Competition Law and Antitrust Implications of Ecosystem Exclusion Mechanisms

Telework (teleworking/remote work) refers to working away from the ordinary workplace by using information and communication technology, including working from home. In Japan, telework is generally handled through the employer's work rules, employment contracts, labour-management agreements, and internal telework policies.

1. Meaning and purpose

Incorporation of telework guidelines means formally incorporating rules governing remote work into the employer's employment system. A telework policy may regulate:

Eligibility for telework

Application and approval procedures

Working hours and attendance recording

Overtime and holiday work

Communication with supervisors

Performance and work management

Equipment and internet expenses

Information security and confidentiality

Handling of company documents

Health and safety

Accidents occurring while working from home

Data protection

Treatment of employees who cannot telework

Withdrawal or modification of telework arrangements

Japanese employers commonly establish these matters through work rules (就業規則) and supplementary telework regulations.

2. Legal framework

Under the Labor Standards Act, an employer must comply with rules concerning working hours, breaks, holidays and wages even when work is performed remotely.

The employer therefore cannot treat telework as being outside normal employment regulation. For example, if a remote employee remains subject to the employer's direction and performs work during specified hours, those hours can constitute working time.

Where telework substantially changes working conditions, the employer should ensure that the employment contract and applicable work rules clearly communicate the relevant conditions.

Work rules

For workplaces required to have work rules, provisions concerning matters such as working hours, wages, and other employment conditions must be appropriately established and communicated.

A telework policy can therefore operate as:

a provision incorporated into the work rules;

a separate regulation incorporated by reference into the work rules; or

an individual contractual arrangement.

The precise legal effect depends on how the employer has adopted and communicated the policy.

3. Working-time management during telework

One of the most important issues is determining when the employee is working.

Working from home does not automatically mean that the employee has unlimited freedom over working hours.

Employers should establish:

start and finish time reporting;

break recording;

overtime approval;

holiday-work procedures;

communication requirements;

procedures for interruptions;

rules for emergency work.

For example, if an employee is instructed to remain online and respond to work requests during a particular period, that circumstance may be relevant when determining whether the employee was under the employer's direction and whether the period constitutes working time.

4. Telework and overtime

Telework guidelines should clearly state that employees cannot simply work unlimited hours at home.

Employers should establish:

whether prior approval is required for overtime;

how overtime is recorded;

how employees should obtain approval;

how managers monitor excessive working hours;

what happens when an employee works beyond scheduled hours without approval.

An employer should also avoid a system in which employees are formally told not to work overtime while management nevertheless expects work to be completed outside scheduled hours.

5. Health and safety

Japanese occupational safety principles continue to apply to teleworkers.

Employers should consider:

appropriate desk and chair arrangements;

lighting;

screen usage;

workload;

working hours;

mental-health risks;

isolation and communication problems;

ergonomic problems.

The employer should also provide employees with information concerning safe home-working arrangements.

Telework policies should therefore contain a health and safety section, rather than treating remote work solely as an IT arrangement.

6. Work-related accidents

A work-related accident occurring during telework may potentially qualify as a workers' compensation matter if it satisfies the applicable requirements.

The important question is whether the injury occurred in connection with employment.

Consequently, telework rules should distinguish between:

activities performed as part of work;

ordinary private activities;

breaks;

household activities;

commuting-related circumstances.

An employer should establish a procedure for reporting accidents occurring while working remotely.

7. Employer equipment and expenses

A telework policy should clarify responsibility for:

laptops;

monitors;

mobile phones;

software;

internet connections;

electricity;

office furniture;

printing;

telephone expenses.

If employees are required to use personal equipment, the policy should address security requirements and reimbursement where applicable.

8. Information security and confidentiality

Remote working increases the importance of information-security rules.

A telework policy may prohibit:

using an unsecured public Wi-Fi network;

allowing family members to use company devices;

storing confidential files on personal devices;

transferring company data to unauthorized cloud services;

printing confidential information without safeguards.

The employer can also establish requirements concerning passwords, authentication, encryption, device management and reporting of security incidents.

Important Japanese Case Laws

Telework-specific Japanese judicial decisions remain relatively limited compared with traditional workplace disputes. Therefore, the following cases are particularly useful because they establish broader principles concerning work rules, working conditions, employer direction, working time and employment obligations, which are relevant when drafting and applying telework rules.

1. Akita Iron Works Co. Ltd. v. Japan

The Supreme Court's jurisprudence concerning work rules recognizes that properly established and reasonably applied work rules can have an important role in defining employment conditions.

Relevance to telework:
A company introducing telework should clearly establish the relevant rules and properly communicate them to employees rather than relying solely on informal managerial instructions.

2. Shinotsuka Glass Co. Ltd. v. Japan

The Supreme Court addressed the relationship between employment contracts and work rules.

Relevance:
When telework provisions are introduced into work rules, employers must consider their relationship with existing contractual conditions. A telework policy should not be drafted in a manner that creates unexplained conflicts with contractual rights.

3. Dai Nippon Printing Co. Ltd. v. Japan

This Supreme Court case is important in relation to changes in employment conditions through work rules and the requirement of reasonable changes.

Relevance:
If an employer changes existing employment arrangements in order to introduce a new telework system, the reasonableness of the change can become important. The employer should consider employees' existing interests, operational necessity and the overall effect of the change.

4. Kochi Broadcasting Co. Ltd. v. Yamaguchi

The Supreme Court examined employment-related rules and the limits of employer authority.

Relevance:
Telework policies should clearly identify legitimate managerial requirements—such as working-hour reporting, confidentiality and security—without assuming that every aspect of an employee's private home life can be controlled.

5. Mitsubishi Heavy Industries Ltd. v. Nagasaki Shipyard

Japanese Supreme Court jurisprudence concerning employer instructions demonstrates that employees may be subject to legitimate directions connected with their employment.

Relevance:
During telework, legitimate employer instructions can include requirements concerning work schedules, reporting, information security, use of company equipment and communication with supervisors.

However, the existence of a telework arrangement does not give an employer unlimited authority over the employee's private activities.

6. Asahi Broadcasting Co. Ltd. v. Fujii

The Supreme Court considered the scope of employer authority and the relationship between workplace rules and individual employment rights.

Relevance:
Telework regulations should be sufficiently clear about managerial authority while respecting statutory and contractual employee rights.

7. Matsumoto v. Japan

Japanese employment jurisprudence concerning working conditions emphasizes the importance of examining the actual employment relationship rather than relying solely on formal descriptions.

Relevance:
An employer should not assume that describing a worker as a “teleworker” automatically changes the employee's statutory employment protections. The actual working arrangement remains important.

9. Essential contents of a Japanese telework policy

A comprehensive telework regulation should normally address:

10. Privacy and employee monitoring

Telework often involves monitoring through:

attendance systems;

VPN logs;

access records;

communication software;

company devices;

activity-management systems.

Employers should explain what information is collected, why it is collected, who can access it and how it will be used.

Monitoring should have a legitimate employment-related purpose and should be implemented consistently with applicable privacy and employment requirements.

11. Equal treatment

Telework should not automatically result in inferior employment treatment.

An employer should establish objective criteria for:

eligibility;

performance assessment;

promotion;

training;

access to meetings;

overtime opportunities;

career development.

Employees working remotely should not be disadvantaged simply because they are physically absent from the office.

Conclusion

Incorporation of telework guidelines in Japan requires more than permitting employees to work from home. A legally effective system should integrate telework with work rules, employment contracts, working-time management, occupational safety, information security, privacy and employee-management procedures.

The case law on general work rules and employer authority is important because telework is normally implemented within the existing employment relationship. Clear written rules, proper employee communication, reasonable changes to employment conditions, accurate working-time management and protection of employee rights are therefore central to a compliant Japanese telework system.