First Steps for a Company Contacted by a Resignation Agency

Hello, I'm Noriaki Asato, Representative Attorney at LegalAgent.

Phone calls and emails from resignation agencies (taishoku daiko services) usually arrive without any advance word from the employee. An employee who came to work as usual until the day before is suddenly the subject of a message the next morning from a third party saying, "They are resigning as of today." What makes the response difficult is less the resignation itself than the situation in which the employee does not answer the phone and refuses direct contact.

There is no legal problem in itself with an employee using a resignation agency. The issues are procedural: what authority the party contacting you has, when the resignation takes effect, and how far you may contact the employee directly. If you respond emotionally without sorting these out, the risk of being seen as improperly holding the employee back becomes the greater one.

Three Types of Contact: Private Providers, Labor Unions and Attorneys

Parties calling themselves resignation agencies fall broadly into three types. Because what each can do differs, the first step is to identify which type the party falls under.

The first is a private provider without attorney qualifications. A private provider can, at the employee's request, convey to the company the fact that the employee "intends to resign", but has no authority to negotiate with the company over terms such as adjusting the resignation date, the number of days of paid leave to be used, or the amount of unpaid wages. Article 72 of the Attorney Act prohibits persons who are not attorneys or legal professional corporations from engaging, as a business and for the purpose of obtaining remuneration, in representation, settlement or other legal services in connection with general legal cases. Because negotiating resignation terms constitutes an act of representation, a private provider doing so raises issues under that Article. The practical line is not to expect anything from a private provider's contact beyond "conveying the employee's intention to resign".

The second is a labor union. This is the case where a general union accepts the employee as a member and proposes resignation terms through collective bargaining. Article 6 of the Labor Union Act provides that the representative of a labor union or a person entrusted by the labor union has authority to negotiate with the employer concerning the conclusion of collective agreements and other matters. Collective bargaining under this framework differs in legal nature from a private provider's conveyance, and the company has an obligation to respond to collective bargaining. Article 7, Item 2 of the Labor Union Act prohibits, as an unfair labor practice, an employer refusing without justifiable grounds to bargain collectively with the representatives of the workers it employs, so responses such as ignoring the request or unilaterally closing the channel must be avoided.

The third is where an attorney contacts the company as the employee's representative. Because the attorney can negotiate everything including the resignation date, use of paid leave and the method of settling unpaid wages, the safe course is to consolidate the company's contact with that attorney as a rule and refrain from contacting the employee directly.

When you receive the contact, confirm which of these three types the party falls under from their business card, power of attorney or notice. If a private provider requests negotiation of terms, this is a situation where you may treat the contact as one for confirming the employee's intention and withhold any response on terms.

Confirm the Intention to Resign in Writing with the Employee

The first sticking point in contact through a resignation agency is confirming whether the declaration of intention to resign is truly the employee's own. The person on the phone is a staff member of the provider or union, and the procedure goes ahead without hearing the employee's own voice.

In practice, the safe course is to ask, through the resignation agency's staff, for the original resignation letter prepared by the employee or an equivalent document (the employee's signature, or an email from the employee's own contact address, etc.), and at the same time to confirm in writing that there is no discrepancy in understanding of the resignation date and the last day at work. If you proceed on the strength of a single phone call, there will be no record of confirmation if a he-said-she-said dispute later arises over whether "the employee did not actually intend to resign". Requesting such a document does not in itself constitute obstructing the resignation.

The Effective Date of Resignation Starts from Article 627, Paragraph 1 of the Civil Code

For employment contracts without a fixed term (most regular employees fall into this category), Article 627, Paragraph 1 of the Civil Code sets out the rule on requests for termination. That paragraph provides: "If the parties have not specified a term of employment, either party may request termination at any time. In such a case, employment ends upon the passage of two weeks from the date of the request for termination."

In other words, counting from the day the declaration of intention to resign arrives from the resignation agency, once two weeks have passed the employment contract ends even without the company's consent. Even if the work rules contain a provision such as "notice must be given at least one month before resignation", the practical premise is that, under the Civil Code, termination of the contract takes effect upon the passage of two weeks.

What the company should pin down first is the day the declaration of intention to resign arrived and the day two weeks from then. Using these dates as the starting point, the company then structures the return of company property, handover, use of paid leave and treatment of the last day at work.

Consider Handover and Return of Company Property Separately from the Effect of Resignation

In cases involving a resignation agency, the employee often already intends not to come to work, and the resignation date arrives with almost no handover done. Inadequate handover is not a reason to stop the resignation itself, because the effect of a request for termination under Article 627, Paragraph 1 of the Civil Code is not conditional on the completion of handover.

A realistic response is to ask, through the resignation agency's staff, for written answers about the status of work, passwords and where ongoing matters stand. If the employee will not come to work, the company cannot force them to, so the response centers on requesting written answers to the minimum necessary questions.

For company property (PC, employee ID card, keys, uniform, etc.) and personal belongings as well, the usual response is to specify the return method through the resignation agency and ask for the exchange to be done by mail. Visiting the employee's home to demand collection is likely to cause trouble and is better avoided.

Use of Paid Leave and Settlement of Unpaid Wages

Contact from a resignation agency often comes together with a request that the employee resign after using up all remaining paid leave.

Article 39, Paragraph 1 of the Labor Standards Act provides that a worker who has been continuously employed for six months from the date of hire and has worked at least 80% of all working days must be granted 10 working days of paid leave, taken consecutively or in parts. Paragraph 5 of the same Article also recognizes the so-called right to change the timing of leave, under which, if granting paid leave at the time requested would interfere with the normal operation of the business, the employer may grant it at another time.

However, in resignation agency cases, the employment contract itself ends after two weeks under Article 627, Paragraph 1 of the Civil Code, so if the remaining paid leave is used within that period, there is effectively no room to exercise the right to change the timing (changing to another time). Since there is no obligation to work after the resignation date, designating another time would be meaningless. It is necessary to compare the period until resignation with the number of remaining days of paid leave and work out early how many days of attendance can be secured.

As for unpaid wages, Article 24, Paragraph 1 of the Labor Standards Act provides that wages must be paid in currency, directly to the worker, in full. If you are asked to pay into an account of the provider or union, you should confirm in writing that it is an account in the employee's own name before responding. If there are doubts about the calculation of unpaid overtime or retirement allowance, the flow is to examine the attendance records closely and confirm with the employee through the resignation agency's staff.

May the Company Contact the Employee Directly?

After contact from a resignation agency, whether the company may contact the employee directly by mobile phone or email is a point on which many people in charge hesitate.

Where an attorney has been engaged as representative, the general practical understanding is that direct contact with the employee should be avoided. The proper course is to consolidate the point of contact with the representative, and direct contact with the employee may be taken as ignoring the representative.

On the other hand, in the case of contact from a private provider, because the provider has no authority of representation, when it is necessary to confirm the employee's wishes regarding the resignation terms themselves, the company decides according to the circumstances whether to go through the provider or to confirm directly with the employee in writing. However, if the employee has conveyed through the provider a wish that "they not be contacted directly", ignoring this and calling frequently or visiting their home may be regarded as interfering with the freedom to resign. Even where there are matters requiring contact, inquiries in writing or through the provider should be prioritized first.

The Risks of an Emotional Response

It is a natural reaction for the company's staff or executives to feel that the employee "did not do things properly" or to wonder "why didn't they come and tell us directly?" when a resignation agency is used. But carrying these feelings straight into how the company deals with the other side makes the risks greater.

Using high-handed language toward the resignation agency's staff, contacting the employee's home or family directly, refusing to accept the resignation and forcing the employee to come to work even after two weeks have passed, or delaying issuance of the separation notice can all become grounds for the employee or their representative to allege disadvantageous treatment.

The company needs to separate its assessment of why the resignation agency was used from the practical work of steadily processing the resignation. Examining the reasons may be meaningful for future organizational management, but it is not a reason to delay the resignation procedure at hand or to treat the employee disadvantageously on terms. If the company proceeds in order, confirming the type of party, pinning down the effective date, consolidating the channel for handover and return of property, and steadily processing the use of paid leave and settlement of unpaid wages, situations that develop into major trouble will be limited.

Responding to resignation agencies is an area where negotiations tend to drag on if the initial contact is mishandled. We offer support for setting up resignation procedure workflows and checking consistency with work rules through Labor Management and HR, and ongoing handling of routine labor consultations through Legal Outsourcing. For handling disputes with employees, please also see Labor Risks Startups Tend to Put Off, and Responding to Customer Harassment, and for the treatment of confidentiality obligations of departing employees, What Is a Confidentiality Clause? Review Practice for Contracts Other than NDAs.