Work Rules (Shugyo Kisoku) and When They're Required in Japan

Most international companies hiring their first employees in Japan focus on getting the employment contract right. That matters, but it is not the document that ends up governing most day-to-day HR decisions once a Japan team grows past a handful of people. That document is the work rules, known in Japanese as shugyo kisoku (就業規則). Employers who skip it, or treat it as paperwork to backfill later, often find themselves without a clear basis for things as routine as disciplinary action or as consequential as a termination.

What work rules actually are

Shugyo kisoku are a single, company-wide rulebook that sets out the terms and conditions of employment that apply to all employees at a workplace: working hours, breaks, holidays, leave, wage calculation rules, disciplinary grounds and procedures, retirement age, and the circumstances under which someone can be dismissed. They sit above individual employment contracts in practice, because they are the document courts and labor authorities look to when a dispute turns on "what are the rules here," rather than what was negotiated in one person's offer letter.

This is a different model from many Western jurisdictions, where an employee handbook is a useful but often non-binding internal document, and the legally operative terms live mostly in the individual contract. In Japan, once work rules are properly established and communicated to employees, they effectively become binding terms of employment for everyone they cover, and they generally cannot be unilaterally worsened to an individual employee's disadvantage without going through specific legal procedures.

When the law requires them

Under Japan's Labor Standards Act, an employer that regularly employs 10 or more workers at a single workplace is legally required to draft work rules and file them with the local Labor Standards Inspection Office. The count typically includes part-time and contract staff at that location, not only full-time employees, so a small office with a mix of employment types can cross the threshold faster than expected.

Below that threshold, work rules are not legally mandatory, but many international companies choose to put a basic version in place anyway once they have made even two or three Japan hires. The reason is practical rather than legal: without work rules, there is no clearly documented, company-wide basis for disciplinary action, probation handling, or leave policies, which makes it harder to act consistently and defensibly if a problem arises.

Why this matters more than it sounds

Japan's employment protection framework makes it genuinely difficult to dismiss an employee without a well-documented, procedurally sound basis, and the work rules are usually the first thing examined when that basis is challenged. If a company wants to discipline or dismiss someone for conduct or performance reasons, the ability to do so credibly depends heavily on whether the work rules clearly define the relevant grounds and procedure in advance, and whether the company actually followed its own stated process. Trying to rely on general principles or a verbal understanding, after the fact, is a weak position.

The same logic applies to less dramatic situations: probation extensions, handling of unused paid leave, overtime calculation, and remote work eligibility all function much more smoothly when there is a written policy that was in place before the situation arose, rather than a decision made in the moment and explained afterward.

What typically goes into work rules

A standard set of work rules in Japan covers:

• Working hours, breaks, and rest days, including any flexible or variable working hour arrangements
• Wage rules, including how base pay, overtime, and allowances are calculated (this is often split into a separate wage regulation document that is incorporated by reference)
• Paid leave entitlements and the procedure for requesting leave
• Rules on absence, lateness, and leaves of absence for illness or other reasons
• Retirement age and mandatory retirement procedures, where applicable
• Grounds and procedure for disciplinary action, ranging from warnings to dismissal
• Grounds and procedure for dismissal more broadly, separate from disciplinary dismissal
• Confidentiality, conduct, and workplace harassment policies
• Any rules specific to the company, such as expense policies or remote work eligibility

Employers do not have complete freedom in drafting these terms. Certain protections under the Labor Standards Act and related labor laws set a floor that work rules cannot go below, and provisions that violate statutory minimums are generally unenforceable even if written into the document.

The process, briefly

Drafting work rules is not simply an internal exercise. The law requires the employer to hear the opinion of either a labor union representing a majority of employees at the workplace, or, where there is no such union, a representative selected by the employees, before filing. That opinion does not need to be favorable, and the employer is not bound by it, but the step itself is mandatory and the representative's written opinion is typically submitted alongside the filing.

Once drafted, the work rules must be filed with the local Labor Standards Inspection Office and made known to employees, commonly by posting them in the workplace, distributing them, or making them available on an internal system. Work rules that are filed but never actually communicated to employees are vulnerable to challenge on the basis that they were never properly put into effect.

Because the content interacts closely with Japanese labor law in ways that are easy to get wrong from outside the system, most international companies draft work rules together with a Japan-qualified labor and social security attorney (sharoushi) or an employment lawyer, rather than adapting a global handbook template. A global template written for a different legal system can end up containing provisions that are either unenforceable in Japan or, in some cases, in direct conflict with mandatory local protections.

A practical starting point

For a company making its first one or two Japan hires, work rules are often not yet a legal requirement, but it is worth starting with a simple version covering working hours, leave, and basic conduct and disciplinary provisions, built with local legal input, rather than waiting until headcount forces the issue. Trying to retrofit work rules after a dispute has already started is a much weaker position than having them in place, communicated, and followed from early on.

As with the other legal and HR topics covered in these guides, treat this as a starting orientation rather than a substitute for advice from a qualified Japan labor attorney or sharoushi, particularly once the team grows past the 10-employee filing threshold or a difficult personnel situation comes up.