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Tax Info at a Glance

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Subject
Payroll_4SocialInsurance    Termination of employees at a business with fewer than 5 employees
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A**
Date
2023-08-08
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Hello, I am a sole proprietor running a business with fewer than 5 employees. I heard that in workplaces with fewer than 5 regular employees, it is possible to terminate employees at will. Is this correct? If there are any important points to consider when terminating employees in a business with fewer than 5 employees, please let me know.
Answer
In workplaces with fewer than 5 regular employees, the provisions of Article 23 (Restrictions on Dismissal, etc.) Paragraph 1 and Article 27 (Written Notice of Grounds for Dismissal, etc.), as well as Article 28 (Application for Redress of Unfair Dismissal, etc.) of the Labor Standards Act, which provide grounds for restricting dismissal, notice requirements for dismissal, and remedies for unfair dismissal applications, are excluded from application.
However, Article 26 (Notice of Dismissal) of the Labor Standards Act applies even to workplaces with fewer than 5 regular employees. Therefore, in such workplaces, you must provide advance notice of dismissal at least 30 days before termination. If you fail to provide notice, you are obligated to pay 30 days' worth of regular wages. 
In other words, although employers in workplaces with fewer than 5 regular employees can dismiss employees regardless of the presence of justifiable reasons for dismissal, the provision for notice of dismissal still applies. This means that if you are terminating an employee who has worked continuously for over 3 months, you must either provide 30 days' advance notice or pay 30 days' worth of regular wages.
 
Relevant Laws & Regulations <Labor Standards Act>
Article 11 (Scope of Application), Article 23 (Restrictions on Dismissal, etc.), Article 26 (Notice of Dismissal), Article 27 (Written Notice of Grounds for Dismissal, etc.), Article 28 (Written Notice of Grounds for Dismissal, etc.)
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