layoff restrictions

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A comparison of Japanese dismissal regulations with those of other countries shows that the legal framework for dismissal in Japan is relatively loose by international standards. However, the actual difficulty level of dismissals in Japan is the most severe among OECD member countries, ranking among the top five in terms of severity. This dichotomy arises from Japan's employment system, which differs from that of many other countries. In Japan, employment is often not limited to specific jobs (membership-type employment), and dismissal for reasons such as job redundancy or inability to perform specific duties is more complicated than in the job-based employment systems prevalent in other countries.

In terms of the strength of restrictions on dismissals (in the case of regular employment) according to the Employment Protection Legislation Index (EPL), Japan ranks 28th with a score of 2.08. Japan's dismissal restrictions are more stringent than those of countries such as the United States, with a score of 1.31, but less stringent than those of European countries such as Italy with 2.86 and France with 2.68.

These insights highlight the nuanced nature of the Japanese labor market. While legal restrictions may appear loose, cultural and institutional factors make termination a fairly difficult process. This unique employment situation underscores the need for a comprehensive understanding of both the legal framework and actual employment practices in Japan relative to other countries.

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