legal information to operate worker dispatching business in Japan ( haken ho = 派遣法 )

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Assumed that you are operating worker dispatching company ( Haken kaisha )  in Japan.
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You need to know legal information related to Act on worker dispatching business.
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So  in this page, I will illustrate it.
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Amendment of act on worker dispatch business ( Haken hou = 派遣法 ) was came into effect in 2015, September 30.
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Deemed offer of an employment contract ( = Rodo keiyaku moshikomi minashi seido )
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In the case a client company ( a company who receives dispatched worker = Haken saki ) violates restriction on limitation of dispatching period ( 3 years etc ), as a penalty for it, there is a system of deemed offer of employment contract.
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Or
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In the case a company committed disguised subcontract  ( Giso ukeoi ) for the purpose of escaping from regulation related to labor law,  as a penalty for it, there is a system of deemed offer of employment contract.
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If this deemed offer of employment contract is applied, it is deemed that client company has offered dispatched worker for employment contract.
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It is deemed that client company has offered dispatched worker to conclude employment contract directly.
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So, if she ( dispatched worker ) has accepted the offer, she becomes  employee of ( ex ) client company .
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However, if the client company does not know its violation without negligent ( zen i mukashitsu = 善意無過失 ), such deemed offer of job contract is not applied.
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This is stipulated in articles 40-6 of worker dispatching act.
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This ” violation ” includes following cases.
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1  If client company ( = Haken saki  )has engaged dispatch worker in job where dispatching worker can not engage.
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2  If client company accepted dispatched worker from a company who does not have license of worker dispatching business.
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3  If client company engaged dispatched worker more than limitation period.
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4  If a company engaged a worker under the name of subcontract though she is actually dispatched worker.
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If this deemed offer of employment contract is applicable, she can accept its offer within one year from such violation.
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In the case she has accepted the deed offer of employment contract, labor condition is as same as labor contract with her and dispatched company.
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So, if she is fixed term contract worker ( Yuki koyo rodo sha = 有期雇用労働者 ), she can become fixed term worker with ( ex ) client company.
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And the amount of her salary is also succeeded to ( ex ) client company.
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In the case duration of dispatch contract is from April 1 to September 30.

On June 30th, deemed offer of employment contract was applied.

In this case, client employment contract between (ex) client company and (ex)dispatched worker continue until September 30.
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As for Social insurance and Labor insurance related to Worker Dispatch Business
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Worker dispatching business operator ( haken kaisha = Haken moto = 派遣元 ) needs to enroll its Dispatched workers ( haken shain)   in shakai hoken (  social insurance = 社会保険 ) and koyo hoken ( employment insurance = 雇用保険 ).

” Shakai hoken ” include employee’s health insurance (健康保険 = kenko hoken ) and  Employee’s pension insurance = kosei nenkin hoken = 厚生年金保険.
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” Koyo hoken ” include Labor insurance (= rodo hoken = 労働保険) and   employee’s accident compensation insurance (= rosai hoken = 労災保険)
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You have legal obligation to cover your employees ( Dispatched workers are your employees ).

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When you file or renewal for permission to operate haken kaisha, you need to report on status of enrollment of your dispatched workers.
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In the case you do not have any employees at the time of filing for permission of worker dispatching undertakings, you need to promise that you will enroll your workers in social insurance and labor insurance when you have hired any employees eligible for such insurance.
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And you need to clarify your promise on application form.
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As for employee’s health insurance ( kenko hoken ) and employee’s pension (kosei nenkin)
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In the case you are operating worker dispatching business in Japan, you need to cover your all employees.
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However, if working hours per a day of specific employee is 3/4th  or less of full-time worker’s

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Or
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If working hours per a week of specific employee is 3/4th  or less of full-time worker’s
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Or
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If monthly working days of specific employee is  3/4th  or less of full-time worker’s
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Or a specific employee is expected to work within 2 months.
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You do not need to cover the employee by employee’s health insurance and employee’s pension.
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As for employment insurance ( koyo hoken )

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In the case your dispatched worker is expected to work for 31 days or more continuously and at the same time she is expected to work for 20 hours per a week, you need to enroll her in employment insurance.
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In the event  your dispatched worker is covered by this employment insurance, if she has lost her job, there are possibilities that she can receive unemployment benefit ( Shitsugyo kyufu).
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In order to cover your worker in employment insurance, you need to submit notification paper to Hello Work (public employment security office).
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You need to submit this paper within 10 days of hiring the first eligible employee.
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As for worker’s accident compensation insurance ( = rosai hoken )
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In the case your dispatched worker is injured or killed during working or commuting, this rosai hoken can compensate its damage.
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You need to pay insurance premium.
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Even if the number of working day is one, this insurance can cover it.
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Even if your employee is part-timer or day worker, you need to cover the worker.
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Toroku gata haken and Joyo gata haken.

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1)Toroku gata haken = 登録型派遣(一般労働者派遣)= Registration type worker dispatching.
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Assumed that a person wameants to work as dispatched worker.
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In the case of Registration type worker dispatching, you ( haken kaisha ) registers her as potential dispatched worker.
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Then if you have found suitable job for her and she accepted it, you and she enter into employment contract.
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Then you are liable to pay her salary.
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This is general way than Joyo gata ( = regularly employed dispatched worker ).
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2)Joyo gata haken = regularly employed worker dispatching
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In the case of joyo gata haken, she and you enter into employment contract before she has accepted job offer.
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So, even if you have not found suitable job for her, you need to pay salary for her.
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Assumed that she has started as dispatched worker in Y company.
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After one month, she has lot her job in Y company.
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In this case if she is a regularly employed dispatched worker  ( = 常用型派遣 = Joyo gata haken ), you need to pay salary for her.
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As for Hiyatoi haken =  dispatched one day worker.
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Basically hiyatoi haken is prohibited by law.
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In the case period of employment contract between you and she is 30 days or less, this contract is included in hiyatoi haken.
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However, content of work falls under either of below, hiyatoi haken is legal.
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Manufacturing of softwareソフトウェア開発/design of machinery機械設計/operation of office equipment事務用機器操作/interpreter通訳、翻訳、速記/secretary秘書/filingファイリング/調査/accounting財務処理/making of document取引文書作成/デモンストレーション/添乗/guide受付・案内/institution研究開発/事業の実施体制の企画、立案/making of book書籍等の制作・編集/design of advertisement 広告デザイン/OAインストラクション/sales セールスエンジニアの営業、金融商品の営業
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And even if her job does not fall under above, if she falls under either of below, hiyatoi haken is legal.
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A.If she is 60 years old or more.
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B.If she is student.
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C.If she has main job other than dispatching work and annual amount of her income from her main job is 5 million yen or more.
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D.If annual  amount of income of her household is 5 million yen or more and the amount of income of her spouse is larger than her.
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In order to confirm if she can work as daily basis dispatched worker, you need to look at reliable document.
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So, in the case of D, you need to inspect the content of withholding tax slip of her spouse.
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Measures to stabilized employment of dispatched workers.

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According to amendment of act for securing proper operation of worker dispatching business, dispatched workers are categorized into classed below.
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And based on these categories, you need to conduct necessary measures.
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Indefinite term dispatched worker ( muki koyo haken rodo sha = 無期雇用派遣労働者)
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Definite term dispatched worker (有期雇用派遣労働者)
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In the case of definite term dispatched workers, situation of her employment is unstable.
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So, you need to take necessary action to stabilize her future employment.
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Assumed that she is expected to work in same division for one year or more.
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If she has intention to work in the same division after end of current employment contract period, you need to make effort to stabilize her employment.
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Assumed that she is expected to work in same division for 3 years or more.
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In this case, you have obligation to conduct necessary measures to stabilize her employment.
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If you know she will work in same division for more than one year or three years (  even before one or three years are passed), you have obligation to make effort or conduct necessary measures to stabilize her employment.
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Then you need to record result of measures in ledger ( haken moto kanri daicho ).
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Measures to stabilize her employment.

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At first, ① You need to ask client ( a company who receives dispatched worker ) to hire her as employee directly.
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If the client company has hired her, she become its employee.

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It it better to ask the client by paper. ( to sustain proof )
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Then, if the client does not hire her, ② you can introduce her other work place.
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In this way, she may be able to brash up her skill.
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Or ③ You can hire her as your employee.
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If you are operating worker dispatching business, you may need to hire your employees other than dispatched worker.

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Or ④ You need to conduct other measures ( shokai yotei haken or salary paid training)
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You may want to avoid this obligation by reducing employment term to less than 3 years.
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However, such activity is evasion of the law and unsuitable to renew your license.
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As for restriction on period of receiving dispatched workers ( kikan seigen ).
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Assumed that you are operating worker dispatching business in Japan.
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So, you are called ” haken moto “.
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In the case you dispatch a worker ( she is dispatched worker = haken shain ) to client ( a company who receives dispatched worker. This company is  called “haken saki” ), you have obligation to receive notification from your client of date of conflict ( teishokubi = 抵触日 ).

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Without this notification, you cannot enter into worker dispatch contract ( haken keiyaku. Contract between you and client ).
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Basically, client cannot accept dispatched worker in same office ( office = jigyosho =workplace = 事業所 ) for more than 3 years.
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Because, utilization of dispatched worker is absolutely temporary measure.
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Assumed that D company has dispatched definite term dispatched worker named Nancy ( she is less than 60 years old ) to R company.
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Nancy has worked in R company for two  years until end of 2016.
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Then now you want to dispatch a worker named John to this R company..
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In this case, John ( definite term dispatched worker and his age is less than 60  ) can work in R company only for one year, basically.
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( Because 2 years of Nancy + 1 year of John can not exceed 3 years. )

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If R company could accept dispatched worker for long years without restriction, R company would always hire dispatched workers at low salary.
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Then, owing to such activity, salary for other regular employees will not increase easily.
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And as for Nancy and John, they are always definite term dispatched workers and their status is always unstable.

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At the time you dispatch John to R company, you can not know whether John can work only for one year.
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Because, you can not know D company’s activity.
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So, in this case, you need to receive notification of date of conflict mentioned above.

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( This paper says John can work until end of 2017. This date is called ” date of conflict ” )
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This is sample of notification for date of conflict.
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2017, January, 10th.             ……………………  ………………….To R company
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……………………………………………………..Name of your company
……………………………………………………..Name of representative director
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Notification of date that conflicts limitation for receiving dispatched worker
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Now your company is supposed to received dispatch worker.
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This dispatch worker is a person who is subject to limited to work as dispatched worker.
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So, we issue this notification as below.
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1 Work place of this dispatched worker.    R company R branch.
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2  Date of commencement of receiving    2017, January, 15th
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3  Date of Conflict   2018, January, 5th.

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If you do not receive this notification, you cannot know this date.
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So, you have legal obligation to receive this notification before you and R company ( client = receiving company of dispatch worker)  enter into worker dispatch contract ( = Haken keiyaku ).
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In the case you do not fulfill this obligation, if dispatched worker makes application for employment to R company, ( without R’s consent ) R company needs to hire dispatched worker as employee.
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So, R company needs to pay salary for her directly.
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This process is called “rodo keiyaku moshikomi minashi seido”.
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However, you want to ask your dispatched worker work in R company for more than 3 years.
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In that case, you need to collect opinion of majority labor union ( Kahan su rodo kumiai = 過半数労働組合 ) of R company.
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Because, if R company receives dispatched worker for long years, it may not be beneficial for employees in R company.
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So, you need to collect their opinion.
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You do not need to obtain their permission.

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In the case there are 10 employees in R company.
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If 6 employees are member of the labor union, such labor union is included in majority labor union.
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If there is not such labor union in R company, you need to collect opinion of a person who represents majority of all employees.
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R company needs to collect opinion of majority labor union etc by one month prior to date of conflict.
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In the case a dispatched worker is indefinite term dispatched worker or his / her age is 60 or more, if these items are not clarified in worker dispatch contract, there are still R company can accept only for 3 years basically.
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Client cannot accept same dispatched worker in same division of same office for more than 3 years.
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Same division of same office will be “ ka” ( = 課 ).
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For example, sales division = Eigyo ka, general affairs division = somu ka.
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It should differ depending on scale of receiving company.
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Even if she ( dispatched worker) has worked in specific division for more than 5 years before amendment of act on worker dispatch business ( 2015, September 30th ), such 5 years are not included in calculation of this limitation of 3 years.
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You need to inspect the 3 years after enforcement of act on worker dispatch business AND renewal of contract of worker dispatch.

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On the other hand if she is indefinite term dispatched worker or her age is 60 or more and these items are clarified in worker dispatch contract, she can work in same division of same company for 3 years or more.
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She ( her age is less than 60 and definite term dispatch worker ) can not work in same division of same company for more than 3 years even if you have collected opinion of majority labor union of R company.
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Then, if R company has accepted her engagement for more than 3 years, “rodo keiyaku moshikomi minashi seido” is applicable.
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As for  management record of dispatching business ( Haken moto kanri daicho )
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