2018.06.01

2016 (Ju) 2099

Minshu Vol. 72, No. 2

Judgment on the adjustment of labor conditions for fixed-term workers in a case where differences in labor conditions between fixed-term workers and indefinite-term workers violate Article 20 of the Labor Contracts Act

Case of final appeal and incidental appeal seeking payment of unpaid wages, etc.

Judgment of the Second Petty bench, partially dismissed with prejudice on the merits and partially quashed and remanded

Osaka High Court, Judgment of July 26, 2016

1. Even if differences in labor conditions between fixed-term workers and indefinite-term workers violate Article 20 of the Labor Contracts Act, the relevant labor conditions for fixed-term workers are not adjusted by the force of the said article to be identical to the corresponding labor conditions for indefinite-term workers.

2. The phrase “due to the existence of a fixed term” in Article 20 of the Labor Contracts Act means that the differences in labor conditions between fixed-term workers and indefinite-term workers have arisen in connection with the existence or non-existence of a fixed term.

3. The phrase “to be found unreasonable” in Article 20 of the Labor Contracts Act means that the differences in labor conditions between fixed-term workers and indefinite-term workers are considered unreasonable.

4. The difference in labor conditions where perfect attendance allowance is paid to indefinite-term workers but not to fixed-term workers constitutes a difference that is found unreasonable as referred to in Article 20 of the Labor Contracts Act under certain circumstances described in the judgment, including those listed in (1) through (3) below.

(1) The aforementioned perfect attendance allowance is paid for the purpose of encouraging workers’ perfect attendance, since it is necessary to secure drivers on duty.

(2) In the content of drivers’ duties, there are no differences between fixed-term workers and indefinite-term workers.

(3) While the rules of employment, etc. provide that salary increases may be awarded to fixed-term workers based on the company’s financial performance and the workers’ on-the-job performance, no such salary increases will in principle be awarded under these rules, and no cases seem to have existed where a salary increase was awarded to a fixed-term worker by taking into his/her perfect attendance into account.

Article 20 of the Labor Contracts Act



Labor Contracts Act

(Prohibition of Unreasonable Labor Conditions by Providing a Fixed Term)

Article 20 If a labor condition of a fixed-term labor contract for a Worker is different from the counterpart labor condition of another labor contract without a fixed term for another Worker with the same Employer due to the existence of a fixed term, it is not to be found unreasonable, considering the content of the duties of the Workers and the extent of responsibility accompanying the said duties (hereinafter referred to as the "content of duties" in this Article), the extent of changes in the content of duties and work locations, and other circumstances.

1. The final appeal is dismissed.

2. Of the judgment of prior instance, the portion related to the appellee’s claim for damages for the lost perfect attendance allowance for the period on and after April 1, 2013 is quashed.

3. For the portion specified in the preceding paragraph, this case is remanded to the Osaka High Court.

4. The remaining portions of the appellee’s incidental appeal are dismissed.

5. The costs of final appeal shall be borne by the appellant and the costs of the portions of the incidental appeal specified in the preceding paragraph shall be borne by the appellee.

I. Outline of the case

1. In this case, the appellee, who works at the appellant under a labor contract with a fixed term (hereinafter referred to as a “fixed-term labor contract”), alleges, among other things, that the differences in no accident allowance, work allowance, food allowance, housing allowance, perfect attendance allowance, commuting allowance, family allowance, bonus, regular salary increase and severance allowance (hereinafter collectively referred to as “Wages, Etc.”) between the appellee and workers who have executed with the appellant a labor contract without a fixed term (hereinafter referred to as an “indefinite-term labor contract”) (hereinafter referred to as “regular employees”), violate Article 20 of the Labor Contracts Act (as amended by Article 2 of the Act (Act No. 56 of 2012) that revises a part of the Labor Contracts Act; the same applies hereinafter), and seeks from the appellant, among other things: (1) a confirmation that, under the labor contract, the appellee is in a position which grants the appellee the same rights as the regular employees in terms of the Wages, Etc. (hereinafter this claim is referred to as the “Confirmation Claim”); and (2) (i) payment of the differences between the amounts of no accident allowance, work allowance, food allowance, housing allowance, perfect attendance allowance and commuting allowance (hereinafter referred to as the “Allowances”) paid to a regular employee during the period from October 1, 2009 to November 30, 2015 and the amounts of the Allowances paid to the appellee during the same period, as a primary claim (hereinafter this claim is referred to as the “Wage Differences Claim”); or (ii) compensation for damage in the amount equivalent to the aforementioned differences, as an alternative claim (hereinafter this claim is referred to as the “Damage Claim”).

2. An outline of the facts related to the case confirmed by the court of prior instance is as described below:

(1) The appellant is a stock company whose objectives include general motor truck transport business and with a workforce of 4,597 employees as of March 31, 2013.

(2) The appellee executed a fixed-term labor contract with the appellant around October 6, 2008 upon the following terms and conditions and has been engaged in delivery services as a truck driver. Thereafter, the aforementioned labor contract has been renewed sequentially and the appellee’s hourly rate has been raised from 1,150 yen to 1,160 yen (hereinafter the labor contract between the appellant and the appellee is referred to as the “Labor Contract,” whether before or after a renewal).

Term: From October 6, 2008 to March 31, 2009 (subject to renewal)

Place of work: Hikone Branch

Job content: Driver for assigned vehicles

Wages: Hourly rate, 1,150 yen; commuting allowance, 3,000 yen per month

Salary increases & bonuses: Salary increases and bonuses will not be awarded in principle, but may be awarded based on the Company’s financial performance and the employee’s on-the-job performance.

(3) The rules of employment applicable to regular employees (hereinafter referred to as the Rules of Employment for Regular Employees”) provide that a severance allowance will be paid when an employee leaves the company after working for five years or longer. The salary regulations which apply to regular employees and have a nature of rules of employment (hereinafter referred to as the “Salary Regulations for Regular Employees”) provide, among other things, that the base salary consists of age-based wages, seniority-based wages and performance-based wages, that a driver who has worked without an accident for one month will receive a no accident allowance of 10,000 yen, that employees who are engaged in special services will receive a work allowance between 10,000 yen and 20,000 yen per month, that a food allowance of 3,500 yen per month will be paid to help employees with their meals, that employees at the age of 21 years or younger and those at the age of 22 years or older will receive a housing allowance of 5,000 yen and 20,000 yen, respectively, per month, that a driver with perfect attendance for a month will receive a perfect attendance allowance of 10,000 yen per month, that employees who always commute using certain means of transportation or by car, etc. will receive a prescribed commuting allowance according to the means of transportation and the commuting distance, that employees with dependent family members will receive family allowance, and that bonuses will be paid according to the company’s financial performance.

At the Hikone Branch where the appellee works, a work allowance of 10,000 yen per month is paid uniformly to all regular employees. According to the Salary Regulations for Regular Employees, the amount of commuting allowance paid to regular employees whose means of transportation and commuting distance are the same as the appellee’s is 5,000 yen per month.

(4) The “Rules of Employment for Contract, Temporary and Part-time Employees” applicable to, among others, workers who have executed a fixed-term labor contract with the appellant (hereinafter referred to as “contract employees”) (hereinafter referred to as the “Rules of Employment for Contract Employees”), provide, among other things, that the base salary will be determined in the form of hourly rate for each employee based on the content of his/her duties, that employees who commute using means of transportation will receive the actual cost of commuting within the prescribed limits, that salary increases will not be awarded to employees in principle but may be awarded based on the company’s financial performance and the employees’ on-the-job performance, and that employees will receive no bonuses and no severance allowance in principle. The Rules of Employment for Contract Employees contain no provisions on no accident allowance, work allowance, food allowance, housing allowance, perfect attendance allowance or family allowance.

While the appellee had received a commuting allowance of 3,000 yen per month until December 2013, contract employees began to receive commuting allowance according to the same standards as regular employees from January 2014, so there were no longer any differences in the amount of commuting allowance between contract and regular employees.

(5) As described above, the appellee, who is a contract employee, has been treated differently from regular employees in that the appellee does not receive a no accident allowance, work allowance, food allowance, housing allowance, perfect attendance allowance or family allowance, and that the appellee receives no bonuses and no severance allowance and gets no regular salary increases in principle. In addition, until December 2013 there was a difference in that the amount of commuting allowance paid to the appellee was 2,000 yen less than the corresponding amount paid to a regular employee whose means of transportation and commuting distance were the same as the appellee’s.

(6) At the Hikone Branch where the appellee works, there are no differences in the content of the duties of a truck driver between contract and regular employees, nor are there any circumstances which would suggest that there is a difference in the extent of responsibility accompanying the said duties between contract and regular employees.

The Rules of Employment for Regular Employees contain provisions to the effect that the appellant may order changes in employees’ work locations if necessary for its business, which means that regular employees may be transferred to distant places all over the country, including secondment to other companies. In contrast, the Rules of Employment for Contract Employees contain no provisions on changes in work locations or on secondment, which means that contract employees are expected to face no changes in work locations and no secondment. Similarly, a job rank system has been established for regular employees for the purpose of properly treating and assigning employees and contributing to the development of competency and to the development and utilization of human resources by providing training, in each case through assigning to employees job ranks that are commensurate with their fairly evaluated job performance skills, while no such system has been established for contract employees.

II. Reasons for the petition for acceptance of incidental appeal (excluding those that have been excluded) filed by the counsels for the incidental appeal, NAKAJIMA Mitsunori and others

1. Based on the facts related to the case described above, the court of prior instance ruled as follows in summary, concluding that all of the Confirmation Claim and the Wage Differences Claim, as well as the portions of the Damages Claim that are related to housing allowance and perfect attendance allowance, should be dismissed.

(1) Even assuming that the differences in Wages, Etc. between the appellee, who is a contract employee, and regular employees violate Article 20 of the Labor Contracts Act, the relevant labor conditions for the appellee are not to be adjusted to be identical to the corresponding labor conditions for regular employees, so the Confirmation Claim and the Wage Differences Claim are both groundless.

(2) The differences in housing allowance and perfect attendance allowance between the appellee and regular employees do not constitute differences that are “found unreasonable,” so these differences do not violate Article 20 of the Labor Contracts Act.

2. However, while the court of prior instance’s ruling described in 1 (1) above and, of the ruling described in 1 (2) above, the portion related to the housing allowance, are acceptable, the portion of the ruling described in 1 (2) above that is related to the perfect attendance allowance is not acceptable, for the following reasons:

(1) Article 20 of the Labor Contracts Act provides that if a labor condition for a worker who has executed a fixed-term labor contract (hereinafter referred to as a “fixed-term worker”) is different from the corresponding labor condition for another worker who has executed an indefinite-term labor contract with the same employer due to the existence of a fixed term, the difference in the labor condition is not to be found unreasonable, considering the content of the duties and the extent of responsibility accompanying the said duties (hereinafter referred to as the “content of duties”), the extent of changes in the content of duties and in work locations, and other circumstances. The said article prohibits unreasonable labor conditions from being imposed on fixed-term workers on the basis of the existence of a fixed term, in order to ensure the fair treatment of fixed-term workers. This is in light of the fact that it tends to be harder for fixed-term workers than for workers who have executed an indefinite-term labor contract (hereinafter referred to as “indefinite-term workers”) to get reasonable labor conditions and that the disparities in labor conditions between fixed-term and indefinite-term workers have been an issue.

Based on an assumption that there may be differences in labor conditions between fixed-term workers and indefinite-term workers, the said article prohibits any such differences that are found unreasonable, considering the content of duties, the extent of changes in the content of duties and in work locations, and other circumstances (hereinafter referred to as the “content of duties, etc.”). We thus consider that the said article requires balanced treatment of fixed-term workers and indefinite-term workers according to differences in the content of duties, etc. between them.

(2) The Confirmation Claim and the Wage Differences Claim

a. The Confirmation Claim and the Wage Differences Claim are based on an interpretation that if differences in labor conditions between fixed-term workers and indefinite-term workers violate Article 20 of the Labor Contracts Act, the relevant labor conditions for fixed-term workers should be adjusted to be identical to the corresponding labor conditions for indefinite-term workers.

b. In light of the fact that Article 20 of the Labor Contracts Act provides that differences in labor conditions between fixed-term workers and indefinite-term workers are “not to be found unreasonable,” and that the said article is intended to ensure the fair treatment of fixed-term workers, it is reasonable to consider that the provisions of the said article have the force of private law, and that, accordingly, the portions of a fixed-term labor contract providing for differences in labor conditions which violate the said article are made null and void.

Nonetheless, the said article only requires balanced treatment of fixed-term workers according to the differences in the content of duties, etc. between fixed-term workers and indefinite-term workers, and its provisions do not require that if differences in labor conditions between the two types of workers violate the said article, the relevant labor conditions for fixed-term workers be adjusted to be identical to the corresponding labor conditions for indefinite-term workers.

It is then reasonable to consider that even if differences in labor conditions between fixed-term workers and indefinite-term workers violate the said article, the relevant labor conditions for fixed-term workers are not to be adjusted by the force of the said article to be identical to the corresponding labor conditions for indefinite-term workers.

In addition, in light of, among others, the fact that, at the appellant, the Rules of Employment for Regular Employees and the Salary Regulations for Regular Employees, both of which are rules of employment applicable to regular employees, on the one hand, and the Rules of Employment for Contract Employees, which are rules of employment applicable to contract employees, on the other hand, have been established separately and independently from each other, it is difficult to interpret, as a reasonable interpretation of these rules of employment, that if differences in labor conditions between the two types of employees violate the said article, the relevant provisions of the Rules of Employment for Regular Employees or the Salary Regulations for Regular Employees apply to the appellee who is a contract employee.

c. Based on the above, even assuming that the differences in Wages, Etc. violate Article 20 of the Labor Contracts Act, the labor conditions related to Wages, Etc. for the appellee are not to be adjusted to be identical to the corresponding labor conditions for regular employees. Therefore, the Confirmation Claim, through which the appellee seeks a confirmation that the appellee is in a position which grants the appellee the same rights as the regular employees in terms of the Wages, Etc., is groundless. Similarly, the Wage Differences Claim, which is based on an assumption that the appellee is in such a position, is also groundless.

(3) Damage Claim

a. Since Article 20 of the Labor Contracts Act is based on an assumption that there are differences in labor conditions between fixed-term workers and indefinite-term workers due to the existence of a fixed term, the said article does apply merely because there are differences in labor conditions between the two types of workers. On the other hand, it should be sufficient to take into account the degree of connection between the existence of a fixed term and differences in labor conditions, when determining whether or not the differences in labor conditions are found unreasonable.

It is then reasonable to consider that the phrase “due to the existence of a fixed term” in the said article means that the differences in labor conditions between fixed-term workers and indefinite-term workers have arisen in connection with the existence or non-existence of a fixed term.

Let us apply the above discussion to this case. Considering that the differences in labor conditions related to Wages, Etc. have arisen from the fact that contract employees and regular employees are subject to different rules of employment from each other, it is fair to say that these differences have arisen in connection with the existence or non-existence of a fixed term. Therefore, we can say that in this case, the differences in labor conditions related to Wages, Etc. between contract employees and regular employees have arisen from the existence of a fixed term as referred to in the said article.

b. Next, while Article 20 of the Labor Contracts Act provides that differences in labor conditions between fixed-term workers and indefinite-term workers must not be found unreasonable considering the content of duties, etc., the incidental appellant argues that the phrase “found unreasonable” in the said article should be interpreted as the same as not reasonable. However, considering that the said article provides that differences in labor conditions are “not to be found unreasonable,” it would be faithful to its wording to interpret that the said article only questions whether or not differences in labor conditions are considered unreasonable. In addition, while the said article requires that, even if there are differences in the content of duties, etc. between the two types of workers, their respective labor conditions be balanced by taking such differences into account, it is difficult to deny that when determining whether or not the labor conditions for the two types of workers are balanced, one should respect, in some way, negotiations between labor and management as well as the employer’s business judgments.

Therefore, it is reasonable to understand that the phrase “found unreasonable” in the said article means that differences in labor conditions between fixed-term workers and indefinite-term workers are considered unreasonable.

Since determining whether or not differences in labor conditions between the two types of workers are unreasonable involves a normative consideration, we consider that the burden of establishing facts supporting a determination that such differences are unreasonable lies with the party which alleges that such differences violate the said article, while the burden of establishing facts preventing a determination that such differences are unreasonable lies with the party which disputes the allegation that such differences violate the said article.

c. Based on the discussion described in b. above, we will consider whether or not the differences in housing allowance and perfect attendance allowance out of the Allowances are found to be unreasonable considering the content of duties, etc.

(a) In this case, it is disputed whether or not the differences in labor conditions between the appellee, who is a contract employee, and regular employees, who work as truck drivers at the appellant’s Hikone Branch as is the case with the appellee, violate Article 20 of the Labor Contracts Act. In terms of the content of duties, there are no differences between the two types of employees, considering, among others, the facts related to this case described in I. 2 (6) above. In terms of the extent of changes in the content of duties and in work locations, however, differences are found in that while regular employees may be transferred to distant places all over the country, including secondment to other companies, and may be promoted in the future as key personnel who play a central role at the appellant under the job rank system which assigns to regular employees job ranks that are commensurate with their job performance skills, contract employees are expected to face no changes in work locations and no secondment and to receive no promotion as such key employees in the future.

(b) At the appellant, only regular employees are to receive the prescribed housing allowance. This housing allowance is considered to be paid with the intention of helping employees with the costs incurred in their housing. While contract employees are not expected to face changes in their place of work, regular employees are expected to face changes in work locations involving changes of residence, which may impose higher housing expenses on regular employees than contract employees may incur.

Therefore, the difference in labor conditions where the aforementioned housing allowance is paid to regular employees but not to contract employees cannot be considered unreasonable, and it is appropriate to consider that this does not constitute a difference that is found unreasonable as referred to in Article 20 of the Labor Contracts Act.

(c) At the appellant, only drivers who are regular employees are to receive the prescribed perfect attendance allowance. This perfect attendance allowance is considered to be paid with the intention of encouraging employees’ perfect attendance, since it is necessary to secure a certain number of drivers actually on duty in order for the appellant to carry out its transportation services in a smooth manner. Since there are no differences in the content of duties between contract and regular employees who are drivers of the appellant, no difference should arise in the necessity for securing drivers on duty between the two types of employees based on the content of their duties. In addition, one cannot say that this necessity differs depending on such circumstances as the possibility for a worker to face changes in work locations or to be seconded in the future or to be promoted as a key employee who plays a central role at the appellant. Furthermore, while the Labor Contract and the Rules of Employment for Contract Employees provide that salary increases may be awarded to contract employees based on the appellant’s financial performance and the employees’ on-the-job performance, no such salary increases will in principle be awarded under these rules, and no cases seem to have existed where a salary increase was awarded to a contract employee by taking into his/her perfect attendance into account.

Therefore, the difference in labor conditions where the aforementioned perfect attendance allowance is paid to the appellant’s drivers who are regular employees but not to those who are contract employees is considered unreasonable, and it is reasonable to consider that this constitute a difference that is found unreasonable as referred to in Article 20 of the Labor Contracts Act.

(4) Based on the above, the court of prior instance’s ruling that all of the Confirmation Claims and the Wage Differences Claims, as well as the portions of the Damages Claim that are related to housing allowance, should be dismissed is acceptable as justifiable. The incidental appellant’s arguments against these points are unacceptable.

On the other hand, the court of prior instance’s ruling that, of the Damage Claim, the portion related to the perfect attendance allowance for the period on and after April 1, 2013 to which Article 20 of the Labor Contracts Act applies should be dismissed, has illegality which obviously affects the judgment. The incidental appellant’s arguments on this point are well-grounded, and the portion of the judgment in prior instance which is related to the aforementioned ruling should inevitably quashed.

As for the portions of the incidental appeal on the remaining claims, the Court dismisses them since the corresponding reasons for the petition for acceptance of incidental appeal have been excluded in the decision to accept the incidental appeal.

III. Reasons for the petition for acceptance of final appeal (excluding those that have been excluded) filed by the counsels for the appeal, UENO Masaru and others

1. Based on the facts related to the case described in I. 2 above, the court of prior instance ruled that the differences between contract employees and regular employees in no accident allowance, work allowance, food allowance and commuting allowance (hereinafter referred to as the “No Accident Allowance, Etc.”) have arisen from the existence of a fixed term and also constitute those that are found unreasonable, and that, therefore, the appellant’s provision of these differences on and after April 1, 2013 (the date from which Article 20 of the Labor Contracts Act applies) constitutes a tort, based on which part of the Damage Claim should be accepted.

2. (1) As described above in II. 2 (3)a, the differences between contract and regular employees in the labor conditions related to the Allowances are considered to have arisen from the existence of a fixed term as referred to in Article 20 of the Labor Contracts Act. Therefore, whether or not the differences between the two types of employees in the No Accident Allowances, Etc. out of the Allowances violate the said act depends on whether or not these differences are found unreasonable as referred to in the said article.

(2) a. At the appellant, only drivers who are regular employees are to receive the prescribed no accident allowance. This no accident allowance is considered to be paid with the intention of winning customers’ trust through improving the quality of drivers and through safe transportation. Since there are no differences in the content of duties between contract and regular employees who are drivers of the appellant, no difference should arise in the necessity for safe driving and accident prevention between the two types of employees based on the content of their duties. In addition, this necessity does not differ depending on such circumstances as the possibility for a worker to face changes in work locations or to be seconded in the future or to be promoted as a key employee who plays a central role at the appellant. Furthermore, no other circumstances seem to exist that would prevent us from considering that providing the difference in no accident allowance is unreasonable.

Therefore, the difference in labor conditions where the aforementioned no accident allowance is paid to the appellant’s drivers who are regular employees but not to those who are contract employees is considered unreasonable, and it is thus reasonable to consider that this constitute a difference that is “found unreasonable” as referred to in Article 20 of the Labor Contracts Act.

b. While the Salary Regulations for Regular Employees provide that regular employees who are engaged in special services will receive a work allowance between 10,000 yen and 20,000 yen per month, these regulations do not specifically provide for the content of special services for which such work allowance will be paid. We consider that this means that such content of special services is left to the discretion of each office. At the Hikone Branch where the appellee works, a work allowance of 10,000 yen per month is paid uniformly to all regular employees.

We consider that the aforementioned work allowance is paid in consideration of the performance of certain services and is, as such, a type of wage which is paid by evaluating the services per se in terms of money. However, there are no differences in the content of duties between the appellant’s drivers who are contract employees and those who are regular employees. In addition, the differences in the extent of changes in the content of duties and in work locations do not result in differences in the monetary evaluation of services performed. Furthermore, no other circumstances seem to exist that would prevent us from considering that providing the difference in work allowance is unreasonable.

Therefore, the difference in labor conditions where the aforementioned work allowance is paid uniformly to the appellant’s drivers who are regular employees but not to those who are contract employees is considered unreasonable, and it is thus reasonable to consider that this constitute a difference that is found unreasonable as referred to in Article 20 of the Labor Contracts Act.

c. At the appellant, only drivers who are regular employees are to receive the prescribed food allowance. Since this food allowance is paid to help employees with their meals, paying it to workers who need to have a meal while on duty fits its purpose. However, there are no differences in the content of duties between the appellant’s drivers who are contract employees and those who are regular employees, nor do any circumstances seem to exist which would suggest any difference in working arrangements between the two types of employees. In addition, the differences in the extent of changes in the content of duties and in work locations have no relation to the necessity of having a meal while on duty or to the degree of such necessity. Furthermore, no other circumstances seem to exist that would prevent us from considering that providing the difference in food allowance is unreasonable.

Therefore, the difference in labor conditions where the aforementioned food allowance is paid to the appellant’s drivers who are regular employees but not to those who are contract employees is considered unreasonable, and it is thus reasonable to consider that this constitute a difference that is found unreasonable as referred to in Article 20 of the Labor Contracts Act.

d. Until December 2013, while the appellant had paid a commuting allowance of 3,000 yen per month to the appellee who was a contract employee, regular employees whose means of transportation and commuting distance were the same as the appellee’s were to receive a commuting allowance of 5,000 yen per month. This commuting allowance is paid with the intention of compensating for travel expenses incurred in commuting, and whether or not a labor contract provides for a fixed term does not result in any difference in the amount of expenses incurred in commuting. In addition, the differences in the extent of changes in the content of duties and in work locations have no direct relation to the amount of expenses incurred in commuting. Furthermore, no other circumstances seem to exist that would prevent us from considering that providing the difference in commuting allowance is unreasonable.

Therefore, the difference in labor conditions where the amount of the aforementioned commuting allowance is different between regular employees and the appellee who is a contract employee is considered unreasonable, and it is thus reasonable to consider that this constitute a difference that is found unreasonable as referred to in Article 20 of the Labor Contracts Act.

(3) Based on the discussion described in (1) and (2) above, the differences in the No Accident Allowance, Etc. are all considered to violate Article 20 of the Labor Contracts Act. In this regard, the appellant argues that no tort should be considered to have been committed since the said article is an advisory provision with no force of private law. However, the said article should be considered to have the force of private law, as described in II. 2 (2)b above.

(4) Based on the above, the court of prior instance’s ruling that the Damage Claim should be accepted to the extent that the appellee seeks payment of the amounts of differences in the No Accident Allowance, Etc. arising on and after April 1, 2013 (the date from which Article 20 of the Labor Contracts Act applies), on the grounds that the appellant’s provision of the differences in the No Accident Allowance, Etc. on and after the said date constitutes a tort, is acceptable as justifiable. The appellant’s arguments are unacceptable.

IV. Conclusion

For the reasons described above, the Court quashes the portion of the judgment in prior instance related to the appellee’s claim for damages for the lost perfect attendance allowance for the period on and after April 1, 2013, remands this case to the court of prior instance in order to further and fully hear the case as to, among other things, whether or not the appellee meets the requirements for receiving perfect attendance allowance, and dismisses the appellant’s final appeal and the remaining portions of the appellee’s incidental appeal.

Accordingly, the Court unanimously decides as set forth in the main text.

Justice YAMAMOTO Tsuneyuki

Justice ONIMARU Kaoru

Justice KANNO Hiroyuki

Justice MIURA Mamoru