Put on a PIP in Japan? What it means and how to respond

What a PIP means under Japanese law

• A PIP is an internal HR process in which the company sets goals, a deadline and support, and then evaluates whether performance or conduct has improved. There is no nationwide statutory form or fixed duration. How it is run is, however, examined against your employment contract and the work rules. Disagreeing with an evaluation and complying with lawful and reasonable work instructions are two different things.
• The purpose varies from company to company. Some use a PIP to support improvement; others use it to make expectations explicit and to document the evaluation process.
• Starting a PIP does not end your employment contract. However, a request to resign, an offer of separation terms or a notice of dismissal may be made in the same meeting or document. Do not judge by the label "PIP"; separate out what is actually being proposed or notified. Labels such as PIP, "warning" (chui or keikoku) or "disciplinary" (the name of an internal procedure, or a disciplinary sanction under Japanese law?) do not determine the legal effect under Japanese law. Under Japanese law, an employer's finding that you did not meet PIP targets does not by itself make a dismissal valid.
• When Japanese courts assess a dismissal for poor performance, they attach weight to whether the employer gave the employee an opportunity to improve and whether it gave guidance and warnings. PIP records may therefore later be used as material in assessing whether a dismissal is valid. PIP records are also evidence not only of the problems the company alleges but of your improvement, the company's support, and your objections to the goals or the evaluation. Record specifically what you did and what you asked to have clarified or changed.

Check PIP goals, deadlines, support and evaluation criteria

When you receive a PIP, check the following in writing and ask in writing if anything is unclear. Keep an email record of what was confirmed.

• Goals: What must be achieved, by when and to what standard, to count as "improved"? Are the goals expressed in numbers or specific behaviours?
• Period: 30, 60 or 90 days, for example. Is it realistically achievable?
• Support: What will the company provide — regular meetings with your manager, training, adjustment of workload?
• Evaluation: Who evaluates, against which criteria and when? Is there an interim review?
• After the PIP: What are you told will happen if you meet the goals, and if you do not?
• Starting point: Is this the first time the issue has been raised, and is it consistent with earlier evaluations and guidance? Do you have the authority, staff and access to information needed to meet the goals, and how will factors outside your control be evaluated?
• Effect on evaluation and pay: Check how starting a PIP, and its outcome, will be reflected in your regular performance evaluation, bonus or incentives and salary review, for which period, and on what contractual or policy basis. Being placed on a PIP does not by itself allow the company to cut your pay regardless of your contract or the applicable rules. A pay cut linked to a lower position or grade is a separate question: check the basis and validity of the demotion itself, and which payments change under the pay rules.

Should you sign the PIP document?

Before signing, read the whole document and distinguish four things: acknowledgement of receipt; agreement with the evaluation; a change to your terms of employment (duties, position, pay); and agreement to leave (for example, "I will resign if I do not meet the goals"). If there is anything you do not agree with, ask before signing how it can be amended or reserved, and record specifically what you object to (for example, adding "I acknowledge receipt but do not agree with the content", or sending your objections separately by email). Adding an objection, or sending an email afterwards, does not necessarily undo an agreement you have already given. Nor does signing an evaluation always amount to a waiver of rights.

Respond to the PIP and document your progress

• During the PIP, work towards the goals in good faith and keep a record of the process. Note, with dates, the items you achieved and anything that prevented achievement (workload, lack of support, changes to the goals).
• Not replying does not by itself mean you have legally accepted the evaluation. However, if there is no record of what you disputed at the time, it becomes harder to explain the history later. Respond in writing to significant factual errors, with specific facts and documents.
• You may be asked to resign during a PIP. That is a request to resign, and you are not obliged to agree. Keep your position on leaving separate from your response on improving your work. Set out specifically what you can do and what you are asking to have clarified or changed about the goals or support. Also record any conduct you consider harassment.

• Workplace adjustments and the basis for evaluation: If health issues make it difficult to perform, consider consulting a doctor or the occupational physician and asking the company's designated contact for adjustments to your work, goals or timeline. The employer's duty of care for safety and health (Labour Contract Act, Art. 5) and the duty to provide reasonable accommodation for a disability (Act on Employment Promotion of Persons with Disabilities, Art. 36-3) are checked separately. If you have a disability covered by that Act, the employer must provide reasonable accommodation to the extent it does not impose an undue burden. Coverage is not limited to people who hold a disability certificate, and whether your ability was evaluated after necessary accommodation was provided can also be an issue. A request or a medical certificate does not automatically pause the PIP or guarantee the adjustment you ask for.

Can you be dismissed for failing a PIP?

• A dismissal for lack of ability or poor performance is invalid unless it has objectively reasonable grounds and is considered appropriate in general social terms (Labour Contract Act, Art. 16). Not meeting PIP goals does not by itself make a dismissal valid.
• An employer does not have to run a process called a "PIP" before it can dismiss, and running one does not make a dismissal valid. The first questions are what duties and abilities your contract required, what shortfall is alleged, and what disruption it has caused to the business. Then, depending on the case, guidance and opportunities to improve, the prospect of improvement, and the possibility of assigning other duties are considered. These are not a fixed checklist of mandatory steps. The opportunity to improve is assessed not only over the current PIP but also over earlier guidance and support.
• The duties and position agreed at hiring, and the ability that was expected, affect the standard of evaluation and the extent of guidance and reassignment expected of the employer. High pay or working for a foreign-owned company does not by itself decide whether a dismissal is valid. In addition to the contract, the actual work problems, the guidance and support given, and the improvement made are relevant. Check not only the employment contract but also the job advertisement, what was explained at hiring, the job description, later agreements and the duties you actually performed.

• Where an agreement limiting your type of work or duties is found to exist, the employer has no authority to order a transfer contrary to that agreement without your individual consent (Supreme Court, Second Petty Bench, 26 April 2024). However, whether such an agreement exists and what it covers (the judgment does not hold that a job description always amounts to such an agreement), proposing other duties and seeking your agreement, and what the employer should consider to avoid dismissal, are separate questions.

• On a fixed-term employment contract, dismissal during the term (Labour Contract Act, Art. 17(1)) and non-renewal at expiry (Art. 19) are judged under different rules. A PIP end date that falls after the contract expiry date does not by itself mean renewal has been decided. On the other hand, such an explanation is relevant to assessing your expectation of renewal. Confirm how employment, work and pay will be handled after expiry, and if you want renewal, tell the employer before the expiry date and keep a record (for how to request renewal, see the non-renewal article).
• The detailed assessment of whether a dismissal is valid is covered in our guide "Unfair Dismissal in Japan — Advice for Employees".

Offered a PIP or a severance package?

• This is a request to resign and an offer of separation terms made at the same time. You do not have to answer immediately. Ask for the package (amount, end date, stated reason for separation, release of claims and so on) in writing and for time to consider. Asking for an extension does not by itself extend the reply deadline (Asked to resign in Japan?).
• Rather than simply choosing between the options as presented, you can also consider asking for changes to the PIP goals, period or support, or to the separation terms. There is no guarantee, however, that the company will agree to changes or keep the current offer open.
• Factors to weigh include your prospects of getting through the PIP, your prospects of contesting a dismissal if it comes, the scope for negotiating a higher amount, the job market, and the effect on your status of residence. For assessing and negotiating separation terms, see Severance pay in Japan; for responding to a request to resign, see Asked to resign in Japan?.

Terminology used in this article

• PIP / performance improvement plan — a company's own improvement and evaluation process (not a separate statutory procedure under Japanese law)
• poor performance — an alleged shortfall in results or quality of work (the company's assessment is its allegation)
• capability — explained where needed as the ability to perform the agreed role (UK-style "capability" procedures are not imported)
• probation — the probationary period at hiring (a PIP does not create or restart probation)
• at-will — not mentioned
• warning / written warning / final written warning — chui or keikoku (not automatically a disciplinary sanction; check its status under the work rules)
• disciplinary action / procedure vs disciplinary sanction — the name of an internal process vs a disciplinary sanction under Japanese law

Related articles

• Assessing separation terms: Severance pay in Japan
• Asked to leave: Asked to resign in Japan?
• Told you are dismissed: Fired in Japan? What to do next
• Is the dismissal valid: Unfair Dismissal in Japan — Advice for Employees (existing guide)

Discuss your PIP with an employment lawyer — We review the PIP document and what has happened, and set out your options before you sign or reply.

References

• Labour Contract Act, Arts. 3, 5, 7, 8, 9, 10, 15, 16, 17(1) and 19
• Act on Employment Promotion etc. of Persons with Disabilities, Art. 36-3 (reasonable accommodation after hiring; undue-burden exception; mandatory since 2016)
• MHLW, Q&A on prohibition of discrimination and reasonable accommodation under the Act on Employment Promotion of Persons with Disabilities (3rd ed.), Q1-3-2, Q3-14-1, Q4-1-5
• Supreme Court, Second Petty Bench, 26 April 2024 (2023 (Ju) No. 604; Shumin No. 271, p. 109)
• MHLW, Employment Guidelines (koyo shishin), II 3(2)(ii): survey of case law on dismissal for poor performance (pp. 23–25)
• (Individual case names on dismissal for poor performance are not listed; the guidelines are referenced instead)

This article is general information, not legal advice on your situation. Figures and procedures are as at the time of writing and may change. We do not handle applications, changes or notifications concerning status of residence; if you wish, we can refer you to a specialist who handles immigration matters.

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This article is provided for general informational purposes only and does not constitute legal advice on any specific matter. Please consult us regarding your specific situation. The content is based on the laws and regulations in effect as of the date of the last update.