Berlitz Teacher Wins Court Case Against Japan Pension Service

Jun 23, 2016



In 1980 (and to paraphrase), the Japanese Pension Service (JPS) wrote an internal memo that basically said that, due to limited resources and logistics, the JPS should only actively pursue legal enforcement of Shakai Hoken law in cases where an employee was clearly working above “three-quarters of a full-time working week”.

When this memo got out into the business world, countless dishonest businessmen across Japan rubbed their hands together in glee at the prospect of how they could twist it for their own unscrupulous ends.

Their logic went like this: Shakai Hoken (社会保険 – Employees’ Health and Pension Insurance / EHPI) was expensive, and having to match an employee’s contribution to the system was taking money out of their (proverbial) pockets.

For example, if an employee had to pay ¥35,000 a month into the Shakai Hoken system, then their company also had to pay ¥35,000. This only multiplied by every employee that a company had, and this made crooked businessmen everywhere very sad.

What if (ALT dispatch companies wondered) they could somehow use this JPS memo to STOP having to pay Shakai Hoken contributions? On one hand, they would deprive their employees of the health and pension services that they were legally entitled to; but on the other hand… money is money!

So, here’s what they did: if the JPS was only going to strictly enforce the law if an employee was working more than “three-quarters of a full-time working week”, they decided to use a bit of math to allow them to break the law without getting in trouble for it.

Using the principle of “it’s only a crime if you get caught”, companies decided that a “full-time working week” was 40 hours; therefore, “three-quarters” of that would be 30 hours.

So, if an employee worked LESS THAN 30 hours a week (for example: 29.5 hours a week)they could make the claim that that employee didn’t meet the “Shakai Hoken Threshold” for enrolment, and that there was “nothing that [the company] could do” because “the law is the law” and it was out of their hands.

Suddenly, instead of having to spend ¥35,000 per month per employee on Shakai Hoken contributions, companies could just kick their employees off of the system and keep that money for themselves!



This story should be instantly family to anyone who has worked for a dispatch company like Interac, or an English conversation school like Berlitz. This kinds of companies fully embraced the “29.5 Hour Rule” lie and have helped to perpetuate it to such an extent that most foreigners actually believe that it is a real law and that their company is telling them a truth.

In fact, this is a lie that has been spread so aggressively that many Japanese people even believe that it’s true.

It’s one of the biggest scams around, and companies continue to get away with it (at the expense of the people who work for them) mostly because the Japanese Pension Service (and, again, the Japanese Government as a whole) has such an apathetic attitude towards enforcing its own laws and plugging a hole that is doing serious harm to both the employees who are exploited by this practice, and the Shakai Hoken system itself which is not getting the funding that it was supposed to be getting through these laws.



Think of it like this:

Imagine that a road has a speed-limit of 50kph.

In this metaphor, the Japanese Pension Service are the police who have been tasked with making sure that people who drive along this road aren’t breaking the law by going faster than the speed limit that they set.

However, this proverbial road is very busy, and the police only have two officers and two motorbikes available to actually make sure the law is being enforced.

So, even though the speed-limit is clearly stated to be 50kph, many people are going faster than that.

What can the police do this problem, though?

Well, instead of going after anyone who is doing 60kph or 70kph down this 50kph-only road, they decide that they’ll ONLY chase after people who are going more than 80kph.

Companies like Interac and Berlitz are careful to remain in this “50kph-80kph” zone in which they know that the police won’t try to arrest them – and it works.

Companies break the law, the Japanese Pension Service doesn’t go after them, the government doesn’t tighten the laws, and everyone loses.

(Well, everyone except the criminals. They’re having a great time.)



It is this refusal to enforce the law which allowed Berlitz to drop an employee’s hours to “below the threshold”, kick him off Shakai Hoken, and pocket the money for themselves; it is this refusal to enforce the law which formed the basis of why the General Union took the negligent government to court to make them accept that they are as guilty as the companies who are breaking the law; and it is this refusal to enforce the law that granted the General Union a “David vs Goliath” moment in court.

In case you missed it, the General Union took the Japanese Government (via the Japan Pension Service) and Interac (by proxy) to court over the latter failing to enrol one of our members into the Shakai Hoken system, and the former failing to enforce its own rules against companies (such as Interac) to ensure that they follow the law.

Unlike the Berlitz case mentioned above, our union member took issue with the “29.5 Hour Rule” and argued that – regardless of Interac’s wishful thinking – he worked far more than “30 Hours per week” and should have been enrolled in Shakai Hoken by the company.

IF the “30 Hours Threshold” was (as claimed by Interac) “the law”, then the verdict should have been clear-cut from the start.

However, the General Union argued that the “30 Hour Threshold” was, as explained above, a complete and utter lie that had no legal basis at all; it argued that ALL employees, regardless of how many hours they worked, should be enroled in Shakai Hoken AS PER THE LAW.

Naturally, both Interac and the Japanese Pension Service attempted to worm they way out of any responsibility… but justice prevailed, and the General Union’s long-held beliefs were finally validated in court.



You can read the original article on this ruling here (“GU Court Victory Against Gov’t Over Insurance To Have Major Impact“), but the essence of our hard-won victory is that the General Union successfully (and legally) proved that the Japan Pension Service (and, by extension, the Japanese Government) was, and still remains, negligent in its complete failure to enforce Shakai Hoken enrolment laws.

By extension, we proved that the Japanese Pension Service is both an accomplice in, and an enabler of, the continued exploitation of both foreign and Japanese employees by various unscrupulous companies.

The full documentation of that landmark ruling (given on March 20th, 2015) can be read via the above article, or directly by following the link to the PDF here (“Ruling on Withdrawal of Refusal of Enrolment in Social Insurance“).

While you might not have heard about this ruling before (the media did not cover it as much as they perhaps should have), it has since lead to cases (such as the aformentioned one brought against Berlitz by its former employee) being given the time of day in court, and has just as equally paved the way for the decisions in such cases to be ruled in favor of the exploited party, rather than the exploiting company.

Little by little, the momentum from the General Union’s victory over the Japan Pension Service (and over the lies that allow companies in Japan to flaunt Shakai Hoken laws) is starting to grow, and it is our sincere hope that the momentum will continue to grow until neither the Japanese Government nor the Japanese population can ignore these egregious excuses and flagrant violations of the law to continue further.

The biggest waves can be caused by the smallest ripples; ripples that could, one day, grow large enough to wash away the corruption that plagues many Japanese businesses.

When that day comes, we’ll be proud to say that we were the ones who dropped the stone into the lake.