Katsuhiro Iwayama, Attorney at Law

<Legal Nature>
“Encouragement to resign” refers to a situation in which the employer takes the initiative in recommending resignation to an employee whom the employer wishes to have leave the company. If the employee agrees as a result of such encouragement, the employment relationship between the employer and the employee may be terminated by mutual consent. However, encouragement to resign does not have any binding force (otherwise, it would constitute a dismissal). In other words, it is a termination of the employment contract based on the agreement of both parties.
*Generally, a statement by the employer such as “Would you consider resigning?” is understood as an invitation to treat. However, where the employer presents a separation payment and encourages resignation, and the employee agrees to such terms, thereby forming a mutual agreement to terminate the employment relationship, it may be possible to construe the initial proposal itself as an offer. In practice, procedures such as requiring the employee to submit a resignation letter in accordance with the work rules and the employer’s acceptance thereof are often omitted where a separation agreement is executed.


<Key Considerations When Requesting Voluntary Resignation>

Although encouragement to resign is merely a proposal from the employer and is not legally binding, it is often perceived as a de facto dismissal. Moreover, since the employee will lose their job if they ultimately resign, the impact on the employee can be significant. In light of this, the following points should be noted:
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Conduct during working hours:
If conducted during working hours, the employee is under the employer’s direction and supervision, and therefore, as a general rule, cannot refuse to at least listen to the discussion. While there may be concerns about visibility to others, it is still advisable to conduct such discussions during working hours to ensure that the employee properly hears the explanation.

Avoid excessive persistence (1):
Encouragement to resign is merely a request for voluntary resignation and carries no binding force. However, repeatedly and persistently attempting to persuade the employee over a prolonged period may itself be regarded as harassment. Although there is no strict time limit, it is generally advisable to keep the discussion to around 30 minutes, unless there are questions from the employee.

Avoid excessive persistence (2):
It is common practice to allow the employee a reasonable period for consideration and then arrange a further discussion. However, repeatedly setting up meetings despite the employee having clearly indicated an intention not to resign may also be regarded as harassment. If the employee clearly refuses after being given time to consider, it is advisable to suspend further encouragement efforts.

Have two company representatives present:
This is to avoid disputes over what was or was not said. Typically, one person will act as the primary speaker, and the other as a note-taker and witness. At the same time, having an excessive number of company representatives confronting a single employee may itself be perceived as harassment and should be avoided.

Do not reflect refusal in performance evaluations:
Lowering an employee’s evaluation on the basis that they refused to resign would be improper. While it is, of course, permissible to reflect poor performance in evaluations, employees may perceive such actions as retaliation for refusing resignation. Therefore, when assigning a low evaluation, it is important to provide objective explanations based on facts, regardless of whether encouragement to resign has taken place.

Avoid emotional or threatening language:
If an employee does not accept the request to resign, the employer must not insult the employee, excessively emphasize alleged incompetence, or make threats such as demotion, salary reduction, or reassignment to unrelated departments. Such conduct could amount to coercion to resign.​


<Typical Range of Separation Payments>
As for the typical amount of a separation payment in the context of encouragement to resign, this is not a strictly legal matter, and there is no fixed standard. It depends on various factors, including the employee’s age, position, and job responsibilities, as well as the employer’s financial capacity and the degree to which the employer wishes the employee to leave. Nevertheless, as a general benchmark, an amount equivalent to approximately three to six months’ salary is often considered typical.

The attached document contains an excerpt from a script for conducting a voluntary resignation discussion. It is intended as a general reference and includes only standard content.