© 2018

Severance Payment and Labor Mobility

A Comparative Study of Taiwan and Japan

  • Tatsuo Hatta
  • Shinya Ouchi


  • Demonstrates that the Japanese employment termination system is an important cause of the immobile labor market in Japan

  • Provides detailed descriptions of the employment termination system in Taiwan, where the labor market is mobile

  • Shows how the Japanese employment termination system can be reformed by adopting the Taiwanese system to make its labor markets more mobile


Part of the Economics, Law, and Institutions in Asia Pacific book series (ELIAP)

Table of contents

  1. Front Matter
    Pages i-xv
  2. Dismissal Regulations in Japan

  3. Dismissal Regulations in Taiwan

  4. Comparison of Dismissal Regulations

  5. Back Matter
    Pages 187-189

About this book


This book compares legally allowed dismissal conditions in employment contracts in Taiwan and Japan and then examines the possibility of introducing the Taiwan-style severance payment system into Japanese employment contracts.

A significant difference exists between employment regulations of Japan and Taiwan. In Japan, dismissal of an employee on the grounds of ability is not easily upheld in a court of law, and a set rule for dismissals with severance payment does not exist. On the other hand, in Taiwan, where regulations do not allow dismissal at will, an employee can still be dismissed with severance payment, as long as due process is followed.

Written by labor lawyers and labor economists from both Taiwan and Japan, this book describes the procedures that must be followed in the dismissal process in the two countries. It also shows that this difference in dismissal conditions between the two countries explains the low labor mobility in Japan and high labor mobility in Taiwan, and that this difference in labor mobility, in turn, caused the shift of IT production from Japan to Taiwan in the 1990s. The final chapter of the book elucidates the need for introducing the Taiwan-style severance payment before carrying out further deregulation in Japan.


abusive doctrine cash settlements for dismissals civil litigation dismissal regulation employment-at-will exit payment fixed-term contract labor mobility Labor Standards Act lifetime employment mandatory retirement ages merit-based wage system non-regular employees contract for an indefinite period Ponzi scheme regular employees reinstatement seniority-based wage system severance payment unemployment insurance

Editors and affiliations

  • Tatsuo Hatta
    • 1
  • Shinya Ouchi
    • 2
  1. 1.Asian Growth Research InstituteKitakyushuJapan
  2. 2.Graduate School of LawKobe UniversityKobeJapan

About the editors


Tatsuo Hatta is president and economics professor of the Asian Growth Research Institute. He has also held the positions of assistant professor at the Ohio State University, and professor at Johns Hopkins University, Osaka University, and The University of Tokyo. Between 2007 and 2011 he was the president of the National Graduate Institute for Policy Studies. He was president of the Japanese Economic Association in 2003 and 2004, and he is currently a member of the Council of National Strategic Special Zones of the Cabinet Secretariat of the Japanese Government. He received a B.A. in economics from International Christian University, Tokyo in 1965 and a Ph.D. in economics from Johns Hopkins University in 1973. His academic contributions have appeared in such journals as the American Economic Review, the Review of Economic Studies, Econometrica, and the Quarterly Journal of Economics. His recent research fields include deregulation of electricity systems, dismissal regulations, and postwar Japanese economic history. 

Shinya Ouchi is a professor of law in the Faculty of Law and Graduate School of Law, Kobe University, Japan. He served as associate professor between 1996 and 2001 and since 2001 has served as full professor. He obtained an LL.B from The University of Tokyo Faculty of Law and an LL.M and Ph.D. from The University of Tokyo Graduate Schools for Law and Politics. His field of research and specialization is labor law and employment policy. His recent research focuses include the impacts of digitalization, robotics, and artificial intelligence on the labor market. Professor Ouchi’s co-edited works include Labour Law in Motion: Diversification of the Labour Force and Terms and Conditions of Employment (Roger Blanpain and Takashi Araki, co-editors;  Kluwer 2004); Decentralizing Industrial Relations and the Role of Labor Unions and Employee Representatives (Roger Blanpain and Takashi Araki, co-editors; Kluwer 2007); and Reconsidering unfair dismissal in Japan: Design of the monetary compensation system (Daiji Kawaguchi, co-editor; Yuhikaku, Tokyo, 2018).

Bibliographic information

  • Book Title Severance Payment and Labor Mobility
  • Book Subtitle A Comparative Study of Taiwan and Japan
  • Editors Tatsuo Hatta
    Shinya Ouchi
  • Series Title Economics, Law, and Institutions in Asia Pacific
  • Series Abbreviated Title Economics, Law, and Institutions in Asia Pacific
  • DOI
  • Copyright Information Springer Nature Singapore Pte Ltd. 2018
  • Publisher Name Springer, Singapore
  • eBook Packages Economics and Finance Economics and Finance (R0)
  • Hardcover ISBN 978-981-13-2148-1
  • eBook ISBN 978-981-13-2149-8
  • Series ISSN 2199-8620
  • Series E-ISSN 2199-8639
  • Edition Number 1
  • Number of Pages XV, 189
  • Number of Illustrations 5 b/w illustrations, 8 illustrations in colour
  • Topics Labor Economics
    Public Economics
    Labour Law/Social Law
  • Buy this book on publisher's site
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