court.
The courts normally refer to precedent to save labor and time, and to guarantee fairness andstability. Moreover, the lower courts do not wish the Supreme Court to cancel their decisions.
This leads to consistency in the dismissal rules in Japan. The consistency of rules leads to thecertainty and stability of law and finally the stability in the employment relationship.
The rule of the abuse of right to dismissal in Japan consists of two main requirements.
The first requirement is the existence of a valid reason for the dismissal. In most cases, thecourt accepts the existence of valid reason through the employer’s proof that the dismissal isbased on grounds in the rules of employment. The second rule is the requirement thatdismissal is an appropriate measure to end the employment relations. Whether or not adismissal is appropriate depends on the courts’ evaluation of each case according to societal
common sense. The judge has discretion in evaluating this appropriateness. Consequently
employers cannot always dismiss workers just by making detailed rules in their rules of
employment. The courts checks the appropriateness of dismissal based on the generalprinciples of laws, labor laws, employment practices, and the real facts of individual cases.
The remedy for a worker who is a victim of an employer’s abuse of the right todismissal in Japan is reinstatement with the right to the lost wages during the period of theinvalid dismissal. The courts have long invalidated dismissals that fall under the abuse of
481

Tokyo District Court, December 18, 2000, Rouhan, 803, p. 74.

124

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

rights. Invalid dismissal means that the employment relationship continues as if there was no
dismissal. Although the worker does not provide labor for the employer during the period of
dismissal, he or she still has a right to claim for wages because the discharge is due to theemployer’s abuse of right. Hence, the worker can return to their old position with the amountof wages lost during the dismissal being provided to them. Moreover, the worker even canclaim for damage in addition to the lost wages during the dismissal if there was bad intention
on the part of the employer in carrying out the discharge or if the dismissal caused damage
to the worker’s social relationship.

125

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Chapter 3: Comparison of the rules on justified dismissal
This chapter aims at placing the rule of valid reason in Cambodia and the rule of abuseof the right to dismissal in Japan together not only for the sake of comparison but also for ananalysis of the strong and weak points of each system. In addition, the two rules are comparedin order to make the rules more understandable. Even though the two rules are different inmany aspects, such as their nature or characteristics, the level of protection and effects, theyboth have the same purpose which is to protect workers against arbitrary dismissal. The
comparison with Japan is of great importance for the development of rules for justified
dismissal in Cambodia because Japan has a long experience with the application of justified
dismissal rules, which restrict an employer from unjust unilateral termination of an
employment contract.

Section 1. Characteristics
1. Existence or non-existence of right to dismissal
The rule of valid reason and the rule of abuse of right to dismissal have the same
purpose in protecting workers against arbitrary discharge. However, when examinedconcretely, the two rules are different in substantive matters. The noticeable difference
between the two rules is the existence or absence of the employer’s right to dismissal whichis the ideology behind as well as the basis for the establishment of the two. The rule of valid
reason is founded on the idea of protecting the employee in the realization of the right to life;
therefore, the employer originally does not have the right to dismissal.482 The employer’s
right to dismissal exists only when there is the existence of a valid reason. On the other hand,
the rule of abuse of rights is founded on the idea that the employer has the freedom to dismiss
an employee.483 The right of dismissal originally belongs to the employer who has the rightto direct and control the business. The right of dismissal or freedom to terminate a contract
is only restricted when it is used beyond the scope of protection granted by law or when it is
not appropriate according to social common sense.
2. Abstract rules
The common feature of the rule of abuse of right in Japan and that of valid reason in
Cambodia is that the legislative rules governing the two are general and abstract ones. For
example, the Labor Contract Act (Article 16) reads, “A dismissal shall, if it lacks objectively
reasonable grounds and is not considered to be appropriate in general societal terms, be

482
483

池田, 解雇の法的問題, 56.
Ibid., 52.

126

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

treated as an abuse of right and be invalid.”484 Though the Labor Contract Act has defined
the abuse of right by providing two requirements, such as the existence of objectively
reasonable grounds and the appropriateness of dismissal, there are cases where the workers
and employers still fight over whether or not a discharge constitutes the abuse of right.
In response to the abstract legislative texts, judicial or judge-made rules have beendeveloped to fill in the loophole of the law and give answers regarding the validity of
dismissal or dismissal with valid reason by providing concrete content. According to the
judicial rules in Japan, the reasonable grounds for dismissal are those written in the rules of
employment in the company. These grounds are a worker’s long-term sickness when it
exceeds the period of work suspension, explicitly poor working ability or results, a worker’s
serious violation of the company’s instructions or rules of employment, or necessity forbusiness operations in the form of economic or adjustment dismissal. In case of adjustment
dismissal, the courts accept the validity of dismissal only if the discharge meets four
requirements, such as a necessity for personnel reduction, execution of dismissal avoidance
measures, the reasonableness of the personnel reduction, and the execution of appropriate
procedures. In addition, according to the Labor Contract Act, a dismissal that takes place
without reasonable grounds and is not appropriate from the point of view of social
consciousness is invalid. The judicial rules have long provided a dismissed worker with job
protection with an order of reinstatement.
Whereas judicial or judge-made rules play an important role in governing the issues of
dismissals in Japan, the arbitrator-made rules have much influence on the dismissal rules in
Cambodia. The Labor Law (Article 74, Second Paragraph) reads “However, no layoff can betaken without a valid reason relating to the worker’s aptitude or behavior, based on therequirements of the operation of the enterprise, establishment or group.”485 Similar with thelegislative rule on the abuse of rights to dismissal in Japan which fails to mention what
constitutes reasonable grounds, the Cambodia’s legislative rule does not define valid reasons.
However, the Labor Law of Cambodia categorizes the types of valid reasons for dismissal.
These grounds relate to the worker’s capacity or misconduct, and the necessity of theoperational requirements of the enterprise. However, the rule of valid reason is still a broad
principle through which parties in the conflict find it hard to say whether or not a dismissal
takes place with a valid reason.
A review of the judicial rules likewise demonstrates the practice in Japan where courts
play a major role in creating and developing rules to deal with conflicts of dismissal can help
to resolve this matter. As already discussed in Chapter 1, most of the judges in Cambodia are
passive in the creation of case-law while the arbitrators who only have jurisdiction overcollective labor disputes are very active in establishing and refining the rules through theircomprehensively rational interpretation of articles in the Labor Law or clauses in theministerial orders. The decisions of previous panels have been used as reference or precedentby the next panel when dealing with similar cases. Another remarkable aspect of the
Arbitration Council is that its decisions are publicized through its website.486 These abovementioned facts stress the important role of the Arbitration Council in shaping theemployment practice in Cambodia through its rules that close the loopholes as well as the484

Labor Contract Act of Japan, art. 16 (2007).
The Labor Law of Cambodia of 1997, art. 74, ¶ 2 (1997).
486
The Arbitration Council, January 20, 2012, http://www.arbitrationcouncil.org/.
485

127

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

abstractness of the Labor Law. Accordingly, the analysis provided here on the rule of valid
reason in Cambodia relies on these arbitrator-made rules due to the scarcity of court-maderules.
In line with the arbitrator-made rules, the rule of valid reason in Cambodia mainly
focuses on the requirement for the existence of a valid reason. As long as the employer has
reasonable grounds, the employer can dismiss the concerned worker. The Arbitration Council
has a tendency to accept the existence of valid reason when an employer can prove that adismissal took place based on grounds written in the Labor Law, ministerial orders, andinternal work rules of the company. Regarding dismissal on grounds relating to worker’s
capacity, the dismissal can take place when an employee cannot perform their duties due totheir sickness or due to their poor abilities. Most cases involving collective labor disputes
brought to the Arbitration Council concern the dismissal of workers who cannot return totheir work after the elapse of a period of work suspension for six months. In the case of
dismissal due to misconduct, the arbitrator-made rule does not accept the reasonableness of
dismissal ground unless the worker has engaged in serious misconduct which is written in
the Labor Law and the internal work rules of the company. In contrast to Japan where courts
adopted the four requirements as criteria for valid adjustment dismissal, in Cambodia, thelegislative rule requires employers to follow certain procedures. For example, the Labor Law(Article 95) demands that employers who wish to reduce their workers do so by satisfying
the requirements of reasonableness of personnel selection, to inform and consult with worker’s representatives, to inform the labor inspector, to participate in the meetings chaired by thelabor inspector, and to delay dismissal in exceptional cases.
Regarding the effect of dismissal without valid reason, the Labor Law (Article 91)
entitles the dismissed workers the right to damages; however, there is no provision in the
Labor Law that punishes an employer when they have violated the procedures for adjustment
dismissal in Article 95. Therefore, according to the Labor Law, in the case of adjustment
dismissal, the requirement of valid reason and procedures are not inter-related because they
involve a different system of punishment. In addition, the Labor Law does not precisely
entitle a worker to reinstatement when the dismissal takes place without valid reason. The
arbitrator-made rules have been developed to provide the dismissed workers with remedies
to some extend but are far from the benefits of the Labor Law. There are two options for
remedies in the case of dismissal without valid reason. The two remedies are monetarycompensation for damage and reinstatement. In cases where the employment relationship has
been destroyed beyond reparation, the Arbitration Council has the power to select a monetarycompensation for damages as the appropriate remedy for the workers. In contrast, if theemployment relationship has not yet been broken, the Arbitration Council will orderreinstatement with back pay to the dismissed workers. Regarding the effect of adjustment
dismissal that takes place without following the procedures in Article 95, the Arbitration
Council requires the employer to pay the worker the amount of wages and all kinds of benefits
amounting to two months.
A summary of the rule of abuse of right in Japan and the rule of valid reason in
Cambodia brings one to the conclusion that the court-made rules and arbitrator-made rules
play an important role in providing a concrete vision of the dismissal rules. Parties in theconflict might question about the effects of judicial rule by arguing that they are notlegislative rules but are just rules that the courts or arbitrators often use when resolving

128

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

conflicts over dismissal with similar facts. In addition, the general public cannot access andunderstand these judicial rules. A possible reply to this question is to suggest that thelegislative rules in Cambodia and Japan are general and abstract because it is difficult tomake detailed laws since grounds for dismissal will vary in nature and substance. The
solution is to provide a judge or arbitrator with discretion in defining the reasonableness ofgrounds for dismissal and the reasonableness of each dismissal. Furthermore, though
Cambodia and Japan are not common law countries where the principle of stare decisis
formally exists, there are cases where judges or arbitrators use precedent or previous
decisions as reference when dealing with similar cases. This is because reference to previous
decisions guarantees fairness, equality, and the stability of the law and is convenient forjudges or arbitrators time and labor.487

Section 2. Merit and demerit (strength and weakness)
1. The rule of valid reason: from legislation to practice
A review of the history of the labor law in Cambodia shows that the rule of valid reason
goes from legislative rule to practice. The application of the rule of valid reason has a shorthistory and needs to be refined. Cambodia adopted the rule of valid reason to restrict the
freedom of employers in dismissal according to the enactment of the first Labor Code in 1972.
Before the enactment of the Labor Code, there was an attempt to introduce restrictions on theemployer’s freedom of unilateral termination of contract according to the principle of abuseof rights in 1960s. For instance, Macel Clairon, a French attorney and professor at the Facultyof Law and Economic in Phnom Penh introduced the concept that led to restricting theemployer’s right to dismissal in his book Droit Khmer: Droit Du Travail in 1962. 488
According to Clairon, since unilateral termination would lead to an abuse of right and cause
damage to the other party, there has to be an examination of the grounds for the terminationof an employment contract.489 The ideas of Clairon came from the practices of French judges
who actively adopted the doctrine of abuse of rights to limit an individual’s private autonomy,rights and freedom in consideration to the social norms.490
Along with the idea of restriction through the concept of abuse of rights, the ILO
Employment Termination Recommendation adopted in 1963 introduced restrictions for
dismissals through the requirement of valid reason. In 1971, Cambodia became a member of
the International Labor Organization, and in 1972 Cambodia adopted its first Labor Codewhich included the rule of valid reason. Although there was no explanation as to why
Cambodia did not employ the principle of abuse of rights to restrict the employer’s freedom
to dismissal, it may be the case that the rule of valid reason in the Labor Code was clearly
influenced by the rule of valid reason in the ILO recommendation. In addition, the Civil Code487

山田 et al., 民法 (1) 総則 第 3 版補訂, 13–14.
Clairon, Droit Khmer: Droit Du Travail.
489
Ibid., 56–63.
490
Vera Bolgar, “Abuse of Rights in France, Germany, and Switzerland: A Survey of a Recent Chapter in Legal
Doctrine,” Louisiana Law Review 35 (1975 1974): 1015–23.
488

129

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

of Cambodia adopted in 1920 did not have any regulation mentioning the principle of theabuse of rights.
According to the Labor Code in 1972, Article 70 stipulated that an employment
contract of unspecified duration was terminated at will by either party with prior notice;
however, no dismissal was to be taken without a valid reason relating to the worker’s aptitude
or behavior or to the necessity of the enterprise. Hence, the employer could dismiss theworker only when there was a valid reason of any kind specified in Article 70. Consequently,
the employer’s right to dismissal did not exist unless he or she had a valid reason. The
restriction on the right to terminate the contract based on the requirement of valid reason
applied only to the employer while the worker still enjoyed the freedom of termination of
employment contract.
Though the rule of valid reason is stipulated in the Labor Code in 1972, it was never
put into practice due to the subsequent civil wars until the adoption of the present Labor Codeor Labor Law in 1997. The Labor Law categorizes the types of valid reason for dismissal,
but it is still an abstract rule where the judge’s interpretation is necessary in order tocomprehend the rule of valid reason. After subsequent civil wars, the judges in Cambodia did
not have experience in applying this rule in labor conflicts. As a result, in relying on judgemade laws, parties in a conflict cannot understand the whole legal framework behind thedismissal rule.
The establishment of the Arbitration Council in 2003 witnessed the application of therule of valid reason in labor disputes. As discussed in Chapter 1, the arbitrator-made rules
play a major role in stabilizing the rules for employment practices in Cambodia; however,
the rules remain in the development process. The Arbitration Council may need years tomature in terms of the creation of rules that govern employment relations.

2. The rule of abuse of right to dismissal: from practice to legislation
In contrast to Cambodia where legislative rules that requires dismissal with a valid
reason existed before practice, the dismissal rules in Japan were developed from the practiceof judges before becoming legislative rules. The Civil Code of Japan which is the traditional
rule dealing with employment relations also allows an employer to terminate the employment
contract at will without worrying about valid reasons.491 After the end of World War II,
Japanese workers faced difficulties such as low employment opportunities and poor working
conditions. The workers required more protection in these economic conditions in addition
to the rules in the Civil Code. Thus, the government enacted the Labor Standard Act in 1947
and the Labor Union Act in 1949. However, there was no provision in the legislative lawsthat required a dismissal to take place with valid reason.
Since the 1960s, the local courts have restricted the employer’s freedom of dismissal
by applying the rule of valid reason and the rule of abuse of rights to dismissals.492 In later
491
492

Civil Code of Japan of 1898, art. 627, ¶ 1 (1898).
大内, 山川, 解雇法制を考える, 6.

130A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

years there was a tendency in courts for the judges to prefer apply the rule of abuse of rightto dismissal because the application of the rule of valid reason lacked legal basis. The rule ofabuse of right to dismissal was based on Article 1 (3) of the Civil Code that prohibited theabuse of this right. In addition, according to the rule of valid reason, the employer originally
does not have the right to dismissal unless there is a valid reason. Hence, the rule of valid
reason contradicted previous laws in Japan, namely the Civil Code, the Labor Standard Act,and the Union Act which allowed an employer to dismiss the worker freely. That meant thatthe employers in Japan had the right to dismiss the worker from the outset. In order to reachthe same purpose as the rule of valid reason that protected workers against an employer’s
unfair dismissal, the courts applied the abuse of rights that was a general principle of the
Civil Code.
However, the rule of the abuse of rights did not have concrete content until the Supreme
Court in 1975 stated that even though an employer had the right to dismissal, a discharge thatlacked concretely reasonable grounds and was not accepted as proper from the perspectiveof social common sense was an abuse of rights and invalid.493 The Supreme Court in 1977
confirmed the content of the rule of abuse of right to dismissal that consists of two elements,
namely “the existence of concretely reasonable grounds” and “the appropriateness of
dismissal considered form social common sense.”494 This judge-made rule first became alegislative rule in 2003 when it was incorporated as Article 18-2 in the Labor Standard Act
and finally in Article 16 of the Labor Contract Act in 2007.
The noticeable difference between the rule of justified dismissal in Cambodia and inJapan is the experience of judges or arbitrators. In Japan, though the legislative rule is abstract,
the judges find this convenient, as they have worked on the issue of dismissal for years. Evena junior judge can find previous judgments as a reference in order to save labor and time.
More importantly, after many years of application of the rule of abuse of right to dismissal,
courts in Japan more or less have established a comprehensive and concrete rule to covernearly all aspects of the issues of dismissal.

3. Rules on dismissal due to worker’s aptitude
3.1. Worker’s capacity
The rule of abuse of right to dismissal in Japan consists of two main requirements,
namely the existence of reasonable grounds and the appropriateness of the dismissal. The
employer has to prove that the worker’s poor capacity or sickness falls under the grounds for
dismissal in the rules of employment and the discharge is an appropriate measure consideredfrom the perspective of social common sense. Regarding lack of ability, case law has ruledthat only a remarkably low ability with no expectation of improvement is a reasonable groundfor dismissal. 495 However, according to the requirement of appropriateness, immediate
dismissal is not acceptable. Before discharging the worker, the employer is required to takedismissal avoidance measures, such as providing workers with a chance of searching for the493

Supreme Court, April 25, 1975, Minshu, 29–4, p. 456.
Supreme Court, January 31, 1977, Rouminshu, 268, p. 17.
495Tokyo District Court, October 15, 1999, Rouhan, 770, p. 34.
494

131

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

possibility of education, training, or transfer to other positions that fit with the current
capacity of the concerned worker.496
In the case where a worker who is employed under special treatment for a special
purpose or for a managerial position and who does not achieve the expected results or whatis written in the employment contract, the dismissal is still appropriate even if the employer
does not provide these workers with a chance to receive education, training or a transfer toanother position.497 This exception in the employer’s duty towards dismissal avoidance isbecause these employees are hired halfway (i.e. not from graduation) based on the specificneeds of the company as written in the employment contract. Such a relationship is different
from the ordinary way of employment where new graduates are recruited at the end of theirgraduation. Even where the work results is unsatisfactory to the employer, the dismissal is
not an appropriate measure if the worker is not the only one who responsible.498 Furthermore,a dismissal based on the evaluation of the worker’s capacity in a short period of time after
being placed in position is not also appropriate from the perspective of social common sense.
499
Therefore, as long as the employer makes an effort to keep the worker in the company
and only uses dismissal as the last resort, the court considers such a dismissal to be an
appropriate measure.
On the other hand, the rule of valid reason in Cambodia only requires an employer tohave a reasonable ground for dismissal. According to arbitrator-made rules, reasonablegrounds for dismissal are those specified in the rules of employment. Hence, an employer
has to prove that the poor capacity of the worker is a ground for dismissal in the internal work
rules. However, most of the internal work rules for companies or factories do not mention
about the condition or rule for dismissal in case of poor capacity.500 These internal rules
mainly mention about the types of offences and level of disciplinary measures. In addition,in the practice of the garment sector, employers use the poor capacity of a worker taken as aform of offence to dismiss the worker. 501 Since poor capacity is not a case of serious
misconduct that is a reasonable ground for discharge, the dismissal based on poor capacity is
not accepted. This reflects the rule related to the issue of poor capacity or when the skills ofa worker are obsolete and needs development.

3.2. Sickness or injury
In Japan, courts do not accept an immediate dismissal on the grounds of private
sickness or injury. It is cruel according to social common sense to dismiss a worker
immediately even when the cause of sickness or injury does not relate to work, particularly
496Tokyo District Court, August 10, 2001, Rouhan, 820, p. 74.
T Tokyo District Court, April 26, 2000, Rouhan, 789, p. 21; Rouhan, 503, p. 32.
498
Tokyo District Court, September 30, 1985, Rouhan, 464, p. 38.
499
Tokyo District Court, August 09, 2002, Rouhan, 836, p. 94.
500
Most of the companies in Cambodia treat their internal work rules as confidential documents that are handed
only to their staff. The understanding of the rules of employment is possible when the Arbitration Council quotes
parts of them in the awards. Moreover, the Arbitration Council mostly deals with the collective disputes of thegarment sector, tourism sector such as hotel, and restaurant, and other labor-intensive industries.
501[2006] Case no 73/06 (kh The Arbitration Council, September 18, 2006).
497

132

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

a worker who has been working for the company for years. There is a system of worksuspension that maintains the status of the worker while allowing them to be absent fromworkplace for a specified period for medical treatment.502 A dismissal is allowed when theworker is unable to return to work after the expiration of the maximum period of worksuspension, for example the period of six month. The evaluation of the possibility to work is
decided according to an examination by a doctor and also to the evaluation by the judge of
the worker’s condition during the trial process.503
In cases where the type of work is unrestricted, in consideration of the worker’s
experience and responsibility, the size of the company, the real situation regarding thepossibility or impossibility of transfer, and the principle of good faith, the appropriateness of
dismissal on the grounds of sickness is allowed when there is possibility of returning to work
incrementally. In this case, even though the employee cannot work in the same position, heor she should be provided with a chance to work in another position that fits with thecondition of the his or her capacity.504 In another case, the dismissal was an appropriate
measure when the employer, after the expiration of the period of work suspension, provided
the worker with another reasonable period sufficient for the worker to get back his working
ability little by little.505 According to the above judicial rules, the worker is protected to theextent that the dismissal is the last measure even if he or she cannot perform former duties
after the expiration of the period of work suspension.
In Cambodia, the employer also can discharge the worker on the grounds of private
sickness or injury. According to the Labor Law, private sickness or injury is one of the reasons
for work suspension that cannot exceed the period of six month; however, this period can beextended until there is a replacement.506 In practice an extension after the elapse of the sixmonth period seems to be impossible because it is not hard for the employer to find thereplacement. In addition, most of the rules of the employment in companies have set a systemof work suspension for a period of six months. If the worker cannot return to the former
position after the elapse of this period, the court considers the dismissal to have taken placewith reasonable grounds.507 Therefore, the worker is only protected from dismissal to the
maximum period of six months. When compared with Japan, there is no case in Cambodiathat requires an employer to transfer a worker to an easier job or provide the worker with areasonable time in order to regain his or her ability to do the previous work.

4. Rules on dismissal due to worker’s behavior
Dismissal based on worker’s offences plays a role as a disciplinary measure. A
discharge combines rules for disciplinary measures in Article 15 and rules for dismissal in
Article 16 of the Labor Contract Act. Accordingly, the dismissal must take place based on
502

Tokyo District Court, March 30, 2007, Rouhan, 942, p. 52.
Tokyo District Court, February 18, 2005, Rouhan, 892, p. 80.
504
Supreme Court, April 09, 1998, Rouhan, 736, p. 15.
505
Sapporo District Court, September 21, 1999, Rouhan, 769, p. 20.
506
The Labor Law of Cambodia of 1997, art. 71 (3) (1997).
507[2004] Case no 29/03 (kh The Arbitration Council, February 02, 2004); [2004] Case no 62/04 (kh The
Arbitration Council, September 09, 2004).
503

133

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

concretely reasonable grounds and be appropriate from the point of view of social
consciousness. The existence of a concretely reasonable ground is accepted when theemployer proves that the misconduct of the workers falls under dismissal grounds in theinternal work rule of the company. Consequently, disputes between parties in conflicts overthe interpretations of the clauses for the rules of employment are inevitable.
Even though an employer may succeed in showing a reasonable ground for discharge,
judges will invalidate the dismissal if they see that the termination of the employment
contract is not an appropriate disciplinary measure. The appropriateness of dismissal is anevaluation of all facts of the case. The review of the judicial rules has shown that
inappropriate dismissals are those that violate the principles of proportionality, double
jeopardy, equal treatment, or do not follow procedures in collective agreements. The
requirement of appropriateness has made dismissal be the last method of disciplinary
measures.
In Cambodia, dismissal in the case of worker misconduct also functions in the role ofbeing a disciplinary measure. According to the Labor Law, disciplinary action must be
proportional to the level of seriousness of the misconduct. According to the arbitrator-maderules, only serious misconduct is a reasonable ground for dismissal. The employer has toprove that the worker’s offence was a type of serious misconduct prescribed in the Labor
Law and internal work rules of the company. There is a tendency by the Arbitration Council
to strictly interpret and define serious offences in the Labor Law and internal work rules tothe extent that an alleged misconduct is not easily accepted as being a serious one.508 In
addition, even though the worker commits a serious misconduct, the dismissal is not anappropriate measure when the worker unintentionally misbehaves, or when the employee
cannot control his or her behavior. 509
According to the Labor Law, the right to disciplinary measures based on serious
misconduct must be taken within seven days after the employer or his representative has
acknowledged the act of committing serious misconduct.510 If the employer fails to do so, heor she cannot punish the worker. Hence, the employer has to take action as soon as possible,
if he or she does not want to lose their right to dismiss the worker. In this case, the employer
is not required to respect the duty of prior notice.511 The seven-day period for the extinctionof the right to dismissal means that on the one hand employers can dismiss a problem worker
as quickly as possible from their company. On the other hand, the Labor Law seems to favor
the worker by depriving the rights of an employer who is careless in using their rights in time.
In addition to the provisions of the Labor Law, the Arbitration Council has developed
a concrete and proactive rule for the worker against arbitrary dismissal on grounds relating
to serious misconduct. This development is because most of the disputes are collective labor
disputes in the garment factories. Most of disputes are dismissals of union leaders for
activities or workers on the grounds of their misconducts. There has been a noticeable508[2004] Case no 13/04 (kh The Arbitration Council, March 30, 2004); [2009] Case no 79/09 (kh The
Arbitration Council, July 15, 2009).
509[2004] Case no 13/04 (kh The Arbitration Council, March 30, 2004); [2005] Case no 59/05 (kh The
Arbitration Council, October 27, 2005).
510
The Labor Law of Cambodia of 1997, art. 26, ¶ 2.
511
Ibid., art. 72, No. 2.

134

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

development in arbitrator-made rules in the case of dismissal due to worker’s misconduct,
which reach the same level of protection as the rules in Japan.
However, the weakness of the rules was inevitable. For example, a number of workers
committed serious misconduct in one case, but the employer dismissed only one worker.512
The employer has the freedom to dismiss or not to keep these workers but when the employer
removes only one of them, then according to the “appropriateness of dismissal” of the ruleof abuse of right in Japan such a dismissal would not be appropriate because it violates theprinciple of equal treatment. In contrast to the courts in Japan which is under rule of the abuseof right, the Arbitration Council in Cambodia rejected the legality of dismissal without taking
care as to whether such a dismissal violated the principle of equal treatment where theemployer has to treat all workers equally and fairly without discrimination. When considering
whether a dismissal is proportional to misconduct, the Arbitration Council in many cases
examines only the purpose or intention of the worker, but fails to examine whether thedismissal violates the principle of good faith or principle of equal treatment.

5. Rules on dismissal due to the necessity of the company
In Japan, the rule of abuse of right in the case of economic or adjustment dismissal
consists of four requirements: (1) the necessity for personnel reduction, (2) the employer’s
efforts to avoid dismissal, (3) reasonable selection, and (4) the provision of explanations or
consultation with the worker’s representative about the procedure of dismissal. Accordingly,
economic difficulty or closure of a section of a company that is part of a business strategy
does not always give the company a reasonable ground for dismissal. Adjustment dismissal
can only take place when the reduction of workers is necessary. The idea of necessity isrecognized according to an economic situation in a business where it has almost reached thelevel of bankruptcy. Though there may be an economic difficulty, personnel reduction shouldbe the last resort after other measures are undertaken to reduce expenses. When personnel
reduction is inevitable, the employer has to make sure that the selection of a worker subjected
to dismissal is made according to reasonable criteria or procedure of selection. In addition,
the employer has to explain and consult with the workers’ representative about the processof adjustment dismissal.
In Cambodia, the rule of valid reason in Article 74 of the Labor Law requires only thatdismissal be taken with a reasonable ground and that in such cases, the reason for discharge
relates to the necessity of the operation of the enterprise. Following the requirement for the
existence of a valid reason, the Labor Law sets the procedures in Article 95 for only dismissalon the grounds of necessity of the operation of the company. These procedures concern the
duty of employers before and after a dismissal. Before dismissal, the employer has toreasonably select the workers, consult with the worker’s representatives, notify the labor
inspector, and suspend layoff in the case of an order by the minster in charge of labor. In
cases where the employer starts the business again within two years after the layoff, theemployer has to contact the dismissed workers and employ them again.
512

13/04 (kh The Arbitration Council, March 30, 2004).

135

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

In the case of an adjustment dismissal, the courts in Japan have long established four
requirements that make such a dismissal the last resort in dealing with economic difficulty or
restructuring of the company. In Cambodia, the rule of valid reason remains weak in terms
of protecting the worker. This weakness is because there is no requirement for the necessity
for personnel reduction or requirement for efforts to be taken for dismissal avoidance. As
discussed in Chapter 2, the two requirements are interrelated due to the fact that the necessity
for personnel reduction is accepted if other measures to avoid personnel reduction take place.
The two requirements are important in making sure that the dismissal is inevitable for thecontinuation of the company.
According to the Labor Law and arbitrator-made rules, the reduction ofwork or closure of part of the operations of a business is a valid reason for
dismissal.513 In the case of dismissal on the grounds of necessity of the operationsof an enterprise, the Arbitration Council fails to clarify whether the reduction of
the work or closure of a part of the operations reaches the level that necessitates
for the reduction of the workforce entailing dismissal as the last resort. During
the operation of business, the companies may face economic difficulty such as a
reduction of work. However, such a difficulty is not a reasonable ground for
dismissal unless it reaches the level where reduction of the workforce isinevitable. The Arbitration Council might consider this but this institution has
yet to receive complicated cases regarding dismissal in the case of economic
difficulty. What is known now is that most of the disputes resolved by the council
belong to garment sector where the operation of production or work exists only
when the buyer companies make orders with these factories. If they do not makean order, the factory closes a section or in a serious situation stops all sections.
Consequently, there is no work for the employees.

6. Remedies for unjustified dismissal
In Japan, there is a consistent rule that each type of reason is under the umbrella of theprinciple of the abuse of right to dismissal which consists two requirements. If an employer’s
unilateral termination of a contract is an abuse of right to dismissal, then the courts have atendency to invalidate this discharge. According to the invalid dismissal, the employment
relationship between the employer and worker continues as when there was no such adischarge. The remedy is reinstatement that guarantees the worker job security and preserves
the lifetime or permanent employment practice in Japan. The courts do not accept monetary
remedy in lieu of reinstatement. Hence, the fired worker’s only one option is to continue
working for the employer, and he or she cannot choose money.
However, the reinstatement alone is not an appropriate remedy in the case of dismissal
because the litigation concerning the dismissal takes a long period of time in which the skillof worker may become out of date. In addition, the courts can only rebuild the legal
relationship but cannot repair the real relationship because the dispute will have broken the513[2005] Case no 32/05 (kh The Arbitration Council, June 17, 2005).

136

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

trust between the employer and worker; therefore, there is a proposal that a court should
provide workers with the option for remedies rather than having only reinstatement. The
worker’s interest and their relation with the employer might be damaged. There was also theclaim that the workers who were reinstated often resigned shortly after they came to thecompany. These complaints explained the reason that there was an attempt to include
monetary compensation in the legislative rule during the amendment of the Labor Standard
in 2003. However, the worker’s representative opposed this initiation. And so, reinstatement
as the only remedy according the judge-made rules remained untouched.
In Cambodia, arbitrator-made rules have established a choice for remedies for
dismissed workers. In cases where the worker requests monetary compensation in lieu ofreinstatement, the Arbitration Council mostly accepts this request. However, in the casewhere a worker’s demand is for reinstatement, the Arbitration Council examines therelationship of the employer and worker before ordering reinstatement. If the relationship has
been broken beyond reparation, monetary compensation is provided instead of reinstatement.
If not, the Arbitration Council orders reinstatement with the amount of wage and all kind of
benefits the worker should have received from the day of dismissal until the day of theissuance of the award.
The Labor Law provides a monetary remedy; particularly Article 91 clearly mentions
that the dismissal without valid reason entitles workers to damages. This article only applies
to a dismissal that takes place without valid reason, but does not apply in the case ofadjustment dismissal that does not follow the procedures in Article 95. This weakness in therules of validity represents a loophole in the Labor Law, which is silent about the procedural
rule governing dismissal and concerns only the existence of valid reason. The Labor Law(Article 95) requires employers to follow procedures such as selection of the workers,
informing the worker’s representatives and the government agency. The Labor Law fails toprovide punishment when the employer violates these procedures.
The arbitrator-made rule has developed and refined the method of calculation for theamount of money. The interesting point about the arbitrator-made rule concerns thecalculation of the amount of monetary compensation. If the employer violates the obligation
to inform the worker’s representatives or Labor Inspector, then the employer has to pay theamount of wage and all benefit the workers would have received for two months.514 There is
no arbitrator-made rule for punishment when the employer fails to conduct a reasonable
selection of workers. Hence, the rule of dismissal in Cambodia, particularly the rule of valid
reason is in the process of development. The rule is comparable to broken pieces that need tobe configured in the right order.
In addition, the Labor Law does not state clearly that dismissal without valid reason
entitles workers to reinstatement because Article 385 only empowers the courts when dealing
with labor disputes to reinstate workers to same position with back pay. Accordingly, thecourt’s decision regarding dismissal with reinstatement as remedy needs review. Since aministerial order invalidates the dismissal on the grounds of discrimination against union’s
leaders, members, and union activities and reinstates workers,515 the court will provide the514

Ouchi, “Special Topic: Change in Japanese Employment Security: Reflecting on the Legal Points.”
Prakas No. 305 SKBY on the Representativeness of Professional Organization of the Workers at theEnterprise and Establishment Level, and the Rights in Collective Negotiation for the Conclusion of Collective

515

137

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

dismissed worker with reinstatement as a remedy. However, it is a rare case to see a court’s
decision that provides reinstatement as a remedy in the case of dismissal without valid reason.
Moreover, there is no ministerial order that provides workers with a reinstatement order inthe case of dismissal without valid reason.
In contrast to the court, the Arbitration Council provides reinstatement as a remedy toa worker who is discharged without valid reason when dealing with collective labor disputes.
In the same way that the Labor Law (Article 385) empowers the court to order reinstatement,
the ministerial order known as Prakas No. 099 (Clause 34) also authorizes the Arbitration
Council to order all kinds of remedies including reinstatement of the worker to the same
position with back pay. 516 With this Prakas No. 99 the Arbitration Council provides
reinstatement not only to workers who are dismissed on the grounds of union discrimination
but also to those whose dismissals was made without valid reason. Based on the arbitratormade rule, the worker’s request for reinstatement is accepted after the Arbitration Council
examines the possibility based on each individual case. For example, if the relationship of an
employer and worker has not broken down beyond reparation, an order of reinstatement isgiven to the worker. If not, the Arbitration Council rejects the claim of reinstatement by anorder of monetary compensation for damages as a remedy.
Even though reinstatement is seen as another mechanism that protects the worker’s job
security, the criticism on these kinds of remedies is that there is no legal ground that clearly
entitles the worker who is dismissed without valid reason to return to their position. In
addition, reinstatement is just an arbitrator-made rule but not the court’s decision. Somescholars would say that reinstatement is a remedy provided only by the Arbitration Council
in collective labor disputes, but no guarantee exists that the court will order reinstatement toa worker whose dismissal is taken without valid reason in the case of individual disputes.
The reason for the above assertion is because the Appellate Court of Cambodia rejected thedecision of the lower court that applied Article 385 to order reinstatement of the workers byinterpreting Article 74 to mean that dismissal was the freedom of the employer and workers
also committed offences.517
There is also a criticism by scholars that strict dismissal according to the rule of abuseof right in Japan may hamper the operations of companies. However, courts in Japan, while
protecting the worker also care for the interests of the company. Courts’ restriction on
dismissal encourages workers’ positive participation in job training inside the company andincreases a worker’s motivation to work and maintain loyalty towards the employer.518 In
addition, though modification of working conditions requires consent from the worker,519 theemployer can unilaterally modify a working condition that is disadvantageous to the worker
as long as such a change is rational.520 In consideration of the business necessity in long-term
Agreement at the Enterprise and Establishment Level (2001).
516
Prakas No. 099 SKBY on the Arbitration Council (2004).
517[2002] Case no No.173 “CHH”/26–09–2002 (kh Appellate Court of Cambodia, September 26, 2002) ; citedin Channmeta et al., Legal Methodologies: Khmer Law, 88–98.
518
Ouchi, “Special Topic: Change in Japanese Employment Security: Reflecting on the Legal Points.”
519
Labor Contract Act of Japan, art. 9 reads (2007)“An employer may not, unless agreement has been reachedwith a worker, change any of the working conditions that constitute the contents of a labor contract in a mannerdisadvantageous to the worker by changing the rules of employment; provided, however, that this shall not
apply to the cases set forth in the following Article.”
520
Ibid., art. 10 reads “In cases where an employer changes the working conditions by changing the rules of138

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

employment relationships, as long as the change is rational, the court accepts the validity of
dismissal of a worker who is opposed to such a modification.521 Moreover, under the longterm employment practices, most of the employment contracts, working rules, and collective
agreements allow the employer to reassign and transfer workers within the company.522
In Cambodia, there is also the tendency in arbitrator-made rules to protect workers
against dismissal and to also allow the unilateral change of working condition by requiring
the management or order to be reasonable and lawful.523 The Arbitration Council accepts
reasonable or lawful management when there is no reduction of wage, no transfer to a far off
place, no transfer from day shift to night shift, and no transfer that affects a substantial change
in the skills required for work.

Conclusion
The comparison of the rule of abuse of right in Japan and the rule of valid reason haveshown that though they are different in substantive rules and levels of protection, they havethe same purpose that is to protect workers against unjustified dismissal. The rule of abuseof right and the rule of valid reason are different in terms of the existence of the absence ofthe employer’s right to dismissal. The rule of abuse of right accepts that the use of dismissal
is the freedom of the employer while the rule of valid reason claims that that right to dismissal
does not adhere to the employer unless there is the existence of a valid reason. Anothernoticeable difference is that the rule of valid reason in Cambodia started from legislative rules
being applied to practice whereas the rule of abuse of right in Japan started from actual
practice and then becoming legislative rules. Since Cambodia has a short history of
application of the rule of valid reason, the level of protection is still weak though the
Arbitration Council has strived to close the loophole of legislative rules since its
establishment in 2003.
If compared with the rule of abuse of right that requires the existence of a concretely
reasonable ground and appropriateness of dismissal, the rule of valid reason in Cambodia
mainly focuses on the existence of a concretely reasonable ground. Hence, as long as theemployer in Cambodia can prove the reasonableness of the alleged grounds, the Arbitration
Council accepts that the dismissal is taken with valid reason. In addition, the Labor Law
employment, if the employer informs the worker of the changed rules of employment, and if the change to therules of employment is reasonable in light of the extent of the disadvantage to be incurred by the worker, theneed for changing the working conditions, the appropriateness of the contents of the changed rules of
employment, the status of negotiations with a labor union or the like, or any other circumstances pertaining to
the change to the rules of employment, the working conditions that constitute the contents of a labor contract
shall be in accordance with such changed rules of employment; provided, however, that this shall not apply to
any portion of the labor contract which the worker and the employer had agreed on as being the working
conditions that are not to be changed by any change to the rules of employment, except in cases that fall under
Article 12.”521
Araki, Labor and Employment Law in Japan, 53.
522
Komiya, “Dismissal Procedures and Termination Benefits in Japan,” 159.
523
[2003] Case no 17/03 & 18/03 (kh The Arbitration Council, November 11, 2003); [2006] Case no 06/06 (khThe Arbitration Council, February 16, 2006); [2008] Case no 137/07 (kh The Arbitration Council, January 10,2008); [2009] Case no 61/09 (kh The Arbitration Council, June 17, 2009).

139

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

provides punishment only in the case of dismissal without valid reason as stated in Article 91
but does not punish the employer when he or she does not follow the procedures in the caseof economic dismissal as provided in Article 95. Because the requirement of the existence of
reasonable ground in the rule of abuse of right, it is possible to say that the rule of valid
reason in Cambodia is a part of the rule of the abuse of right to dismissal in Japan. The Labor
Law or even the arbitrator-made rules have not made termination by the employer as the lastresort for all kinds of dismissal grounds.

140

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Chapter 4: Recommendations
The rule of justified dismissal in Cambodia lacks consistent content for securing
workers to their jobs, and it is even weak in providing compensation to workers. The Labor
Law of Cambodia mainly focuses on the existence of valid reason, and it lacks provisions
that require appropriateness for all kinds of dismissal grounds. The arbitrator-made rules
require dismissal that is a disciplinary measure to be proportional to the misconduct. The
requirement of appropriateness applies to some extent in the case of dismissal on grounds
relating to worker’s misconduct. However, the arbitrator-made rules limit the scope ofappropriateness to the principle of proportionality between the dismissal and the level ofseriousness of the misconduct while paying little attention to other principles, such as theprinciple of good faith or equal treatment.
There is no requirement of appropriateness of dismissal on grounds relating to worker’s
aptitude. For adjustment dismissal, the Labor Law (Article 95) requires an employer toreasonably select the workers, notify and consult with worker’s representatives, and notify
the Labor Inspector about the process of dismissal. When compared with the rule of abuse ofrights in Japan, these procedures are the elements used for the evaluation of theappropriateness of dismissal. Since the Labor Law requires an employer to pay damage(consolation money) to a worker in the case of dismissal without valid reason but fails topunish the employer who violates procedures in collective layoffs in Article 95, the rule ofvalid reason in Cambodia is not consistent and pays little attention to the requirement ofappropriateness in dismissal.
As a contribution to the development of the rule of justified dismissal in Cambodia,
this study aims to suggest that the content of the rules should be based on the rules andpractice of justified dismissal as to be found in Japan. This study considers the requirementof appropriateness of dismissal in addition to the requirement of the existence of valid reason
being introduced into the rules for justified dismissal in Cambodia. Concretely, the argument
is made for the introduction of the rule of abuse of right to dismissal as used in Japan into
Cambodia with some modifications that best fits for the employment practices and current
situation of Cambodia.

Section 1: Introduction of abuse of right in dismissal
1. Reasons for introducing the rule on abuse of right to dismissal to Cambodia
The rule of abuse of the right of dismissal in Japan, which consists of requirements forthe existence of reasonable ground and appropriateness of dismissal, makes dismissal be thelast resort. In contrast, in Cambodia, the existence of a requirement of appropriateness of
dismissal does not exist because the rule of valid reason demands only the requirement of theexistence of reasonable grounds. This study proposes that judges or arbitrators should also
take on board the requirement of appropriateness of dismissal to protect workers against141

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

unfair employment termination by employer.
There are four reasons that are the inspiration for the introduction of the rule of abuseof right to dismissal to Cambodia. First, the Labor Law of Cambodia has a general tendency
in favor of long-term employment relations through the automatic transformation of a fixedterm contract to non-fixed term contract. 524 In 2003, the Arbitration Council whenestablishing the rule of contract transformation also stated that the Labor Law encouraged
employer and worker to conclude undetermined duration contracts because such a contract
guaranteed job security and promoted the commitment of workers towards their duties.525
Accordingly, if the total length of a fixed-term contract including the periods of initial
contract and its renewal exceeds two years, then a fixed-term contract automatically becomesan employment contract of undetermined duration.526
Second, the arbitrator-made rules also have a tendency to promote long-term
employment relationships through restrictions on employer’s freedom for dismissal and inordering reinstatement for dismissal that takes place without a valid reason. In the case of
dismissal on grounds relating to worker’s behavior, the Arbitration Council requires adischarge to take place on grounds of serious misconduct and to be proportional to the levelof the seriousness of the mistake. The proportionality between mistake and punishment is a
result of the arbitrators’ evaluation of the concrete case surrounding the execution of
dismissals, namely the intention of the workers, situation that provoked the workers tocommit misconduct.527
According to the Labor Law and ministerial orders, reinstatement is a remedy in thecase of unlawful dismissal on grounds relating to discrimination on the basis of union
membership, union activities, the discharge of union leaders without authorization from theLabor Inspector, and other prohibited dismissals. However, the Arbitration Council incollective labor disputes has provided workers with protection to job security throughreinstatement in the case of dismissal without valid reason.
Third, along with the promotion of long-term employment in the Labor Law and thearbitrator-made rules, there is a commitment by the companies that wish to employ theirworkers for a long-term relation. The review of several internal work rules in manufacturingindustries (garment sector) and service industries (including banks and legal service)indicates a commitment of employers in providing their workers with sound and safe working
environments.528 The companies promote inside training and provide workers with a chanceof education. In addition, the employers have a system of disciplinary measures that treat
dismissal as the last resort for disciplinary action. In these cases, dismissal only takes placein the case of serious misconduct or in cases where the worker has repeatedly committed
offences and received a series of disciplinary actions during a certain period (for example six
months).
524

The Labor Law of Cambodia of 1997, arts. 67 & 73 (1997).
[2003] Case no 10/03 (kh The Arbitration Council, July 23, 2003); [2011] Case no 105/11 (kh The
Arbitration Council, September 13, 2011).
526[2003] Case no 10/03 (kh The Arbitration Council, July 23, 2003).
527[2004] Case no 13/04 (kh The Arbitration Council, March 30, 2004).
528
In Cambodia, companies considered their internal work rules to be confidential documents. The collectionof these materials was very difficult. A few companies were kind enough to give me full versions of theirinternal work rules while some companies just handed the parts that related to the issues of dismissal.
525

142

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Fourth, the introduction of the rule of abuse of right can help resolve the inconsistencies
in the rule of valid reason that mainly relies on the existence of valid reasons. In Japan,
regardless of the type of grounds for discharge, there is a consistent rule that consists of therequirement of valid reason and appropriateness with in judging the dismissal as valid orinvalid. If Cambodia applies the rule of abuse of right, this rule can solve the problem of
separation between the requirements of the existence of a valid reason from procedures incase of economic dismissal. In this sense, the procedural rule in Article 95 of the Labor Law
is one of the requirements of appropriateness. More importantly, there will be a consistent
rule that requires the existence of concretely reasonable grounds and the appropriateness of
dismissal for all kinds of grounds. These grounds are concerned with a worker’s capacity or
misconduct or the necessity of the operations of the company.

2. Legal ground (Abuse of right in Civil Code)The present Civil Code of Japan focuses on the principle of freedom, namely theprinciple of absoluteness of the right to property, the freedom to complete contracts, and theprinciple of misconduct liability.529 Accordingly, one’s property is absolutely protected as theright to property, contracts can be performed freely, and the conduct of people does not
involve responsibility if there has been no offence. Even if it is a right according to theregulation of the law, when the exercise of such a right leads to socially undesirable results,
the exercise of the right is not allowed.530 This idea explains why after the end of the WorldWar II, the Civil Code of Japan placed restrictions on the exercise of civil rights according tothree fundamental principles in Article 1. The three principles are (1) private rights must
conform to the public welfare, (2) the exercise of rights and performance of duties must be
done in good faith, and (3) no abuse of rights is permitted.
Since the employer’s right to terminate a contract is a civil right, the courts haverestricted the right to dismissal by applying the general principle of the abuse of rights in the
Civil Code. Article 1(3) prohibits the abuse of rights. As long as there is a right, it is unable
to say that certain conduct is an abuse, but if certain conduct is an abuse, it is able to say that
there is no right.531 Before being amended in 1947, the Japanese Civil Code of 1898 did nothave any provision that clearly prohibited the abuse of rights though it borrowed many
principles from the first draft of the German Civil Code of 1891 and a few principles fromthe French Civil Code.532 However, this general rule had long been introduced by Japanesescholars and used by the courts when resolving conflicts relating to the exercise of property
rights. Eiichi Makino was famous for his pioneering study on the doctrine of the abuse ofrights in French legal scholarship.533 The writings of Makino in 1905 showed that in Europe529

川井健, はじめて学ぶ民法 -- 所有、契約、不法行為、家族 Start Studying Private Law -- Ownership,
Contract, Torts, Family (有斐閣, 2011), 14.
530
山田 et al., 民法 (1) 総則 第 3 版補訂, 21–22.
531
Ibid., 24.
532
Hiroshi Oda, Japanese Law (Oxford ; Tokyo: Oxford University Press, 1999), 127–35.
533
John Owen Haley, The Spirit of Japanese Law, Spirit of the laws (Athens: University of Georgia Press,
1998), 158.

143

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

there was a limitation on individual rights according to considerations of the collective needs
inside society and the community.534 In addition to the introduction of the doctrine of theabuse of rights by scholars, in 1919 the highest court of Japan adopted this doctrine in a casewhere the owner of an ancient pine tree filed a lawsuit for damages against the state-owned
national railway. 535 The pine tree died due to the dirty smoke from the trains and thevibrations due to the sound. The owner of the tree in this case claimed damages of 2000 Yen
with consolation damage of 100 Yen. The highest court stated that:
Even with the exercise of a right, it is necessary to be in the reasonable scope acceptedin the law, when the exercise of the right exceeds the level that cannot be tolerated by
the victim or the level that is generally accepted based on the social common sense, itgoes beyond the appropriate scope because of the intention or mistake, and invades theright of the other because of unjust methods, the illegal conduct exists.536
This decision reflects a linkage between the abuse of rights and social sense.
Therefore, the exercise of right is abused if it produces a result (damage) that exceeds
the scope to an extent considered unacceptable or unreasonable from the point of view ofsocial conscience. The abuse of right has been applied in the case of dismissal. The courts
have made the content of the abuse of right to consist of two main requirements: “theexistence of a valid reason” and “the appropriateness of dismissal.”Cambodia enacted its new Civil Code in 2007, which came into enforcement in 2011,
and was also founded based on the principle of freedom and private autonomy and at thesame time introduced the general principle that restrict the exercise of private rights. The
Civil Code (Article 4) provides that “The abuse of rights shall not be permitted. If a right isused beyond the scope of the protection originally anticipated, the exercise of such right shallnot be valid.”537 The Civil Code of Cambodia was drafted under support from the Japanese
government. From the close relationship between the Civil Code that is the general rule andthe Labor Law that is the specific rule, it can be concluded that the regulations in the Laborlaw must be interpreted according to the principles of the Civil Code. In this sense, this study
suggests that even if the employer has a valid reason to terminate a worker’s employment, if
the discharge is not an appropriate measure or takes place without following reasonable
procedures, then it will constitute an abuse of right.
In Japan, the principle of proportionality and equal treatment are determinants of theappropriateness of dismissal. In the practice of collective labor relations in Cambodia, theArbitration Council requires dismissal to be an appropriate measure to some extent. That is
to say, the council also applies the principle of proportionality to balance the seriousness ofoffences and the choice of dismissal according to worker’s intention. However, the council
fails to apply the principle of equal treatment when deciding the legality of dismissal.
According to principle of the equal treatment, in cases where there are many workers
committing a serious offence, the employer has valid reason to dismiss all the workers. Whenthe employer fires only one worker, the dismissal is not appropriate as it violates the principle
534

Ibid., 159.
川井, はじめて学ぶ民法 -- 所有、契約、不法行為、家族, 15–16.
536
土田 et al., 条文から学ぶ労働法, 15.
537
The Cambodia Civil Code of 2007, art. 4 (2007).
535

144

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissalof equal treatment. Consequently, the employer’s unilateral termination of contract
constitutes an abuse of the right to dismissal.
In order to have consistent rules for the sake of secure and stable employment practices,
there should be a uniform rule of dismissal regardless of the types of reasons, namely grounds
relating to capacity, misconduct, and necessity of the operations of the enterprise. Therefore,
the content of the rule of justified dismissal in Cambodia consists of the requirement for the
existence of a valid reason and the requirement of appropriateness of dismissal. Accordingly,
in the case of dismissal due to the necessity of the operations of the enterprise, the employer
has to prove that economic difficulty reaches a level that necessitates the reduction of
personnel. Even if the employer has a valid reason to lay off the workers, the employer has
to abide by the procedures in Article 95 of the Labor Law. If the employer fails to respectthese procedures, such a dismissal constitutes an abuse of right. In conclusion, the rule of theabuse of right resolves the problem of violation of the procedural rules in Article 95 byincluding it as one of the elements in the rule of the abuse of right to dismissal.

Section 2: Content of rule of justified dismissal for Cambodia
1. Dismissal due to worker’s aptitude
This study concludes that the rule of justified dismissal on grounds relating to worker’s
capacity consists of two requirements: the requirement of a valid reason and the requirementof the appropriateness of the dismissal. Being poor in capacity is not an offence on the partof the worker. An employer cannot dismiss the worker on grounds relating to poor capacity
unless there is a regulation in the internal work rule. The internal work rule of the company
should regulate that only explicitly poor capacity noted through appropriate methods ofevaluation can lead to the dismissal of the worker.
The appropriateness of dismissal is a case where the concerned worker receives anopportunity for education or training or transfer to another position that fits with the capacityof worker. This rule is practicable because the internal work rules of many companies
encourage their workers to keep updating their skill and knowledge through in-house andoutside education or training. The possibility of transfer is also feasible for large companies
in Cambodia.
A worker’s illness is a reasonable ground for dismissal when the period of worksuspension has expired, but the worker cannot return to the same position. In Japan, if typeof duty is not restricted, when the worker request to work in another position that is lessburdensome than the previous one after the expiration of a work suspension, then theemployer has a duty to accept the worker to this position. In Cambodia, there should be sucha rule that after the expiration of maximum period of work suspension the worker cannot
return to previous position, but the worker can request for another position. A worker who
has just recovered from illness or injury should not be involved in any job with major
responsibility or heavy burdens or a large amount of work. There is a period when the worker

145

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

needs time to recover from illness or injury step by step. This consideration can be implied
from a rule that the employer is prohibited from involving a woman with heavy work during
the first two months after returning from maternity leave. 538 Hence, there should be areasonable period in which the worker can recover slowly so as to take on the previous
position. Moreover, the dismissal is not appropriate if the employer fires only one worker
while keeping the other workers who have similar health conditions.

2. Dismissal due to worker’s misconduct
The rule of justified dismissal in the case of worker’s misconduct also consists of theexistence of a valid reason and the appropriateness of discharge. First of all, there must be an
examination of whether or not the misconduct of the worker was a type of serious misconduct
enumerated in the Labor Law, Ministerial Orders, or internal work rules of the company.
Then, the employer has to comply with the following rules such as extinction of the right todisciplinary measures, proportionality of dismissal to the level of seriousness of the
misconduct, and the prohibition of double punishment for the same misconduct. The
proportionality of dismissal in this case requires a consideration on the worker’s intention orsituation that led to the committing serious offences. A dismissal cannot target one worker
when he or she makes a mistake unintentionally. In addition, the Arbitration Council should
consider the legality of a dismissal based on the principle of equal treatment.
The Arbitration Council has developed a comprehensive rule of justified dismissal on
grounds relating to worker’s misconduct because most of the collective labor disputes arise
from the garment sectors. The dismissals mostly concern the employer’s allegations against
the worker on the grounds of committing serious misconduct. In addition, the Labor Law hasenough provisions that provide rules for dismissal in cases of worker’s misconduct. The ruleof the Arbitration Council and the Labor Law in this case seem to have a similar level ofworker’s protection with the rules in Japan. However, the Arbitration Council should evaluate
the appropriateness of dismissal not only based on the principle of proportionality, but also
on the principle of good faith and principle of equal treatment.

3. Dismissal due to necessity of enterprise
The rule of justified dismissal on grounds relating to the necessity of operation ofenterprise should consist in the requirement for the existence of a valid reason and theappropriateness of the dismissal. Appropriateness in such cases should also include theprocedural rules provided by Article 95 of the Labor Law. The Arbitration Council has
defined the necessity of the operations of an enterprise to mean that there is a reduction inwork or the closure of a part of the company. The interpretation is made in the context ofcollective labor in of the garment sector where workplaces are more likely to be close
538 In Cambodia, women are entitled to maternity leave for 90 days. The Labor Law of Cambodia of 1997, art. 182 (1997).

146

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

whenever there is no work for the workers due to a decline in orders from buyers.
Judges or arbitrators should interpret the reasonable grounds for dismissal in the caseof the necessity of enterprise as the necessity for workforce reduction. This is because
reduction of work or closures of the buildings where the workers are working do not always
reach the level of serious economic difficulties that make dismissal unavoidable. The
necessity for workforce reduction is recognized when the employer has tried to reduce otherexpenses and personnel reduction is the last resort to deal with economic difficulties.
Therefore, the employer must take other measures to avoid dismissal such as transfer to othersections.
The employer has to follow the procedures in Article 95. First of all, the employer has
to select the workers for dismissal according to considerations regarding professional
qualifications, seniority, and family burden. Second, the employer has to inform the worker’s
representatives and obtain their suggestions upon the announcement of the layoffs and takemeasures to minimize the impact of the dismissals. Third, the employer should continue
informing and participating in meetings summoned by the Labor Inspector according to therequest of the worker’s representatives to examine the impact of the proposed layoff. Fourth,in exceptional cases, the employer must delay the layoff for a period of not more than 30days according to the regulation of the Minister in charge of labor in order to find a solution.
In the case where the employer violates these procedural rules, even though there is a valid
reason in regard to the operations of the enterprise, the dismissal is still an abuse of right.

Section 3: Remedies (modification of the abuse of right to dismissal)
This study suggests that a worker who is a victim in the case of an abuse of right todismissal in Cambodia has the choice to demand monetary compensation or to request
reinstatement with back pay or retroactive wages. In such a case, the judge or arbitrator is theone who decides the appropriateness and the possibility of this request according to the realcondition of the employment relationship between the employer and the workers. The
suggestion is made according to the current practice in collective labor disputes. The Labor
Law provides workers who are dismissed without a valid reason to monetary compensation
while the Arbitration Council provides workers with reinstatement as another protection in
the practice of collective labor disputes. If the relationship between the employer and theworker is unbroken, the reinstatement is an appropriate measure for securing the employment
for the worker. If not, monetary compensation for emotional damages becomes a better
solution.

1. Monetary compensation
Under the Labor Law, monetary compensation is consolation money or compensation
for non-economic harm in cases of dismissal without valid reason. Article 91 of the Labor
Law stipulates, “The termination of a labor contract without valid reasons, by either party to147

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

the contract, entitles the other party to damage.”539 Article 91 does not apply in the case where
the worker unilaterally ends an employment contract of unspecified duration because Article
74 does not demand the worker have a valid reason for the termination of the employment
contract of undetermined duration. In addition, according to Article 91, the use of damages
is different from dismissal indemnity.540 Furthermore, in cases of dismissal without a valid
reason, the worker can request for an amount of money equal to the amount of dismissal
indemnity, and in this case, the worker is exempted from any obligation to prove thedamage.541
Article 91 does not apply in case of adjustment dismissal where the employer violates
the procedures in Article 95 of the Labor Law. In addition, there is no provision of the Labor
Law that punishes an employer who does not abide by the procedures in Article 95. Because
the rule of abuse of right consists of the requirement for the existence of valid reason and therequirement of appropriateness of dismissal, the procedural rules in Article 95 of the Labor
Law are also the requirement for the appropriateness of adjustment dismissal. Though theemployer may have a valid reason relating to necessity of the operations of the enterprise, if
the employer violates the requirement of appropriateness, then the dismissal is an abuse ofrights.
While the rule of valid reason is located within the scope of the Labor Law, the rule of
the abuse of rights is under the umbrella of the Civil Code of Cambodia. According to the
Civil Code, there are two kinds of monetary compensation: one for economic loss and theother for non-economic damage. They are a result of the application of the rules on tort in
the Civil Code of Cambodia that came into force in 2011. From the relationship between thecode that is the general law and the Labor Law that is the specific law, provisions on tort inthe code apply in the case where the employer dismisses the worker without a valid reason
and the execution of dismissal or the discharge itself is not appropriate according to social
consciousness.
Article 743 of Civil Code on elements of general tort and burden of proof reads:(1) A person who intentionally or negligently infringes on the rights or benefits ofanother in violation of law is liable for the payment of damages for any harm occurring
as a result.
(2) Paragraph (1) shall apply mutatis mutandis to cases where a harm has occurred due
to non-performance of a certain act with respect to which the actor owes a duty toperform such act.
(3) Except as otherwise provided in this Code or in other laws, the person seeking
damages must prove the intent or negligence of the tortious actor, the causal
relationship between the actions of the tortious actor and the harm that occurred, andthe harm suffered by the injured party.
Article 744 of the Civil Code on damages for non-economic harm reads:
The person liable under the provisions of Article 743 (Elements of general tort and539

Ibid., art. 91, ¶ 1.
Ibid., art. 91, ¶ 2.
541
Ibid., art. 91, ¶ 3.
540

148

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

burden of proof) must also pay damages for non-economic harm.
According to Article 743 and Article 744 of the Civil Code, the worker does not lose
his or her right to claim for damages in cases where the dismissal is an abuse of right. Article
743 is an application of Article 709 of the Civil Code of Japan that provides the general rulefor damage in all kinds of tort, and Article 744 is the application of Article 710 of the Civil
Code of Japan concerning the rules on liability for damage for non-economic harm. However,a worker has to prove that (1) there was an employer’s intention or mistake, (2) there was acausal relationship between the illegal action of the employer and the damage sustained by
the worker, and (3) the conduct of the employer is illegal as it is a violation of law.542
The compensation for economic harm depends on the employer’s concrete violation of
the worker’s rights or benefits provided by the laws. For example, under Labor Law (Article95), the worker has the right to be protected from dismissal in cases of economic dismissal
by requiring the employer to conduct a reasonable selection of workers to be dismissed, toinform and consult with the worker’s representative to find solutions for minimizing theeffects of dismissal, and to inform Labor Inspector in order to gain their intervention whenneeded. If the employer intentionally or negligently fails to follow these procedures, theemployer has to be responsible for economic damage arising for such a violation. In practice,if the employer fails to reasonably select the worker and fails to inform the worker’s
representative, the Arbitration Council decides the compensation by ordering the employer
to pay wages and benefits the worker should have received from the period of dismissal tothe date of issuance of the award.543 In another case, if the employer fails to inform theworker’s representative and the Labor Inspector, the council will order the employer to pay
the compensation equal to an amount of two months of wages and all kinds of benefits
because the worker loses a chance to have intervention from the government to delay thelayoff for two months.544
In addition to compensation for economic harm, the worker can also claim forcompensation for non-economic loss, known as consolation money or money for repairingdamage to reputation, or emotions. Article 744 of the Civil Code is the general rule used asa basis to claim for consolation money. Article 91 of the Labor Law is the special ruleproviding a worker with consolation money when he or she is fired without a valid reason.
In this case the discharged worker automatically receives consolation money that is equal tothe amount of dismissal indemnity without having an obligation to show proof of damage. In
addition, the worker can claim for consolation money according to the requirement of theappropriateness of dismissal. For example, during the process of dismissal, if, for example,
the employer treats the worker unfairly or unequally, discriminates against the worker, causes
damage to reputation or has a malevolent intention to dismiss the worker, the dismissed
worker has to show evidence of facts and damages arising from employer’s illegal conduct.

542

There are four requirements in order to have compensation in case of tort: (1) there is intention or mistakeof tortious actor, (2) there is causal relationship between tortious conduct and damage, (3) there is competence
to assume liability, and (4) the conduct of the tortious actor is illegal. 野村豊弘, 民事法入門 第 5 版
Introduction to Civil Law (5th Edition), 第 5 ed. (有斐閣, 2007), 112.
543
[2004] Case no 02/04 (kh The Arbitration Council, April 16, 2004).
544[2010] Case no 21/10 (kh The Arbitration Council, April 23, 2010).

149

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

2. Reinstatement
The reinstatement of a worker is the remedy granted to employees in cases where there
is an employer’s violation of the prohibition of dismissal. In the practice of collective labor
disputes, the Arbitration Council expands such protection to the worker in cases where
dismissal takes place without valid reason. A reinstatement secures workers to their jobs
because the employer cannot merely pay the money and dismiss the workers. According toarbitrator-made rules, the council has authorization to consider whether monetarycompensation or reinstatement is an appropriate remedy for a dismissal made without valid
reason. Even if the worker requests reinstatement, the Arbitration Council may reject theclaim and offer monetary compensation instead. In contribution to the efforts of the
Arbitration Council in protecting workers in their job, this study recommends thatreinstatement should be provided to workers when dismissal takes place without a concretely
reasonable ground and is not appropriate based on social common sense. There are many
legal grounds that can support the courts and the Arbitration Council in reinstating workers.
First of all, the power to order reinstatement belongs to the court. The Labor Law(Article 385) reads:
Any labor dispute covered by Chapter XII of this law that could not be settled throughconciliation can be brought before the Labor Court…Within its mission to find asettlement for a dispute, the Labor Court can take a number of necessary measures asfollows: (1) Order the reinstatement of a dismissed worker, by retaining his former
position and paying him a retroactive wage…545
Since there is no Labor Court, the ordinary court has authority to resolve a labor disputeand accordingly can order the employer to reinstate the worker in the previous position withpayment from the date of dismissal until the issuance of the judgment.
Second, the power for an order of reinstatement belongs to the Arbitration Council.
Ministerial Order/Prakas No. 099 (Clause 34) authorizes the Arbitration Council when
dealing with the collective labor dispute to issue “orders to reinstate dismissed employees totheir former or another appropriate position.”546 The Arbitration Council uses its power toreinstate the worker not only in the case of the prohibited dismissals such as discrimination
against union or union activities, but also in the case of dismissal without valid reason. The
arbitrator-made rules that consist of monetary compensation and reinstatement are commonly
practiced in collective labor disputes.
The Labor Law (Article 385) empowers judges and Prakas No. 099 (Clause 34)
empowers arbitrators to reinstate the worker. In the practice of collective labor disputes, theArbitration Council has provided reinstatement to workers whose dismissal took place
without valid reason. The Arbitration Council should further provide reinstatement to aworker who is fired without valid reason and when the dismissal is not appropriate from asocial common sense point of view. And then, in the case of adjustment or economic
545
546

The Labor Law of Cambodia of 1997, art. 385.
Prakas No. 099 SKBY on the Arbitration Council, Clause 34 (2004).

150

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

dismissal, when an employer has a valid reason but fails to follow the procedures in Article
95, the discharge is not appropriate and is an abuse of right.
A reinstatement is provided to a worker according to the rule of the abuse of rights thatis a general principle in the Civil Code of Cambodia. Article 4 reads, “The abuse of rights
shall not be permitted. If a right is used beyond the scope of the protection originally
anticipated, the exercise of such right shall not be valid.” When the content of the rule ofjustified dismissal in Cambodia consists of the requirement of reasonable grounds and theappropriateness of dismissal, a discharge that lacks valid grounds and cannot be accepted as
proper is void. Hence, the employment relationship continues as if there was no dismissal.
According to Article 385 of the Labor Law and the arbitrator-made rules, the wages during
the dismissal is the total amount of wage the worker would have received during thedischarge up until the date of the issuance of the judgments or awards. In addition to thisback pay, the worker can claim for consolation money according to Article 744 of the Civil
Code in the case of dismissal that takes place in line with discrimination, unfair treatment,
damage to reputation or the ill intent of the employer. Moreover, the workers can claim forconsolation money according to Article 91 of the Labor Law when the employer fails to
dismiss them with valid reason.
Hence, the content of the rule of abuse of rights in Cambodia has two requirements:“existence of valid reason” and “appropriateness of dismissal according to social common
sense.” There are two kinds of remedies for the abuse of right to dismissal: monetarycompensation and reinstatement.

151

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Bibliography
Abegglen, James C. The Japanese Factory. Perennial works in sociology. New York: Arno
Press , 1979, 1979.
Alibekova, Antonida, ed. Employment Law. The Comparative law yearbook of international
business. Alphen aan den Rijn: Kluwer Law International, 2007.
Araki, Takashi. “Corporate Governance Reforms, Labor Law Developments, and the Futureof Japan’s Practice-Dependent Stakeholder Model.” Japan Labor Review, Japan Institute forLabor Policy and Training 2–1 (Winter 2005).
———. Labor and Employment Law in Japan. Tokyo: The Japan Institute of Labor, 2002.
———. “Legal Issues of Employee Loyalty in Japan.” Comparative Labor Law and Policy
Journal 20 (1999 1998): 267.
Bargawi, Omar. Cambodia’s Garment Industry – Origins and Future Prospects Economic
and Statistics Analysis Unit Working Paper 13. London: Overseas Development Institute,
October 2005. London.
Blanpain, Roger. Corporate Restructuring and the Role of Labour Law. 1st ed. Kluwer Law
International, 2003.
Bolgar, Vera. “Abuse of Rights in France, Germany, and Switzerland: A Survey of a Recent
Chapter in Legal Doctrine.” Louisiana Law Review 35 (1975 1974): 1015.
Bronstein, Arturo S. “Protection Against Unjustified Dismissal in Latin America.”
International Labour Review 129 (1990): 593.
Hel, Chamreoun. Nitekanhea (Labor Law), 2005.
Kanh, Channmeta, Koeut Rith, Copain Carine, Chaing Sinath, Chahine Audrey, Chhorn
Sopheap, Theng Chan-Sangvar, et al. Legal Methodologies: Khmer Law. Association for
Khmer Law, 2006.
Clairon, Marcel. Droit Khmer: Droit Du Travail Khmer Law: Labor Law. 2nd ed. Phnom
Penh, 1962.
Cole, Robert E. “Permanent Employment in Japan: Facts and Fantasies.” Industrial andLabor Relations Review 26 (1973 1972): 615.
Collins, Hugh. Justice in Dismissal : the Law of Termination of Employment. Oxford
monographs on labour law. New York: Oxford University Press, 1992.
Donovan, Dolores A. “Cambodia: Building a Legal System from Scratch.” International
Lawyer (ABA) 27 (1993): 445.
Foote, Daniel H. “Judicial Creation of Norms in Japanese Labor Law: Activism in the Serviceof - Stability.” UCLA Law Review 43 (1996 1995): 635.
Foote, Daniel H., ed. Law in Japan : a Turning Point. Asian law series. Seattle: University ofWashington Press, 2007.
Haley, John Owen. The Spirit of Japanese Law. Spirit of the laws. Athens: University ofGeorgia Press, 1998.

152

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Hang, Sitha. Nitekanhea (Labor Law), 2005.
Nakakubo, Hiroya. “The 2003 Revision of the Labor Standard Law: Fixed-term Contracts,
Dismissal and Discretionary-work Schemes.” Japan Labor Review, Japan Institute for Labor
Policy and Training (2004).
Ly, Kimsok. “Apercu sur le droit du travail au Cambodge” Overview on the Labor Law of
Cambodia. Annale de Factulte de Droit et des Sciences Economiques De Phnom Penh, 1997.
Komiya, Fumito. “Dismissal Procedures and Termination Benefits in Japan.” Comparative
Labor Law Journal 12 (1991 1990): 151.
Matsuda, Yasuhiko. “Dismissal of Workers Under Japanese Law.” Stanford Journal ofInternational Law 20 (1984): 455.
Merryman, John, and Rogelio Perez-Perdomo. The Civil Law Tradition: An Introduction to
the Legal Systems of Europe and Latin America. 3rd ed. Stanford Univ Pr, 2007.
Oda, Hiroshi. Japanese Law. Oxford ; Tokyo: Oxford University Press, 1999.
Ohta, Toshiaki. “Works Rules in Japan.” International Labour Review 127 (1988): 627.
Ouchi, Sinya. “Special Topic: Change in Japanese Employment Security: Reflecting on the
Legal Points.” Bulletin of Japan Institute of Labor Vol. 41-No. 1 (January 1, 2002).
Sibbel, Lejo, and Petra Borrmann. “Linking Trade with Labor Rights: The ILO Better
Factories Cambodia Project.” Arizona Journal of International and Comparative Law 24(2007): 235.
Sugeno, Kazuo. Japanese Employment and Labor Law. Translated by Leo Kanowitz. Tokyo:
University of Tokyo Press, 2002.
Prakas No. 099 SKBY on the Arbitration Council (2004).
Prakas No. 305 SKBY on the Representativeness of Professional Organization of the Workers
at the Enterprise and Establishment Level, and the Rights in Collective Negotiation for theConclusion of Collective Agreement at the Enterprise and Establishment Level (2001).
Prakas No. 313 SKBY on the Roles and Duties of Shop Stewards and Unions (2000).
Directive on the implementation of policy on management and use of land, No. 03 SNN(1989).
Yamakuwa, Ryuichi. “The Enactment of the Labor Contract Act: Its Significance and Future
Issues.” Japan Labor Review, Japan Institute for Labor Policy and Training (2009).
Yemin, Edward. “Job Security: Influence of ILO Standards and Recent Trends.”
International Labour Review 113 (1976): 17.
中窪裕也, 野田進, 和田肇. 労働法の世界 The World of Labor Law. 東京: 有斐閣, 2011.
君和田伸仁. 問題解決 労働法〈5〉解雇・退職 Problem Solving Labor Law〈5〉Dismissal・Resignation. 旬報社, 2008.
和田肇. 人権保障と労働法 Human Right Protection and Labor Law. 東京: 日本評論社,
2008.
土田道夫, 山川隆一, 島田陽一, 小畑史子. 条文から学ぶ労働法 Studying Labor Law
from Articles. 有斐閣, 2011.
153

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

土田道夫, 豊川義明, 和田肇. ウォッチング労働法 Watching Labor Law. 法学教室
Library. 東京: 有斐閣, 2009.
大内伸哉, 山川隆一. 解雇法制を考える : 法学と経済学の視点 Thinking the Legal
System: The View Point of Law and Economics. Edited by 大竹文雄. 東京: 勁草書房, 2004.
山田卓生, 河内宏, 安永正昭, 松久三四彦. 民法 (1) 総則 第 3 版補訂 Civil Law (1)General Principles 3rd Revised Edition. 第 3 版補訂 ed. 有斐閣, 2007.
川井健. はじめて学ぶ民法 -- 所有、契約、不法行為、家族 Start Studying Private Law-- Ownership, Contract, Torts, Family. 有斐閣, 2011.
池田直視. 解雇の法的問題 Legal Problem of Dismissal. 京都: ミネルヴァ書房, 1976.
浜村彰, 唐津博, 青野覚, 奥田香子. ベーシック労働法 第 3 版 Basic Labor Law 3rd
Edition. 第 3 ed. 有斐閣, 2008.
瀧川誠男. 解雇の法理 Doctrine of Dismissal. 東京: 労働法学出版, 1972.
野村正実. 日本的雇用慣行 : 全体像構築の試み Japanese Employment Practice : Trying
to Build An Overall Picture. Minerva 人文・社会科学叢書. 京都: ミネルヴァ書房, 2007.
野村豊弘. 民事法入門 第 5 版 Introduction to Civil Law (5th Edition). 第 5 ed. 有斐閣,
2007.
鳩山秀夫. 日本債權法各論 Detail on Law of Obligation in Japan. 東京: 岩波書店, 1924.
Act on Improvement of Employment Management for Part-Time Workers (1993).
Act on Promoting the Resolution of Individual Labor-Related Disputes (2004).
Act on Securing of Equal Opportunity and Treatment between Men and Women in
Employment (1972).
Act on Whistleblower Protection (2004).
Annual Report. Ministry of Justice, 2011.
C158 Termination of Employment Convention, 1982 (1982).
Civil Code of Japan of 1898 (1898).
Civil Provisional Remedies Act of Japan (1989).
Employment Insurance Act of Japan, 116 (1974).
Final Report: Baseline Study for the Arbitration Council Foundation (ACF). Phnom Penh:
Economic Institute of Cambodia (EIC), August 2010. Phnom Penh.
“Freedom of Association in Practice: Lessons Learned. Global Report Under the Follow-up
to the ILO Declaration on Fundamental Principles and Rights at Work. Report of the DirectorGeneral, 2008” Report, May 1, 2008. http://www.ilo.org/global/publications/ilobookstore/order-online/books/WCMS_096122/lang--en/index.htm.
General Survey of the Reports Relating to the Termination of Employment Recommendation,
1963 (No.119). International Labor Conference 59th Session 1974. Geneva: International
Labor Office, 1974. Geneva.

154

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Industrial Accident Compensation Insurance Act of 1947 (1947).
Industrial Safety and Health Act of 1972 (1972).
“Japanese Working Life Profile 2011/2012- Labor Statistics.” The Japan Institute of Labour
Policy and Training, 2011.
Labor Contract Act of Japan (2007).
Labor Standard Act of Japan (1947).
Law on the Organization and the Functioning of the Constitutional Council and Law on the
Amendment of the Law on the Organization and the Functioning of the Constitutional
Council (1998).
Memorandum of Understanding On Improving Industrial Relations in the Garment Industry(2010).
“Memorandum of Understanding on Improving Industrial Relations in the Garment Industry
and Binding Arbitration.” The Arbitration Council E-Newsletter, January 2011.
“Memorandum of Understanding on Improving Industrial Relations in the Garment Industry
and Binding Arbitration.” The Arbitration Council E-Newsletter, February 2011.
“Memorandum of Understanding on Improving Industrial Relations in the Garment Industry
and Binding Arbitration.” The Arbitration Council E-Newsletter, March 2011.
“News and Updates on Industrial Relations and Labor Dispute Resolution in Cambodia.” The
Arbitration Council Newsletter, July-September 2010, 2010.
“News and Updates on Industrial Relations and Labor Dispute Resolution in Cambodia.” The
Arbitration Council Newsletter, January-March 2011, 2011.
Protection Against Unjustified Dismissal. International Labor Conference 82nd Session 1995.
Geneva: International Labor Office, 1995.
R119 Termination of Employment Recommendation, 1963 (1963).
R166 Termination of Employment Recommendation, 1982 (1982).
Recommendations and Comments on the Draft Law on Juvenile Justice. European
Commission and Unicef, 2007.
Record of Proceedings. International Labor Conference 33th Session 1950. Geneva:
International Labor Office, 1951. Geneva.
Report VII (2) Termination of Employment (Dismissal and Lay-Off). International Labour
Conference 46th Session 1962. Geneva: International Labour Office, 1962. Geneva.
Report VIII (1) Termination of Employment at the Initiative of Employer. International Labor
Conference 67th Session 1981. Geneva: International Labour Office, 1981. Geneva.
Report VIII (2) Termination of Employment at the Initiative of the Employer. International
Labor Conference 67th Session 1981. Geneva: International Labour Office, 1981. Geneva.
Termination of Employment Digest. Geneva: International Labour Office, 2000.
Termination of Employment Instruments Background paper for the Tripartite Meeting ofExperts to Examine the Termination of Employment Convention, 1982 (No. 158), and theTermination of Employment Recommendation, 1982 (No. 166). Geneva: International

155

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5

Labour Office, April 18, 2011.
The Arbitration Council: Annual Report (2010). The Arbitration Council, 2010.
The Arbitration Council: Annual Report (2011). The Arbitration Council, 2011.
The Cambodia Civil Code of 2007 (2007).
The Civil Code of Japan of 1898 (1898).
The Code of Civil Procedure of Cambodia of 2006 (2006).
The Constitution of Cambodia (1993).
The Constitution of Japan (1946).
The International Convention on Economic, Social and Cultural Rights, 1966.
The Labor Code of Cambodia of 1972 (1972).
The Labor Law of Cambodia of 1997 (1997).
The Universal Declaration of Human Rights (1948).
Unfair Competition Prevention Law of Japan, 47 (1993).
Union Act of Japan (1949).
Work Council Act of Germany (1920).
The Arbitration Council, January 20, 2012. http://www.arbitrationcouncil.org/.
[2008] Case no 13/08 (kh The Abitration Council, February 27, 2008).
[2011] Case no 25/11 (kh The Arbitration Council, March 18, 2011).
[2012] Case no 70/12 (kh ———, May 10, 2012).
[2003] Case no 10/03 (kh ———, July 23, 2003).
[2006] Case no 07/06 (kh ———, February 17, 2006).
[2006] Case no 09/06 (kh ———, March 09, 2006).
[2006] Case no 24/06 (kh ———, April 11, 2006).
[2004] Case no 51/04 (kh ———, July 22, 2004).
[2010] Case no 10/10 (kh ———, February 16, 2010).
[2008] Case no 108/08 (kh ———, September 17, 2008).
[2009] Case no 41/09 (kh ———, April 22, 2009).
[2010] Case no 16/10 (kh ———, March 09, 2010).
[2009] Case no 146/09 (kh ———, November 16, 2009).
[2008] Case no 149/08 (kh ———, December 19, 2008).
[2010] Case no 09/10 (kh ———, February 15, 2010).
[2008] Case no 148/07 (kh ———, February 11, 2008).
[2009] Case no 71/09 (kh ———, July 16, 2009).
[2004] Case no 91/04 (kh ———, November 22, 2004).
156

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal[2006] Case no 96/06 (kh ———, November 24, 2006).
[2012] Case no 63/12 (kh ———, April 30, 2012).
[2006] Case no 63/06 (kh ———, August 16, 2006).
[2005] Case no 64/05 (kh ———, November 30, 2005).
[2011] Case no 22/11 (kh ———, March 21, 2011).
[2008] Case no 55/08 (kh ———, May 20, 2008).
[2006] Case no 73/06 (kh ———, September 18, 2006).
[2004] Case no 29/03 (kh ———, February 02, 2004).
[2004] Case no 62/04 (kh ———, September 09, 2004).
[2004] Case no 27/04 (kh ———, June 16, 2004).
[2005] Case no 59/05 (kh ———, October 27, 2005).
[2006] Case no 76/05 (kh ———, January 20, 2006).
[2009] Case no 125/09 (kh ———, October 09, 2009).
[2009] Case no 154/09 (kh ———, December 16, 2009).
[2005] Case no 08/05 (kh ———, March 23, 2005).
[2005] Case no 20/05 (kh ———, April 21, 2005).
[2004] Case no 36/04 (kh ———, June 22, 2004).
[2004] Case no 22/04 (kh ———, June 07, 2004).
[2008] Case no 137/07 (kh ———, January 10, 2008).
[2006] Case no 33/06 (kh ———, May 25, 2006).
[2010] Case no 90/10 (kh ———, August 30, 2010).
[2012] Case no 76/12 (kh ———, May 22, 2012).
[2008] Case no 53/08 (kh ———, May 30, 2008).
[2004] Case no 13/04 (kh ———, March 30, 2004).
[2009] Case no 79/09 (kh ———, July 15, 2009).
[2011] Case no 16/11 (kh ———, February 11, 2011).
[2003] Case no 17/03 & 18/03 (kh ———, November 11, 2003).
[2006] Case no 06/06 (kh ———, February 16, 2006).
[2006] Case no 18/06 (kh ———, March 31, 2006).
[2006] Case no 44/06 (kh ———, June 22, 2006).
[2006] Case no 38/06 (kh ———, June 07, 2006).
[2009] Case no 61/09 (kh ———, June 17, 2009).
[2005] Case no 32/05 (kh ———, June 17, 2005).
[2011] Case no 111/11 (kh ———, September 14, 2011).

157

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5[2011] Case no 54/11 (kh ———, June 17, 2011).
[2004] Case no 71/04 (kh ———, September 2004).
[2006] Case no 53/06 (kh ———, July 28, 2006).
[2007] Case no 17/07 (kh ———, March 09, 2007).
[2007] Case no 35/07 (kh ———, May 08, 2007).
[2007] Case no 109/07 (kh ———, December 12, 2007).
[2008] Case no 48/08 (kh ———, April 29, 2008).
[2003] Case no 03/03 (kh ———, June 11, 2003).
[2004] Case no 19/04 (kh ———, May 05, 2004).
[2004] Case no 17/04 (kh ———, April 08, 2004).
[2008] Case no 01/08 (kh ———, January 23, 2008).
[2008] Case no 06/08 (kh ———, February 12, 2008).
[2010] Case no 21/10 (kh ———, April 23, 2010).
[2009] Case no 40/09 (kh ———, July 06, 2009).
[2002] Case no No.12/12–03–2002 (kh Kompong Speu Provincial Court of Cambodia,
March 12, 2002).
[2002] Case no No.173 “CHH”/26–09–2002 (kh Appellate Court of Cambodia, September
26, 2002).
[2004] Case no 94/04 (kh The Arbitration Council, December 07, 2004).
[2008] Case no 72/08 (kh ———, June 12, 2008).
[2004] Case no 41/04 (kh ———, August 06, 2004).
[2005] Case no 111/04 (kh ———, January 12, 2005).
[2008] Case no 134/08 (kh ———, November 19, 2008).
[2008] Case no 51/08 (kh ———, April 25, 2008).
[2009] Case no 157/08 (kh ———, January 20, 2009).
[2011] Case no 144/10 (kh ———, February 16, 2011).
[2004] Case no 02/04 (kh ———, April 16, 2004).
Tokyo District Court, December 17, 2004, Rouhan, 889, p. 52.
Supreme Court, March 11, 1960, Minshu, 14–3, p. 403.
Osaka District Court, September 12, 1995, Rouhan, 688, p. 53.
Supreme Court, April 09, 1968, Rouminshu, 22–24, p. 845.
Matsuyama District Court, February 08, 1951, Rouminshu, 50, p. 68.
Tokyo District Court, May 08, 1950, Rouminshu, 1–2, p. 230.
Nagoya District Court, December 04, 1951, Rouminshu, 2–5, p. 578.

158

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Supreme Court, April 25, 1975, Minshu, 29–4, p. 456.
———, January 31, 1977, Rouminshu, 268, p. 17.
Tokyo District Court, January 21, 2000, Rouhan, 782, p. 23.
Osaka District Court, October 20, 1995, Rouhan, 685, p. 49.
Tokyo District Court, October 29, 1979, Rouhan, 330, p. 71.
Tokyo District Court, November 29, 2006, Rouhan, 935, p. 35.
———, December 22, 2003, Rouhan, 871, p. 91.
Osaka District Court, November 29, 1991, Rouhan, 599, p. 42.
Tokyo District Court, October 15, 1999, Rouhan, 770, p. 34.
Osaka District Court, March 22, 2002, Rouhan, 832, p. 76.
Nagoya District Court, February 05, 2003, Rouhan, 848, p. 43.
Tokyo District Court, August 10, 2001, Rouhan, 820, p. 74.
———, April 26, 2000, Rouhan, 789, p. 21.
———, August 24, 1987, Rouhan, 503, p. 32.
———, October 22, 2002, Rouhan, 838, p. 15.
———, September 30, 1985, Rouhan, 464, p. 38.
———, August 09, 2002, Rouhan, 836, p. 94.
———, March 30, 2007, Rouhan, 942, p. 52.
———, February 18, 2005, Rouhan, 892, p. 80.
Supreme Court, April 09, 1998, Rouhan, 736, p. 15.
Sapporo District Court, September 21, 1999, Rouhan, 769, p. 20.
Osaka District Court, October 04, 1999, Rouhan, 771, p. 25.
Tokyo District Court, April 24, 2002, Rouhan, 828, p. 22.
———, January 31, 2006, Rouhan, 912, p. 5.
———, August 29, 1979, Rouhan, 326, p. 26.
Saitama District Court, June 30, 2003, Rouhan, 859, p. 21.
Osaka District Court, February 22, 1963, Rouminshu, 14–3, p. 340.
Tokyo District Court, February 06, 1998, Rouhan, 735, p. 47.
Kobe District Court, March 17, 1983, Rouhan, 412, p. 76.
Supreme Court, September 26, 1996, Rouhan, 735, p. 47.
Tokyo District Court, February 07, 2006, Rouhan, 911.
———, November 22, 2005, Rouhan, 910, p. 46.
———, December 17, 2004, Rouhan, 889, p. 52.
159

CENTER FOR ASIAN LEGAL EXCHANGE, NAGOYA UNIVERSITY CALE BOOKS 5———, February 18, 2000, Rouhan, 783, p. 102.
———, June 20, 2002, Rouhan, 830, p. 13.
Fukuoka District Court, December 25, 1997, Rouhan, 732, p. 53.
Osaka District Court, February 12, 1997, Rouhan, 714, p. 48.
Tokyo District Court, April 22, 2002, Rouhan, 830, p. 52.
Osaka District Court, January 07, 2000, Rouhan, 789, p. 39.
Osaka District Court, December 19, 2001, Rouhan, 824, p. 53
Urawa District Court, November 10, 1994, Rouhan, 666, p. 28.
Sendai District Court, September 19, 1985, Rouhan, 459, p. 40.
Nagasaki District Court, September 20, 2000, Rouhan, 798, p. 34.
Sapporo Higher Court, May 11, 2006, Rouhan, 938, p. 68.
Tokyo District Court, September 22, 2003, Rouhan, 870, p. 83.
Fukuoka District Court, December 17, 2004, Rouhan, 888, p. 57.
Fukuoka Higher Court, September 14, 2005, Rouhan, 903, p. 68.
Supreme Court, February 28, 1974, Rouhan, 196, p. 24.
Tokyo High Court, December 11, 2003, Rouhan, 867, p. 5.
Nagasaki District Court, December 24, 1975, Rouhan, 242, p. 14.
Okayama District Court, July 31, 1979, Rouhan, 326, p. 44.
———, May 22, 2001, Roukeisoku, 1781, p. 3.
Osaka High Court, May 17, 2007, Rouhan, 943, p. 5.
Tokyo District Court, March 09, 2004, Rouhan, 876, p. 67.
Supreme Court, October 02, 1983, Rouhan, 427, p. 64.
Kyoto District Court, February 02, 1996, Rouhan, 713.
Nagoya High Court, May 31, 2006, Rouhan, 920, p. 33.
Yokohama District Court, September 26, 2006, Rouhan, 930, p. 68.
Osaka District Court, April 25, 1979, Rouhan, 331, p. 48.
———, May 08, 2000, Rouhan, 787, p. 18.
Tokyo District Court, May 17, 2001, Rouhan, 814, p. 132.
Fukuoka District Court, May 11, 2004, Rouhan, 879, p. 71.
Kofu District Court, May 29, 1987, Rouhan, 502, p. 88.
Tokyo District Court, July 10, 2003, Rouhan, 862, p. 66.
Fukuoka District Court, November 25, 1992, Rouhan, 621, p. 33.
Tokyo District Court, December 19, 2001, Rouhan, 817, p. 5.

160

A Comparative Study on Dismissal Rules in Cambodia and Japan:
A Focus on The Rule of Justified Dismissal

Supreme Court, December 04, 1986, Rouhan, 486, p. 6.
Takamatsu District Court, June 02, 1998, Rouhan, 751, p. 63.
Morioka District Court, October 25, 1979, Rouhan, 333, p. 55.
Fukuoka District Court, December 24, 1998, Rouhan, 758, p. 11.
Sendai District Court, August 26, 2002, Rouhan, 837, p. 51.
Kyoto District Court, June 30, 2003, Rouhan, 857, p. 26.
Fukuoka District Court, February 28, 2007, Rouhan, 938, p. 27.
Nagoya High Court, January 17, 2006, Rouhan, 909, p. 5.
Tokyo District Court, January 07, 1998, Rouhan, 736, p. 78.
Supreme Court, July 20, 1962, Minshu, 16–18, p. 1656.
———, April 02, 1987, Rouhan, 506, p. 20.
———, March 15, 1988, Minshu, 42–43, p. 170.
Tokyo District Court, May 27, 1996, Roukeisoku, 1614, p. 9.
Fukuoka High Court, December 16, 1980, Rouminshu, 31–36, p. 1265.
Chiba District Court, September 24, 1993, Rouhan, 638, p. 32.
Supreme Court, May 25, 2010, Hanji, 2085, p. 160.
Nagoya High Court, February 23, 2005, Rouhan, 909, p. 67.
Osaka District Court, January 29, 1999, Rouhan, 760, p. 61.
Tokyo District Court, December 18, 2000, Rouhan, 803, p. 74.
[2011] Case no 105/11 (kh The Arbitration Council, September 13, 2011).

161