A case in which a company ordered a leave of absence because of the arrest of an employee of the company.

What is a leave of absence?

A leave of absence is defined as an exemption or prohibition by an employer of an employee from engaging in labor work while maintaining the labor contractual relationship with the employee, in the event that the employee is unable or unsuitable to engage in labor work. Generally, leave of absence is granted by unilateral declaration of intent by the employer based on the provisions of a collective agreement or employment regulations. There are no legal provisions regarding the content of leave of absence, and the content of each company’s leave of absence regulations should be examined on an individual basis to determine the legal relationship regarding leave of absence.

Criteria for determining whether a leave of absence from prosecution is appropriate

If an employee of a company is arrested and indicted and is no longer allowed to work at the company, the company may order a leave of absence from work due to the indictment, even if there is no provision in the work rules. It is necessary to carefully determine whether or not the indictment will interfere with the company’s operations, and whether or not allowing the employee to work is likely to damage the company’s external credibility or hinder the maintenance of order in the workplace.

Cases in which leave from prosecution is not explicitly stated in the employment regulations

Even if there is no explicit provision in the employment regulations, it is possible to order a leave of absence due to prosecution. Regarding the possibility of a leave of absence for prosecution, the Tokyo District Court ruling on May 23, 2003 stated, “The defendant’s (company’s) employment regulations provide that if the defendant deems it appropriate to place an employee on a leave of absence for special reasons, the defendant may order a leave of absence for a period it deems necessary, during which the employee will be absent from work without pay. …The plaintiff argues that, in the absence of a clear statement regarding leave from work due to prosecution, it is impermissible to order leave from work due to prosecution based on an abstract stipulation in violation of the principle of criminal law.

When is a leave of absence from prosecution granted?

The indicted employee’s continued employment must be likely to cause a loss of external credibility of the defendant, or to cause a disturbance in the maintenance of order in the workplace, or to cause a disturbance in the continued provision of labor or the smooth performance of business activities by the employee. In order to be granted a leave of absence for prosecution, the following requirements must be met, although it is not necessary to be explicitly stipulated in the employment regulations (Fukuoka High Court ruling, December 13, 2002). (1) Continued employment of the indicted employee is likely to cause loss of external credibility of the defendant or to hinder the maintenance of order in the workplace, or (2) the employee’s continued provision of labor services or smooth performance of corporate activities is likely to be hindered, or (3) the degree of disadvantage the employee will suffer as a result of the leave of absence from work is likely to be less than the level of disadvantage the employee will suffer as a result of the indicted employee’s continued employment. (iii) the degree of disadvantage the employee will suffer as a result of the leave is not clearly out of balance compared to the punishment of imprisonment that might be imposed if the facts that are the subject of the indictment were conclusively admitted. If a mistake is made as to whether or not the requirements for a leave of absence from prosecution are met, a lawsuit for damages or a lawsuit to confirm the invalidity of the disposition may be filed at a later date. If you wish to take a leave of absence from prosecution, please consult with an attorney in advance.

Period of leave from prosecution

There is no limit on the length of leave from prosecution to a certain number of months. However, since the system of leave from work for prosecution was approved because prosecution would interfere with work, it is necessary to limit the period of leave from work until the judgment in the criminal case becomes final. Since the principle of presumption of innocence applies in criminal cases, a criminal cannot be punished merely by being indicted. The system of indictment leave is based on the premise that even if an employee is indicted, it will not be clear whether or not the employee is guilty until the verdict is finalized, and it will be difficult to take disciplinary action during that time. Therefore, once the judgment in a criminal case becomes final, the principle of presumption of innocence will no longer apply, and the appropriate disciplinary action will be taken based on the finality of the judgment. Therefore, a leave of absence from prosecution will be granted only until the criminal case is finalized.

Salary during leave from prosecution

Since the leave of absence for prosecution is a system that allows an employee to take a leave of absence from work due to reasons on the employee’s part that interfere with the employee’s work, the salary during the leave of absence may be unpaid. However, in order to avoid future disputes, it is advisable to stipulate in the work rules that the salary during the leave period is unpaid.

Disciplinary action after a guilty verdict

Since a leave of absence from prosecution and disciplinary action are two different procedures, they do not constitute double punishment. If an employee who has been placed on a leave of absence for prosecution is subsequently convicted of a criminal offense, the company may take disciplinary action (e.g., dismissal) on the basis of the conviction. A leave of absence from work for prosecution is a temporary leave of absence ordered on the basis of prosecution, and differs from the internal disciplinary procedure for criminal acts in criminal cases. Therefore, there is no problem in taking disciplinary action (e.g., dismissal) after ordering a leave of absence from work due to prosecution.