Fixed-Term vs. Permanent Contracts and the 5-Year Conversion Rule

The 5 year rule Japan employment residents ask about gives fixed-term workers a statutory path to a permanent contract after five cumulative years with the same employer.¹² The mechanism is the 無期転換ルール (muki tenkan rūru, "indefinite-term conversion rule"), and it turns on a written request you make, not an automatic upgrade.¹³

Confirm current details with official sources

Procedures, fees, and requirements can change. Confirm current details at the Ministry of Health, Labour and Welfare (MHLW) indefinite-conversion portal. This article is general information, not legal, tax, or immigration advice; for your specific case, consult a licensed bengoshi (lawyer) or shakai hoken rōmushi (labor and social security attorney) for a contested non-renewal or conversion refusal, or the prefectural Labor Bureau consultation desk for an initial assessment.

Overview

This article is for fixed-term workers approaching renewal or the five-year mark, including 契約社員 (keiyaku shain, "contract employees"), part-time staff, and arubaito on fixed terms.²³ It applies identically to Japanese nationals and foreign residents, since the Labor Contracts Act draws no nationality distinction.¹⁴

It does not cover dispatch-specific triangular rules in depth. Your contracting employer for counting purposes is the dispatching agency that signed your contract, not the host workplace.⁵

The statute and MHLW guidance below are national law. There is no ward or prefectural variance in the conversion right itself.¹² What varies company to company is the post-conversion work rules your employer has written, not the right to convert.⁶

How fixed-term contracts work

A 有期労働契約 (yūki rōdō keiyaku, "fixed-term labor contract") ends on its stated end date unless both sides agree to renew it.¹ In Japan the common patterns are six-month and one-year renewable terms, and each renewal counts as another contract with the same employer toward the cumulative total.²⁶

Typical terms and renewal practice

Confirm the parties, the start and end dates, and the renewal method in your own contract before counting anything. Renewal is by agreement, not automatic, and a single unrenewed term expires on its end date.⁶

Only contracts starting on or after 1 April 2013 count toward the five-year total. Earlier contracts are excluded by the amendment transitional measure.⁴ A one-year contract renewed repeatedly therefore produces the conversion right during the sixth year, after five full years are complete.²⁶

A three-year contract renewed once reaches six cumulative years, so the right arises during the fourth year of the second contract. The arithmetic follows the total, not the number of renewals.²⁶

Cooling periods that reset the count

A gap with no contract, the 空白期間 (kūhaku kikan, "vacant or cooling period"), can reset the clock. A gap of six months or more excludes all service before the gap from the cumulative 通算契約期間 (tsūsan keiyaku kikan, "total contract term").¹

Where the contract expiring just before the gap lasted under one year, the reset threshold is shorter. The bar is half that contract term (rounded up per MHLW ordinance) rather than a full six months.¹⁶

Changing departments, branches, or worksites does not reset the count. The unit is the contracting employer as a legal entity, not the factory or branch office.⁶³

The 5-year conversion rule (Article 18)

Labor Contracts Act Article 18 provides that a worker whose cumulative term across two or more fixed-term contracts with the same employer exceeds five years may request an indefinite-term contract, and the employer is deemed to accept.¹ MHLW describes the purpose as curbing abusive use of fixed terms and stabilizing employment.²³

The three requirements

First, the cumulative term of two or more fixed-term contracts with the same employer exceeds five years.¹ A single continuous five-year contract with no renewal does not satisfy the two-contract element on its own.¹⁶

Second, the contracts were renewed repeatedly to reach that total. Each renewal is a fresh contract for counting purposes, even where duties and location stayed identical.¹⁶

Third, you are currently under a fixed-term contract with that same employer when you request. Workers between contracts with no current agreement hold no exercisable right until re-hired.¹⁶

When the right arises and how to exercise it

The right is exercisable at any time from the first day of the contract period in which the total first exceeds five years, through the last day of that current contract.⁶³ If you renew without requesting, the right carries into each renewed term until you use it or leave.⁶³

Conversion is never automatic. You must make the request (申込み) to the employer before the current term expires.¹² On a valid request the employer is deemed to have accepted, so the employer cannot refuse, and the 無期労働契約 (muki rōdō keiyaku, "indefinite-term contract") takes effect the day after the current fixed term expires.¹

Put the conversion request in writing and keep the receipt

An oral request is legally valid, but MHLW recommends the written model form to prevent later disputes.³⁷ File the prefectural Labour Bureau model request and keep the employer's written receipt notice with your contract copies.⁸

Counting from April 2013

The 2012 amendment (Act No. 56 of 2012) introduced Article 18 with effect on 1 April 2013.⁴⁵ Only contracts whose first day falls on or after that date enter the cumulative total.⁴

Article 19, the non-renewal doctrine covered below, took effect on promulgation in August 2012 as codified case law rather than a new rule.⁴⁵ The two provisions therefore have different start dates, which matters only for very long tenures that straddle 2012 and 2013.⁴

What conversion changes and what stays the same

Conversion changes the contract term from fixed to indefinite. Everything else carries over unchanged unless your employer's work rules or agreement provide otherwise.¹⁶

Element	Before conversion	After conversion
Contract term	Fixed end date; expires unless renewed	No fixed term; continues until resignation, retirement, or lawful dismissal1
Duties, location, pay, hours	As stated in current contract	Identical to current contract unless work rules set separate post-conversion terms16
Bonus, retirement allowance, retirement age	As stated (often absent for fixed-term staff)	As stated in post-conversion work rules; confirm before requesting6

The table reflects the statutory carry-over rule as MHLW explains it. Confirm your employer's post-conversion work rules for the second and third rows before you request.⁶

Conditions carry over unless work rules say otherwise

Post-conversion conditions on duties, workplace, wages, and hours mirror the current fixed-term contract except for the term itself.¹ Where the employer has written separate post-conversion terms into work rules, those separate terms govern instead.¹⁶

MHLW describes lowering conditions at conversion, without any change in duties, as undesirable from the standpoint of smooth conversion.⁶ Employers expecting conversions should set post-conversion conditions in advance, including retirement-age treatment that fixed-term staff often lack.⁶

Dismissal protection after conversion

During a fixed term, mid-term dismissal requires unavoidable circumstances under Article 17, a stricter bar than ordinary dismissal review.⁴ After conversion, the worker holds an indefinite-term contract terminable only where dismissal has objectively reasonable grounds and is socially appropriate under Article 16.⁴

Conversion alone does not confer seishain status, a pay rise, bonus eligibility, or a retirement allowance. Those depend on the employer's own work-rule categories for converted staff.⁶

Check the post-conversion work rules before you request

Ask for the work-rules section that governs converted staff, including any separate retirement age, bonus, or allowance treatment. The conversion right guarantees the term change, not any particular pay or title outcome.⁶

Disclosure duties since April 2024

Since 1 April 2024, on each renewal of a contract in which the conversion right arises, the employer must state in writing both the opportunity to request conversion and the post-conversion conditions.⁶³ Where the contract is renewed again without a request, the notice must be given on each renewal.⁶

Since 1 April 2024, employers must also state any renewal cap (更新上限, kōshin jōgen, "renewal cap") at hiring and at each renewal.⁶ Where the employer newly introduces or shortens a cap, it must explain the reason in advance under the fixed-term contract standards (告示).⁶

Non-renewal to avoid conversion and court push-back

Some employers terminate or cap renewals just before the five-year mark to prevent the conversion right from arising. MHLW states that non-renewal or mid-term dismissal aimed at evading the rule is undesirable in light of Article 18's purpose.²³

The avoidance pattern

Documented patterns include non-renewal just before the right would arise, unilateral renewal caps or non-renewal clauses inserted before expiry, and formal cooling gaps with a promise of re-hire afterward.²³⁹ MHLW guidance treats a unilaterally imposed cap as no guarantee that the resulting non-renewal will be lawful.²³

A renewal cap agreed from the very first contract is not automatically unlawful. Short-term use within five years remains permissible in principle absent special circumvention circumstances.⁹ The problem cases are caps and gaps added late to block an imminent right.³⁹

When courts treat the non-renewal as invalid

A non-renewal is tested under Article 19, the 雇止め法理 (yatoi-dome hōri, "non-renewal doctrine").⁴ Where the contract is deemed equivalent to dismissal, or the worker had reasonable grounds to expect renewal, a refusal lacking objectively reasonable grounds and social appropriateness is void and deemed accepted on the same conditions.⁴

Courts weigh the temporary or regular nature of the work, the renewal count, total tenure, term-management history, and employer conduct that raised expectations.⁹ An agreed renewal cap is one factor among these, not dispositive alone, and late caps aimed at evasion may be held to lack objectively reasonable grounds.⁹³

An avoidance-motive non-renewal can fail under Article 19

MHLW notes that a non-renewal imposed to evade conversion, including a unilaterally added cap or a staged cooling gap, may be void where the worker held a reasonable expectation of renewal.³ Dismissing the newly formed indefinite-term contract after a conversion request is assessed under Article 16 and described as highly likely to fail if litigated.³

Courts have pushed back where the avoidance device was abusive. In the Senshu University litigation, courts approved conversion for a part-time lecturer past five years and rejected the university's blanket ten-year-exception defense for a teacher not doing research as part of duties (as practitioner summaries report the Tokyo District Court December 2021 ruling, affirmed by the Tokyo High Court in July 2022).¹⁰ MHLW also lists rulings contesting pre-right non-renewal rationality and whether signing a capped renewal extinguished reasonable expectation.²

Exceptions with longer thresholds

The ordinary threshold is five years. Two separate statutory routes set longer thresholds for narrowly defined groups, and both turn on certification or appointment provisions rather than job titles alone.⁸¹¹

Route	Threshold	Who it covers	Certification
University teachers and R&D researchers	10 years instead of 5	Covered researchers and teachers at universities and R&D corporations under the 2013 special-amendment Act11	Term-of-office appointment provisions; strict reading of target group1110
High-skilled fixed-project workers (Type 1)	No right while on the certified project, up to 10 years	Advanced specialists on fixed-duration projects, income at or above 10.75M yen per year (as of 2026-09; confirm current figures with MHLW)8	Prefectural Labour Bureau certified employer plan8
Post-retirement continued employment (Type 2)	Post-retirement period excluded	Workers re-employed on fixed terms after reaching retirement age with the same employer8	Prefectural Labour Bureau certified employer plan8

The income figure in the table carries the article's currency note. Confirm the current threshold with MHLW before relying on it, since administrative figures move on a different schedule from statutory year counts.⁸

University teachers and R&D researchers (10 years)

For covered researchers, teachers, and related staff at universities and research and development corporations, the Article 18 threshold reads ten years instead of five.¹¹⁵ The route comes from the 2013 special-amendment Act (Act No. 99 of 2013), effective 1 April 2014.¹¹

Coverage is narrow. It turns on fixed-term contracts with a term set under the Act on the Term of Office of University Teachers (任期法, ninki-hō, "Act on the Term of Office of University Teachers") or specified research and development duties.¹¹¹² MHLW directs a strict reading of the target group and the appointment procedures.¹¹¹⁰

Practitioner analysis holds that ordinary part-time lecturers (非常勤講師, hijōkin kōshi, "part-time lecturers") teaching assigned courses, without fixed-duration research-project duties under the cited provisions, fall under the ordinary five-year rule rather than the ten-year exception.¹² Universities asserting blanket ten-year coverage for all teaching titles have lost on this point in the Senshu litigation described above (as practitioner summaries report it).¹⁰

High-skilled fixed-project workers and post-retirement continued employment

Under the Act on Special Measures Concerning Fixed-Term Employees with Specialized Knowledge (有期特措法, yūki tokuso-hō, "Act on Special Measures Concerning Fixed-Term Employees"), two certified-plan routes suspend accrual of the conversion right.⁸ The Act took effect on 1 April 2015.⁸

Type 1 covers advanced specialists with high income assigned to duties completable within a fixed period exceeding five years. The conditions combine a certified employer plan, advanced specialized knowledge, project duties of a fixed duration, and annual income at or above 10.75 million yen (as of 2026-09).⁸ Suspension lasts only while on those duties and is capped at ten years.⁸

Type 2 covers continued employment after reaching retirement age with the same employer. The post-retirement period is excluded from the cumulative count while the certified plan applies.⁸ Certification in both routes comes from the prefectural Labour Bureau chief with jurisdiction over the head office.⁸

Employers using either route must also give the worker written notice at hiring and at each renewal that the period carries no conversion right.⁶ Without that notice and a certified plan, the ordinary five-year count runs.⁶⁸

Good to know

Request conversion in writing even though oral requests are valid

An oral request is legally valid, but it is hard to prove later. Use the Labour Bureau model request form and keep the employer's written receipt notice with your contract copies.³⁸⁷

A renewal cap agreed at hiring is not automatically void, but a last-minute cap can fail in court

Courts weigh an agreed cap as one factor alongside tenure, renewal history, and employer conduct that raised expectations.⁹ Caps or cooling gaps inserted to block an imminent right may be held to lack objectively reasonable grounds under Article 19.³⁹

Conversion does not mean a pay rise or a seishain post

Conditions carry over unchanged unless work rules provide otherwise, so bonus, retirement allowance, and retirement-age treatment depend on the post-conversion rules.¹⁶ Read those rules before requesting so the term change does not arrive with unwelcome surprises on pay.⁶

Check whether the 10-year exception actually covers your teaching job

University ten-year coverage turns on research duties and term-of-office appointment provisions, not on the teaching title alone.¹¹¹² Ordinary course-teaching part-time lecturers have won five-year conversion despite blanket ten-year claims, as practitioner summaries report the Senshu rulings.¹⁰

Ask the Labor Bureau before the final renewal meeting

The right must be exercised during the current term before it expires, and post-April-2024 renewals must carry a written conversion-opportunity notice.⁶³ Confirm the notice and your cumulative counting with the prefectural Labor Bureau consultation desk before signing a capped renewal.³⁸

See also

• Seishain, Keiyaku, Haken, and Arubaito: Japan's Employment Categories
• Reading a Japanese Employment Contract
• Japan Job Offer Letter and Work Rules (Shugyo Kisoku)
• Probation Period (Shiyō Kikan)
• Paid Leave (Yukyu-Kyuka) and How It's Taken

References

Footnotes

1. Japanese Law Translation (Ministry of Justice). "Labor Contracts Act" (労働契約法), Act No. 128 of 2007, as amended, Article 18. https://www.japaneselawtranslation.go.jp/en/laws/view/3744/en ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵ ↩¹⁶ ↩¹⁷ ↩¹⁸ ↩¹⁹ ↩²⁰

2. Ministry of Health, Labour and Welfare. 有期契約労働者の無期転換サイト (Fixed-term to indefinite conversion portal), top page and rule explanation. https://muki.mhlw.go.jp/ ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹²

3. Ministry of Health, Labour and Welfare. 無期転換ルール よくある質問 Q&A pamphlet. https://muki.mhlw.go.jp/overview/qa.pdf?240426 ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵ ↩¹⁶ ↩¹⁷ ↩¹⁸ ↩¹⁹

4. Japanese Law Translation (Ministry of Justice). "Labor Contracts Act" (労働契約法), Act No. 128 of 2007, as amended, Articles 16, 17, 19 and Supplementary Provisions (Act No. 56 of 2012). https://www.japaneselawtranslation.go.jp/en/laws/view/3744/en ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰

5. The Japan Institute for Labour Policy and Training (JILPT). "New Rules of Conversion from Fixed-term to Open-ended Contracts," Japan Labor Issues, vol. 2, no. 7, June-July 2018. https://www.jil.go.jp/english/jli/documents/2018/007-03.pdf ↩ ↩² ↩³ ↩⁴

6. Ministry of Health, Labour and Welfare. 無期転換ルール ハンドブック (Handbook, 2024 revision). https://muki.mhlw.go.jp/policy/handbook2024.pdf ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵ ↩¹⁶ ↩¹⁷ ↩¹⁸ ↩¹⁹ ↩²⁰ ↩²¹ ↩²² ↩²³ ↩²⁴ ↩²⁵ ↩²⁶ ↩²⁷ ↩²⁸ ↩²⁹ ↩³⁰

7. Mie Info (Mie Prefecture consultation service). "Frequently asked questions about the indefinite work term conversion rule," 10 Nov 2023. https://mieinfo.com/en/informations/others/muki-tenkan-rule-faq/index.html (limitation: resident-facing secondary summary; used only for oral-request-validity and timing examples already stated in ⁶³) ↩ ↩²

8. Oita Labour Bureau / MHLW. 無期転換ルール（労働契約法）について, including 有期特措法 special-measures summary (Types 1 and 2, certification route). https://jsite.mhlw.go.jp/oita-roudoukyoku/hourei_seido_tetsuzuki/roudoukijun_keiyaku/mukitenkan.html ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵ ↩¹⁶

9. The Japan Institute for Labour Policy and Training (JILPT). "If a Fixed-term Labor Contract Has Been Set Renewable for Up To Five Years," Japan Labor Issues, vol. 9, no. 52, Spring 2025. https://www.jil.go.jp/english/jli/documents/2025/052-04.pdf ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

10. General Union. "Tokyo High Court: Ruling Rejecting Avoidance of Unlimited-term Conversion Due to Abuse of 10 Year Special Exception" (Senshu University part-time lecturer case, Tokyo District Court 16 Dec 2021, Tokyo High Court 20 July 2022). https://generalunion.org/2022-7-20-tokyo-high-court-ruling-rejecting-avoidance-of-unlimited-term-conversion-due-to-abuse-of-10-year-special-exception/ (limitation: union summary of judgments, not the judgment text itself) ↩ ↩² ↩³ ↩⁴ ↩⁵

11. Ministry of Health, Labour and Welfare. 大学等及び研究開発法人の研究者、教員等に対する労働契約法の特例について (10-year exception for university and R&D researchers/teachers, Act No. 99 of 2013, effective 1 April 2014). https://www.mhlw.go.jp/file/06-Seisakujouhou-11200000-Roudoukijunkyoku/0000043387.pdf ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸

12. Tozen Union (Hifumi Okunuki). "Are university teachers in Japan covered by the five-year rule?" 27 Aug 2017, explainer on Ninki-ho Articles 4, 5(1), 7 scope. https://tozenunion.org/are-university-teachers-in-japan-covered-by-the-five-year-rule/ (limitation: practitioner/union explainer, corroborates MHLW scope note in ¹¹) ↩ ↩² ↩³