2025.04.17houmuGeneral Corporate Legal Services
Legal issues associated with retirement and how to handle them
1 Introduction
The resignation of an employee is the termination of the employment contract, and if the procedures and handling associated with resignation are not followed correctly, it may cause legal trouble. In recent years, an increasing number of employees have been using resignation agents for their resignation, and companies should be aware of how to handle such resignations.
This article explains the legal issues involved in employee resignation and appropriate responses to resignation agents.
This article explains the legal issues involved in employee resignation and appropriate responses to resignation agents.
2 Basic Rules for Resignation
1 What is resignation?
Resignation refers to the termination of an employment contract other than “termination of employment” in which a company unilaterally terminates an employment contract.
When an employee wishes to resign, termination of the employment contract by agreement between the company and the employee is called “agreed resignation,” while unilateral termination of the employment contract by the employee is called “resignation.
Other types of resignation include “natural retirement,” in which the employment contract is terminated due to the occurrence of certain events, and “mandatory retirement,” in which the employment contract is terminated when the employee reaches the mandatory retirement age stipulated in the employment regulations.
This paper will discuss resignation and agreed resignation, which are likely to cause legal troubles.
2 Declaration of Intention to Resign
Employees with no fixed term of employment may resign at any time with a two-week notice period (Article 627, Paragraph 1 of the Civil Code).
Since the law does not stipulate the method of communicating the intention to resign, it is possible to resign orally or by e-mail instead of in writing, and such methods are also valid.
However, the declaration of intent to resign has the important effect of terminating the employment contract. Therefore, it is advisable to have the resignation notice signed and sealed by the employee in case there is a dispute over whether or not the employee has declared his/her intention to resign, and it is generally stipulated in the employment regulations.
There are no legal requirements regarding the format or content of the resignation notice, so as long as the resignation notice includes a statement that the employee is resigning, the date of resignation, the date the resignation notice was prepared, and the employee's signature and seal are on the notice, there is no problem.
There may be cases where it is difficult for a company to accept an employee's resignation according to his/her wishes, such as whether or not he/she needs to take over the responsibility. Therefore, it is important to reduce the risk to the business by making the employee's resignation an agreed resignation after carefully discussing with the employee, for example, whether there will be any problem in taking over the duties on the employee's desired date of resignation, at the stage of confirming the employee's intention to resign.
When an employee who is willing to resign submits a resignation letter, the company should immediately issue a notice to the employee stating that the resignation letter has been received and accepted in order to prevent the employee from withdrawing his/her resignation.
The resignation notice is a unilateral declaration of intent to resign, and once the company receives it, the employee may not withdraw it.
3 Whether or not a claim for damages can be made
If an employee unilaterally announces his/her intention to resign and the company suffers damages as a result of his/her resignation, the question arises as to whether or not the company can claim compensation for damages. In this regard, it is considered difficult to claim damages simply because the employee resigned.
On the other hand, resignation does not take effect until two weeks' notice period has elapsed after the resignation is announced. Therefore, if an employee says, “I'm resigning today,” and is absent from work from the following day, it is considered to be an unauthorized absence without a valid reason, and if the company incurs specific damages as a result, a claim for damages may be possible.
4 Things to be confirmed at the time of resignation
(1) Employees who have resigned may suddenly file a claim against a company for unpaid overtime wages. Since April 2020, the statute of limitations for unpaid overtime wages has changed from two years to three years, and may become five years in the future. This means that unpaid overtime wages are likely to become more expensive, so it is important to keep this in mind.
Since claims for unpaid overtime wages can be a major risk for companies, it is important to reaffirm that there are no unpaid overtime wages, etc. for employees who leave the company, and to reach an agreement on the non-existence of these claims and obligations at the time of resignation.
Resignation refers to the termination of an employment contract other than “termination of employment” in which a company unilaterally terminates an employment contract.
When an employee wishes to resign, termination of the employment contract by agreement between the company and the employee is called “agreed resignation,” while unilateral termination of the employment contract by the employee is called “resignation.
Other types of resignation include “natural retirement,” in which the employment contract is terminated due to the occurrence of certain events, and “mandatory retirement,” in which the employment contract is terminated when the employee reaches the mandatory retirement age stipulated in the employment regulations.
This paper will discuss resignation and agreed resignation, which are likely to cause legal troubles.
2 Declaration of Intention to Resign
Employees with no fixed term of employment may resign at any time with a two-week notice period (Article 627, Paragraph 1 of the Civil Code).
Since the law does not stipulate the method of communicating the intention to resign, it is possible to resign orally or by e-mail instead of in writing, and such methods are also valid.
However, the declaration of intent to resign has the important effect of terminating the employment contract. Therefore, it is advisable to have the resignation notice signed and sealed by the employee in case there is a dispute over whether or not the employee has declared his/her intention to resign, and it is generally stipulated in the employment regulations.
There are no legal requirements regarding the format or content of the resignation notice, so as long as the resignation notice includes a statement that the employee is resigning, the date of resignation, the date the resignation notice was prepared, and the employee's signature and seal are on the notice, there is no problem.
There may be cases where it is difficult for a company to accept an employee's resignation according to his/her wishes, such as whether or not he/she needs to take over the responsibility. Therefore, it is important to reduce the risk to the business by making the employee's resignation an agreed resignation after carefully discussing with the employee, for example, whether there will be any problem in taking over the duties on the employee's desired date of resignation, at the stage of confirming the employee's intention to resign.
When an employee who is willing to resign submits a resignation letter, the company should immediately issue a notice to the employee stating that the resignation letter has been received and accepted in order to prevent the employee from withdrawing his/her resignation.
The resignation notice is a unilateral declaration of intent to resign, and once the company receives it, the employee may not withdraw it.
3 Whether or not a claim for damages can be made
If an employee unilaterally announces his/her intention to resign and the company suffers damages as a result of his/her resignation, the question arises as to whether or not the company can claim compensation for damages. In this regard, it is considered difficult to claim damages simply because the employee resigned.
On the other hand, resignation does not take effect until two weeks' notice period has elapsed after the resignation is announced. Therefore, if an employee says, “I'm resigning today,” and is absent from work from the following day, it is considered to be an unauthorized absence without a valid reason, and if the company incurs specific damages as a result, a claim for damages may be possible.
4 Things to be confirmed at the time of resignation
(1) Employees who have resigned may suddenly file a claim against a company for unpaid overtime wages. Since April 2020, the statute of limitations for unpaid overtime wages has changed from two years to three years, and may become five years in the future. This means that unpaid overtime wages are likely to become more expensive, so it is important to keep this in mind.
Since claims for unpaid overtime wages can be a major risk for companies, it is important to reaffirm that there are no unpaid overtime wages, etc. for employees who leave the company, and to reach an agreement on the non-existence of these claims and obligations at the time of resignation.
3 Current Status of Resignation Agents and Its Impact on Businesses
1 As mentioned above, there are no rules on how an employee can inform a company of his/her intention to resign, and in recent years, an increasing number of employees have been using resignation agents to express their resignation.
2 A resignation agent is a business that provides services to handle resignation on behalf of employees without requiring them to go through the resignation procedures themselves.
There is no legal problem if the resignation agent has an attorney attached and the attorney represents the employee in expressing his/her intention to resign or negotiating the terms of resignation.
There is also no problem if the employee is a member of a labor union and a representative of the labor union or a person authorized by the labor union acts as a resignation agent for the union members (Article 6 of the Labor Union Law).
With regard to resignation agents that do not fall under the above cases, depending on the nature of their business, they may be in violation of Article 72 of the Lawyers Act, and the question arises as to whether a company may accept negotiations, etc. concerning the handling of resignations from such agents.
Article 72 of the Lawyers Act prohibits non-lawyers from performing “legal services” as business for the purpose of obtaining remuneration, and a violation of this prohibition is punishable by imprisonment with work for not more than two years or a fine of not more than 3 million yen (Article 77 of the same Act).
It is understood that “legal affairs” under Article 72 of the same law includes not only the handling of matters that cause or change legal effects, but also the handling of matters that preserve and clarify legal effects, such as the act of making a contract on matters that have been finalized, and negotiations regarding the handling of retirement are included in “legal affairs.
3 Therefore, when a company is contacted by a severance agent, it is necessary to respond as follows.
(1) Confirmation of legality
As mentioned in 2 above, it is necessary to confirm that the resignation agent is in a position to legally negotiate with attorneys, labor unions, etc. regarding the handling of resignations.
One way to confirm this is to search the website and check the operating entity. However, since this may be difficult to determine, it is necessary to consult a lawyer or other specialist.
(2) Cases in which the resignation agent is unable to negotiate or perform other legal services
If, as a result of the confirmation, the resignation agent is unable to negotiate or perform other legal work, it will not be able to proceed with negotiations regarding the resignation process, so it is important to inform the employee that no further action will be taken unless he or she contacts you.
(3) Cases in which the resignation is simply communicated
If the resignation agent merely conveys the employee's intention to resign as a “messenger,” it is considered effective as a communication of the employee's intention to resign, not as a negotiation regarding the processing of resignation.
However, even in this case, it is necessary to ask the employee to submit a letter of attorney or a resignation notice written by the employee himself/herself in order to obtain proof that the resignation is based on the employee's true intention.
2 A resignation agent is a business that provides services to handle resignation on behalf of employees without requiring them to go through the resignation procedures themselves.
There is no legal problem if the resignation agent has an attorney attached and the attorney represents the employee in expressing his/her intention to resign or negotiating the terms of resignation.
There is also no problem if the employee is a member of a labor union and a representative of the labor union or a person authorized by the labor union acts as a resignation agent for the union members (Article 6 of the Labor Union Law).
With regard to resignation agents that do not fall under the above cases, depending on the nature of their business, they may be in violation of Article 72 of the Lawyers Act, and the question arises as to whether a company may accept negotiations, etc. concerning the handling of resignations from such agents.
Article 72 of the Lawyers Act prohibits non-lawyers from performing “legal services” as business for the purpose of obtaining remuneration, and a violation of this prohibition is punishable by imprisonment with work for not more than two years or a fine of not more than 3 million yen (Article 77 of the same Act).
It is understood that “legal affairs” under Article 72 of the same law includes not only the handling of matters that cause or change legal effects, but also the handling of matters that preserve and clarify legal effects, such as the act of making a contract on matters that have been finalized, and negotiations regarding the handling of retirement are included in “legal affairs.
3 Therefore, when a company is contacted by a severance agent, it is necessary to respond as follows.
(1) Confirmation of legality
As mentioned in 2 above, it is necessary to confirm that the resignation agent is in a position to legally negotiate with attorneys, labor unions, etc. regarding the handling of resignations.
One way to confirm this is to search the website and check the operating entity. However, since this may be difficult to determine, it is necessary to consult a lawyer or other specialist.
(2) Cases in which the resignation agent is unable to negotiate or perform other legal services
If, as a result of the confirmation, the resignation agent is unable to negotiate or perform other legal work, it will not be able to proceed with negotiations regarding the resignation process, so it is important to inform the employee that no further action will be taken unless he or she contacts you.
(3) Cases in which the resignation is simply communicated
If the resignation agent merely conveys the employee's intention to resign as a “messenger,” it is considered effective as a communication of the employee's intention to resign, not as a negotiation regarding the processing of resignation.
However, even in this case, it is necessary to ask the employee to submit a letter of attorney or a resignation notice written by the employee himself/herself in order to obtain proof that the resignation is based on the employee's true intention.
4 Finally
Legal issues related to resignation are an important risk management subject for companies. To avoid problems when an employee resigns, it is necessary to take measures such as having employment regulations in place in advance. It is also important to keep a calm attitude when an employee announces his/her intention to resign by using a resignation agent.
When an employee resigns, there are a variety of possible responses depending on the case, and companies are often at a loss for policy. If you are at a loss to make a decision, you can avoid problems before they arise by consulting with a specialist as soon as possible. Please contact us if you have any questions about the resignation process.
When an employee resigns, there are a variety of possible responses depending on the case, and companies are often at a loss for policy. If you are at a loss to make a decision, you can avoid problems before they arise by consulting with a specialist as soon as possible. Please contact us if you have any questions about the resignation process.