Recently we have been receiving many consultation requests regarding PIPs (performance improvement plans), how to handle them from an employee rights’ perspective, and what a union can do to help.

We invite all interested people working in the IT/Tech industry to come out to our “How to Fight a PIP” workshop on 22 January at 19:30 via Zoom. Please sign up here to attend: rsvp.genu.cc/fightPIP

First of all, here’s a quick primer on what a PIP is. On the surface level, PIPs are issued to employees when their performance is “unsatisfactory”. In theory, this may be because the employee is failing to meet goals for their role, their role’s requirements, or perhaps have some type of behavioral issues. Ideally such PIP notices will come in the form of a written document that should outline clarified expectations for the employee, how the employee is failing to meet those expectations, what improvements are to be expected, and how management might provide support. There is often a specific time frame in mind when the desired improvement is expected to be achieved. 

Let’s emphasize “in theory”, because many times companies use PIPs as a pretext to intentional termination, whether rightfully deserved or not (and in many cases, they are not). Globally the usage of PIPs increased over the years, especially in corporations and IT/Tech companies. Their usage in Japan likely began in the 1990s/2000s as international companies brought Western-style management practices from their North American or European headquarters (e.g., such as IBM Japan adopting IBM USA’s practices). Since then, it has been a practice that has been increasingly adopted, even by many Japanese companies.

At a high level, what is most important for you to know about PIPs in Japan?

1. Although PIPs can be used as a pretext for termination, in reality, it is very difficult to legally terminate someone in Japan. While internationally PIPs are often seen as a death sentence to one’s employment, in Japan, it is often nothing more than an unenforceable threat. The reason for this is that the requirement for an employer to be able to legally justify terminating an employee is very high without the potential recourse of a wrongful termination lawsuit. First, they must carefully document and demonstrate a long period of bad performance — we’re talking maybe at least half a year or more — and secondly, they furthermore must carefully demonstrate that they took measures to assist and correct the employee’s performance, or even offer alternative opportunities (e.g., different job roles). Without these two things, an employee can technically be terminated, but will very likely win a wrongful termination lawsuit if they choose to pursue one.
2. In a wrongful termination lawsuit, Japanese courtrooms do not care about an employee having a PIP, because the status of a PIP is meaningless; what matters is the documentation, evidence, and process. Therefore, PIPs can largely be ignorable to a degree when companies do not follow due process to issue them. It is very important to ask yourself — Are you actually performing badly? Has management and HR actually communicated this to you consistently over time? If so, what kinds of evidence and documentation have they gathered? If the answer to these questions is no/none, and they issue a PIP, it is likely an empty threat (with regards to termination — however they may take other measures like cutting your bonuses). Why issue an empty threat? Because employees often don’t know any better, and because the company wants to avoid paying early retirement payments or costly legal conflicts, they mentally pressure people to leave voluntarily, because they know it is difficult to terminate someone. In fact, we have union members at the General Union who have been threatened with PIP, but still maintained employment for years, because they were empowered with the knowledge that the employer could not do anything without clearly documented, actionable, and reasonable evidence/process, and as long as they sufficiently completed the work they were assigned. In fact, some have ended up receiving hefty severances, because that would be the only way for the company to come to an agreeable way to terminate employment.
3. Although termination is often avoidable, PIPs do usually come with certain disadvantages. If you receive a PIP, you are likely facing the elimination of any optional bonuses or benefits you may otherwise receive. This is often a part of the company’s strategy to entice you to willingly leave. Receiving a PIP also clearly marks you as someone the company wants to get rid of — meaning they will likely try to make your remaining employment as painful as possible — in hopes that the employee resigns voluntarily. (Notably, this is a practice that is deemed illegal under the recently adopted power harassment laws.) At that point, it becomes a game of cat-and-mouse and mental warfare — of which you may want to consider taking mental health sick leave to help with the mental pressure and to consider a strategy and/or next steps for what to do. You could also consider filing a workplace accident insurance claim, if abuse was involved, and you have clear evidence to prove it. As every individual has their own goals and priorities, there is no easy answer for what ultimate outcome you may want to obtain. That’s why it would be good to consider getting a free consultation with the General Union to have someone to speak to in order to consider your options.

So how can the General Union help with dealing with PIPs?

• Being a member of the General Union, and making it known to your company’s HR, can act as a deterrent in itself. Once the company has been officially informed by the union that the employee is a part of a union that knows how to deal with improper PIPs, they’ll know abusing the employee and treating them contrary to labor, contract, and union laws will be significantly more difficult if they abuse the PIP process.
• The General Union can ensure that the company will engage in collective bargaining to deal with your issue. If you become a member of the General Union, we can act as your assistance and representation in collective bargaining to receive clarification and conduct negotiation to resolve issues regarding the PIP process. We can drill the company as to whether they are following the legal processes effectively, whether they actually have sufficient proof of underperformance, and whether the company is providing fair opportunities to demonstrate sufficient performance. With enough pushback, the company may be pressured to lift the PIP given an insufficient amount of evidence/process. Furthermore, it is explicitly illegal for a company to terminate someone for the reason of being a member of a union.
• With more employees in your workplace as members of the General Union, collective bargaining will be stronger, and employees will have more leverage when pushing back against, and ensuring fair treatment from the PIP process. If you are aware of other employees unrightfully being affected by PIPs, you should get together to act as a collective bargaining unit to put more pressure on the company to do the right thing. In fact, also having members not affected by PIPs would strengthen your position and act as a deterrent from the company behaving badly. The General Union can provide training to you as to how you might organize other employees in your workplace to work together within a union to fight for and/or protect your workers’ rights. There is strength in numbers, and with more numbers, it is more likely to achieve agreements via collective bargaining for the union to handle issues, such as instituting grievance procedures and making performance management policy/process changes. 

If you are facing the issue of PIPs within your workplace, we encourage you to consult the General Union. The General Union is here to help! We welcome all workers and are committed to protecting workers’ rights in Japan. We have an IT & Tech branch for those working at tech companies or tech roles, and we also have an Industrial & Commercial branch for those working in other industries. By joining, you can connect with others facing workplace challenges and learn more about how you can ensure and protect your workers’ rights through union solidarity. Contact us today for a consultation and to join the movement!