2018/06/20(Sender: FC Owners Operations Office)
When operating a franchise, in most cases you will employ employees (full-time employees, contract employees, part-time employees, and temporary workers) as a company or sole proprietor. If you employ even one employee, even if they are a temporary worker, an employment contract is established between you and the employee, and labor laws such as the Labor Standards Act will apply.
In recent years, due to the rise in worker awareness and other social conditions, labor disputes between workers and employers have been occurring frequently, so caution is necessary.
This time, let's look at the points to be careful about when employing employees in franchise operations.
A typical example of labor troubles common in franchises is when employees are sued for unpaid overtime due to long working hours.Many restaurants and convenience stores are open 24 hours a day, and when a new store opens, the workload is often excessive, resulting in long working hours for employees.
In such cases, if overtime pay (premium wages) is not paid to the employee, the franchisee may be required to pay a lump sum of overtime pay retroactively (often for two years).
The next most common labor trouble is when an employee challenges the validity of their dismissal or refusal to renew their contract.
In franchise operations, it is common to employ part-time or temporary workers. If the contract period is not specified, or if the contract period is specified but has been renewed multiple times and extends over a long period, dismissing the employee or refusing to renew the contract must meet the strict requirements stipulated in labor laws. When the validity of such dismissal or refusal to renew is contested, not only can the dispute become protracted, but if it is deemed invalid, the employer may be ordered to reinstate the employee and pay wages for the period up to that point, which can cause considerable damage to the employer.
While employment contracts between employers and employees can be established verbally, the law obligates employers to clearly state the working conditions to their employees.
Employers are obligated to provide written documentation of the following five points.
Furthermore, in order to conclude a "fixed-term employment contract" with a specified contract period, in addition to the above, it is also necessary to specify "whether or not the contract will be renewed" and "if there is renewal, the criteria for deciding on renewal." Furthermore, when employing part-time workers, employers are required to clearly state whether or not there will be bonuses, severance pay, and raises.
The document that employers are obligated to issue when hiring employees is called a "Notice of Employment Conditions." However, if an "Employment Contract" is created between the employer and employee, and all the contents that should be included in the "Notice of Employment Conditions" are included in the contract's clauses, there is no need to issue a separate "Notice of Employment Conditions."
An employment contract can include not only the contents that are required to be clearly stated as notice of employment conditions, but also contents that should be stipulated depending on the type of work (such as the handling of employees' social media accounts and confidentiality).
To prevent future problems, both the employer and employee should sign and seal two copies of the employment contract, and each should keep one copy.
However, labor disputes can occur in franchise operations. If a dispute arises with an employee, do not ignore it and take prompt action.
However, since labor laws, mainly the Labor Standards Act, are basically designed to protect workers, there are many cases where employers rely on their own judgment when dealing with disputes with employees, resulting in incorrect responses.
In particular, in cases where employees claim unpaid overtime wages, ignoring the issue may result in demands for payment of late payment penalties and additional charges (equal to the unpaid amount), and in some cases, may even lead to an investigation by the Labor Standards Inspection Office. When you receive a request from an employee or a certified letter, please take action by consulting with a specialist as soon as possible.
This time, we have looked at points to be careful about when employing employees in franchise operations.
To prevent labor troubles, it is important that both the employer and the employee have a shared understanding of the employment contract. Make sure to exchange written documents, rather than relying on verbal agreements.
Please keep in mind that even minor labor disputes can pose a significant risk to franchise operations.
Help
牧 隆之
lawyer
Born in Kyoto Prefecture in 1973. Graduated from the Faculty of Law, Osaka University. After working in corporate sales for a company after graduating from university, he passed the bar examination. He opened his own practice in September 2008. Currently, his office is located in front of Osaka Station, and he focuses on preventative legal services, mainly contract-related and labor-related matters, as legal counsel for numerous small and medium-sized enterprises throughout the Kansai region.