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The first “derivative suit” filed in the country to call to account for death from overwork

2016年12月13日 21時39分40秒 | 労働基準法関連

On-site Inspection for 80 Hours Overtime Work

As announced in April 2016 newsletter. the government strengthens its administrative direction to halt  heavy overwork to the companies. It will reduce the standard number of overtime hours for on-site inspection from 100 hours per month to 80 hours per month. The government will also take measures such as recommendations if there is a violation of the law.

 

The first “derivative suit” filed in the country to call to account for death from overwork

An employee at Dentsu Inc. died from overwork and the case was heavily featured by the media a few days ago. The case mentioned here is the death of a bank employee who had leaped to his death due to depression resulting from overwork. The wife of the deceased employee filed a lawsuit against the bank and the district court at Kumamoto ruled that the bank has been overly negligent in their duty of care. The court subsequently ordered the bank to pay a sum of 128.68 million yen in settlement of the case (October 2014). The Labor Standard Inspection Office has confirmed that the deceased employee had worked 207 hours of overtime just before the onset of his depression.

 

Subsequently in September this year, the wife of the deceased employee filed a derivative suit in her capacity as a shareholder against 11 of the bank’s executives. She demanded for a compensation of approximately 264 million yen for the damages that she had suffered due to the oversight of the bank in establishing a structure to prevent death from overwork.

 

Responsibilities of executives that were questioned in the derivative suit


A company’s executives have the obligation to be faithful to the company (Article 355 of the Companies Act) and any non-compliance is considered a negligence in duties (Article 423 of the Companies Act). In derivative suits, the examination is usually on the responsibility of the executives in causing the company to suffer losses due to negligence in their duties. However, this is the first derivative suit in which the executives of a company are being questioned on their responsibilities in causing the death or suicide of an employee from overwork as a result of their negligence.

 

Consecutive cases of executives accepting personal responsibilities in the death or suicide of employees from overwork

 

A well-known case in regard to the above is the judicial decision made by the Osaka High Court on the Daisho incident (Nihonkai Shoya) which took place in May 2011. The provisions of the Companies Act, Article 429 stipulate that executives are liable for the damages caused to third parties, and it was made clear in the trial for this incident that the provisions are also applicable to cases of death or suicide from overwork. In the lawsuit for the Watami incident in which an employee committed suicide due to overwork, according to the plaintiff, the founder of the company should be held most liable for the damages in the terms of settlement. The court-mediated settlement for the incident took place in December 2015. This could be an indication that the oversight of business operators in the long working hours of employees will become the target in such intense pursuits of responsibility.

 

It may be time to consider reforming the way of working at your company

 

In a survey conducted by NTT DATA INSTITUTE OF MANAGEMENT CONSULTING, Inc., the percentage of companies who have made efforts to regulate the number of working hours of their employees has increased from 22.2% in 2015 to 32.1% in 2016. There are many business operators who are already taking action to rectify the problem of long working hours. Small to medium enterprises that put in efforts to reduce extra working hours and to encourage their employees to utilize their paid leave may be eligible for the “Workplace Awareness Improvement Grant” offered by the Ministry of Health, Labour and Welfare. It may be time to consider making good use of the grant for your company.

 

MASHR Consulting is providing consulting with regard to the management of working hours and creating internal system. Please feel free to contact us.

 


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