Revision to the Civil Code – Short-term Extinctive Prescription

In accordance the revisions to the Civil Code that were agreed last year, changes to the Short-term Extinctive Prescription will become effective from April 1, 2020.
The changes are with regards to general claims:

i) Five (5) years from the time when the claimant became aware of their right to exercise, but when they have not exercised their right and
ii) Ten (10) years from their time of the right to exercise but when they have not exercised their right then the statute of limitations will expire.

In response to this the Ministry of Health Labour and Welfare will undertake previsions to consider the statute of limitations as prescribed principally in the Labor Standards Act. I would like to draw your attention to the Overtime Salary, Annual Leave and payments in lieu of Termination notice, and their present two (2) year statute of limitations.
At present, the maximum retroactive payment incurred has been two (2) years, when the Company has had insufficient attendance record data and trouble has arisen over the unpaid labor claims, however going forwards this is unlikely to be the situation.
The deliberations of the Ministry of Health Labour and Welfare will take place going forwards, however they will need to make a decision ahead of the April 1, 2020 revisions to the Civil Code.
As a consequence of these revisions, Companies will need to review their attendance record systems in greater detail, and promptly build-up more thorough systems.

Thank you.