In Japan, a probation period refers to a defined period during which an employer evaluates a new employee’s suitability for the role. If the employee is deemed unfit during this period, the employer may terminate the employment at its conclusion, or in some cases, during the period. A typical clause in a Japanese company’s Rules of Employment may state that “the employer may refuse to fully employee a probationary employee if, based on a review of work during the probationary period, the employee is found unfit as employee.”

Probation periods are particularly important for permanent hires in Japan, as the dismissal of permanent employees is strictly limited under Japanese labor law (see our related column: Regulation on Dismissal of Permanent Employees in Japan). However, Japanese courts also apply scrutiny to terminations made during or at the end of a probation period. Although such terminations are generally reviewed more leniently than ordinary dismissals, they are still considered a form of dismissal and must meet certain legal standards.

This column provides international businesses operating in Japan with a concise overview of how probation periods are treated under Japanese labor law.

1. Duration of the Probation Period

The typical probation period in Japan lasts between three and six months. While there is no statutory maximum, an excessively long probationary period—such as one extending beyond one year—may be deemed invalid.

Probation periods may be extended if the Rules of Employment (and employment contract) expressly allow for it, provided the extension does not result in an unreasonably long total period.

2. Court Precedents on Denial of Employment

Employers are granted broader discretion to terminate employment during or at the end of the probation period compared with the dismissal of regular employees. This reflects the underlying purpose of probation—to assess the employee’s suitability for the role after joining.

A landmark Supreme Court case (decision dated December 12, 1973) addressed the legal standard for such dismissals. According to the supreme court decision, if the employer discovers facts—unknown and not reasonably discoverable prior to hiring—through post-hiring investigation or job performance during the probation period, and it is objectively reasonable to deem continued employment inappropriate based on those facts and in light of the purpose of reserving the right to terminate, the employer may lawfully exercise its right to terminate the probationary employment.

Can an employer terminate employment during the probation period, rather than at the end? It is possible, but courts review such mid-period dismissals more strictly. This is because the employee may reasonably be expected to improve during the remainder of the probation period in response to instruction and feedback.

Below are illustrative court cases:

(i) Tokyo District Court Decision, August 31, 2009 – Dismissal Upheld

A mid-career hire was employed by an insurance company as a staff in charge of outsourced contractors management. The employment contract provided for a six-month probation period, extendable up to nine months. The employee was dismissed after five months—before the probation period had ended.

The employee had omitted her most recent employment history from her résumé and falsely claimed to have been freelancing during that time. In fact, she had been employed but was terminated after a few weeks, and litigation with her prior employer was ongoing. The court found she intentionally concealed this information, likely to avoid disclosure of the pending litigation.

Additionally, the employee had engaged in unauthorized side jobs and demonstrated a poor work attitude. Although the employee argued the employer should have taken steps to correct her behavior, the court held that the employer’s loss of trust—due to the false résumé and misrepresentations—could not be remedied through corrective measures. The dismissal was upheld.

(ii) Tokyo District Court Decision, January 28, 2015 – Dismissal Invalidated

A mid-career hire was employed by a civil engineering firm with a three-month probation period. The employee’s role was to prepare engineering drawings. At the end of the probation period, the employer terminated the employment, citing poor skills and inadequate performance.

The court found that although the employee’s initial drawings were problematic, they had improved through employer instruction. It held that the employee possessed the required skills and had responded to guidance. Other claims—such as project delays and poor attitude—were either unproven or not serious enough to justify dismissal. The termination was found invalid.

(iii) Tokyo District Court Decision, February 25, 2019 – Dismissal Upheld

An employee was hired mid-career by a financial institution for a regulatory operations role involving the preparation of reports for submission to authorities. The contract included a three-month probation period. At the end of this period, the employer terminated the employee.

The court found that the employee repeatedly made material mistakes almost every day, and despite repeated instructions and support from the employer, showed minimal improvement. In light of the employee’s consistent underperformance and the nature of the role, the court upheld the dismissal.

Disclaimer: This column intends to provide a high-level summary of the subject matter, and it does not aim to provide exhaustive information. Also, this column is for informational purposes only and does not constitute legal advice. For specific issues, we recommend consulting an expert. If you have any query, please contact us via inquiry form in this homepage.