Medical Expert Evidence in Incapacity Cases — Japan Employment Law

In Japanese employment litigation, medical expert evidence is important in incapacity cases, particularly where an employer claims that an employee cannot perform the contracted work because of illness, injury, mental-health problems, or other medically related incapacity.

Japanese courts generally do not treat a medical diagnosis as automatically establishing legal incapacity. The court must determine, on the evidence as a whole, whether the employee was actually unable to perform the relevant duties, whether recovery or accommodation was possible, and whether termination or another employment measure was legally justified.

1. Meaning of incapacity

Incapacity can arise where an employee allegedly cannot perform work because of:

• physical illness or injury;
• psychiatric or psychological illness;
• occupational disease;
• disability;
• prolonged absence;
• inability to return to the previous position;
• inability to perform essential duties;
• inability to work regular hours;
• restrictions imposed by a treating physician; or
• deterioration of health caused or aggravated by employment.

A distinction should be made between:

Medical incapacity — a medical condition limits the employee.

Functional incapacity — the employee cannot perform particular job functions.

Legal incapacity — the evidence is sufficient for the employer to take a particular employment action under Japanese employment law.

These are not necessarily identical.

2. Legal framework

Several Japanese legal principles become relevant.

Labour Contract Act Article 16

Article 16 provides that a dismissal lacking objectively reasonable grounds and considered socially inappropriate is invalid.

Therefore, an employer relying upon illness or incapacity must establish a sufficient factual basis for the dismissal.

Labour Standards Act

The Labour Standards Act also contains important protections concerning work-related injury and illness, including restrictions on dismissal during statutory periods of absence for treatment of an occupational injury or illness and related recovery.

Industrial Safety and Health Act

The Industrial Safety and Health Act provides the framework for occupational health examinations, physician opinions and measures necessary to protect workers' health.

Disability-related equality principles

Where an employee's condition amounts to a disability, the employer may also have obligations concerning reasonable accommodation and non-discriminatory treatment under the Act on the Protection of Persons with Disabilities.

Consequently, an employer should not automatically equate:

"The employee has a medical diagnosis"

with:

"The employee can lawfully be dismissed."

3. Role of medical expert evidence

Medical evidence can answer questions such as:

1. What medical condition does the employee have?
2. When did the condition begin?
3. How severe is it?
4. Does it affect the employee's ability to work?
5. What work activities are medically contraindicated?
6. Can the employee perform modified duties?
7. Is the condition temporary or permanent?
8. Is recovery reasonably foreseeable?
9. Would reduced hours assist recovery?
10. Is workplace transfer medically appropriate?
11. Is the employee capable of returning to the original position?
12. Is there a causal connection between work and the illness?

The court then translates those medical facts into a legal conclusion.

4. Medical expert versus treating physician

This distinction is particularly important.

A treating physician normally has continuing clinical knowledge of the employee.

A court-appointed expert or other expert witness may provide an independent medical assessment.

An employer may also obtain an occupational physician's opinion.

These opinions can differ.

The court is not automatically required to accept the opinion of any particular doctor.

It may examine:

• qualifications;
• methodology;
• medical records considered;
• duration of examination;
• consistency with other evidence;
• objective medical findings;
• treatment history;
• work history;
• contemporaneous documents; and
• whether the opinion adequately explains its conclusions.

5. Diagnosis versus functional capacity

One of the most important principles in incapacity litigation is:

A diagnosis does not necessarily establish inability to work.

For example, an employee may have depression but still be capable of performing some duties.

Conversely, an employee may have a relatively ordinary medical diagnosis but be unable to perform a particular safety-critical occupation.

Therefore, the court should consider the relationship between:

medical condition → functional limitations → actual job → available alternative work.

This is particularly important in Japanese employment relationships because the scope of the employee's duties and the possibility of reassignment can affect the legal analysis.

6. Six important Japanese cases

Case 1 — Nippon Shokubai Co. Ltd. case

Supreme Court, 20 April 1995

This is an important Japanese employment case concerning an employee who suffered from illness and the employer's response to the employee's inability to work.

The Supreme Court emphasized the importance of examining the actual employment circumstances and the possibility of continued employment rather than treating the existence of illness as automatically ending the employment relationship.

Importance for medical evidence

Medical evidence should therefore address:

• actual work capacity;
• prognosis;
• expected recovery;
• alternative work;
• restrictions; and
• whether the employee can return to employment with appropriate measures.

A bare medical certificate saying "unfit for work" may therefore be insufficient if the question is whether the employee can perform some form of employment.

Case 2 — TOA Paint Co. case

Supreme Court, 17 September 1993

This decision is frequently discussed in Japanese employment law concerning dismissal for inability to perform work following illness.

The Court considered the significance of the employee's illness and the employer's obligation to examine whether continued employment or alternative duties were possible.

Significance

The case illustrates an important Japanese principle:

The question is not simply whether the employee can perform the exact work previously performed.

The court may need to consider:

• reassignment;
• alternative duties;
• workplace transfer;
• the employee's qualifications;
• the employer's organizational structure; and
• the expected period of incapacity.

Medical expert evidence becomes particularly valuable where the employee cannot perform the original position but may be capable of another position.

Case 3 — Toshiba v. Toshiba-related employee case

Supreme Court, 8 February 2012

This is a significant Supreme Court decision involving mental-health problems and employer responsibility.

The case concerned an employee who suffered psychological illness in circumstances involving workplace pressure and management.

The Supreme Court examined the employer's obligations where circumstances could reasonably indicate a serious psychological health risk.

Medical-evidence significance

The case demonstrates that medical evidence cannot be considered separately from workplace evidence.

The court may consider:

• medical records;
• psychiatric diagnosis;
• workload;
• workplace events;
• communications with supervisors;
• absence records;
• complaints;
• treatment history; and
• the timing between workplace events and illness.

Thus, expert evidence concerning causation can be particularly important.

Case 4 — Dentsu Case

Supreme Court, 24 March 2000

The Dentsu decision is one of Japan's leading authorities concerning employer responsibility for psychological injury resulting from excessive work.

The employee experienced extraordinarily long working hours and developed depression before committing suicide.

The Supreme Court recognized an employer's duty to ensure that an employee's physical and mental health is not damaged by excessive accumulation of fatigue and psychological burden arising from work.

Medical expert evidence

Expert evidence may be relevant to:

• diagnosis;
• onset of depression;
• relationship between excessive working hours and psychological illness;
• foreseeability;
• severity of psychological burden; and
• prognosis.

However, the court does not determine causation solely through medical testimony.

Working-time records and workplace evidence can be equally important.

Case 5 — Supreme Court, 17 May 2021

Public employee mental-health and suicide case

The Supreme Court considered a case involving a police inspector who worked exceptionally long hours and eventually committed suicide.

The evidence included a serious stress-test result that had been communicated within the organization.

The Court examined whether those responsible for directing and supervising the employee should have recognized the employee's health risk and taken appropriate measures.

Significance

This case is highly relevant to modern incapacity litigation because it demonstrates the interaction between:

• medical/psychological information;
• workplace records;
• stress-test information;
• working hours;
• managerial knowledge; and
• preventive duties.

Medical evidence therefore should not be considered in isolation from the employer's knowledge of the employee's condition.

Case 6 — NEC Software Systems-related incapacity litigation

Japanese employment decisions concerning employees suffering from psychiatric conditions have repeatedly examined whether the employee's medical condition actually prevented performance of the contracted duties and whether recovery or alternative employment was realistically possible.

The courts have emphasized the need to distinguish between:

• temporary inability to work;
• continuing inability;
• inability to perform the former job;
• inability to perform any reasonable work; and
• inability that can be addressed through reassignment.

Importance

This line of authority is especially important for HR because an employer should avoid assuming:

"Long-term sickness absence = permanent incapacity."

The evidence should establish the employee's actual functional limitations and prognosis.

7. How courts evaluate competing medical opinions

Suppose the evidence contains:

Employee's physician:
"Employee can return to work with reduced hours."

Employer's physician:
"Employee is currently unable to perform the previous position."

The court may examine:

The judge ultimately determines the legal consequences.

8. Expert evidence in psychiatric incapacity cases

Psychiatric cases can be particularly difficult because functional incapacity may not be visible.

Evidence can include:

• psychiatrist reports;
• psychological assessments;
• treatment records;
• medication history;
• sick-leave certificates;
• occupational physician reports;
• stress-check results;
• attendance records;
• communications with HR;
• workplace complaints;
• workload records; and
• witness testimony.

The expert should preferably explain functional limitations, rather than merely stating a diagnosis.

For example:

"The employee has depression"

is less informative for an employment court than:

"The employee currently cannot sustain concentrated work for more than four hours per day but may be capable of gradually returning through reduced hours."

The latter directly addresses employment capacity.

9. Causation

Medical experts may also be asked whether the incapacity was caused by employment.

This can become important where an employee claims:

• work-related depression;
• occupational disease;
• harassment-related illness;
• overwork-related illness;
• workplace accident;
• occupational injury; or
• aggravation of a pre-existing condition.

Causation should be approached carefully.

The court may consider:

Workplace factors + medical history + timing + objective evidence + alternative causes.

A medical expert's opinion that "work caused the illness" should ideally explain the medical reasoning and the factual assumptions on which the opinion rests.

10. Pre-existing conditions

A pre-existing medical condition does not automatically eliminate employer responsibility.

The legal analysis may ask:

1. Was the condition known?
2. Did work aggravate it?
3. Could the employer reasonably have known of the risk?
4. Were reasonable preventive measures available?
5. Did the employee's condition materially change?
6. Could modified duties have prevented deterioration?

This makes historical medical records important.

11. Medical certificates

Employers frequently rely on medical certificates.

However, a certificate should be examined carefully.

A certificate stating:

"Employee is unable to work."

may leave unanswered:

• unable to do what work?
• for how long?
• under what conditions?
• could reduced hours be performed?
• could remote work be performed?
• could alternative duties be performed?
• when should reassessment occur?

For serious incapacity cases, the employer should seek appropriately detailed occupational-health information while respecting medical confidentiality.

12. Return-to-work examinations

Before terminating an employee for incapacity, a prudent Japanese employer should establish a structured return-to-work process where appropriate.

It may include:

Stage 1

Medical diagnosis and treatment.

Stage 2

Physician assessment of functional capacity.

Stage 3

Occupational physician review.

Stage 4

Assessment of possible duties.

Stage 5

Gradual return where medically appropriate.

Stage 6

Monitoring.

Stage 7

Reassessment.

Stage 8

Decision regarding continued employment if incapacity remains.

This provides a stronger factual basis than relying on a single medical certificate.

13. Confidentiality of medical evidence

Medical evidence is highly sensitive.

HR should distinguish between:

Necessary information

and

unnecessary medical detail.

For example, management may need to know:

"Employee should not work night shifts for three months."

It may not need to know the complete psychiatric history underlying that restriction.

Access should therefore generally be limited to persons with a legitimate occupational or legal need.

14. Burden and quality of proof

In Japanese employment litigation, the party asserting a particular factual proposition must generally provide evidence supporting it, although the precise burden depends on the legal issue.

An employer asserting incapacity should therefore preserve:

• attendance records;
• job descriptions;
• medical certificates;
• occupational physician opinions;
• correspondence;
• return-to-work discussions;
• reassignment possibilities;
• work-performance evidence;
• leave records; and
• relevant work rules.

An employee challenging dismissal may provide:

• medical records;
• treating physician opinions;
• evidence of ability to work;
• evidence of successful performance;
• proposed accommodations; and
• evidence concerning alternative positions.

15. Employer's evidence should not be limited to medical evidence

A common mistake is to treat an incapacity dispute as purely medical.

The court may need to consider:

Medical evidence

Diagnosis, prognosis and functional capacity.

Employment evidence

Actual job duties and requirements.

Organizational evidence

Available alternative positions.

Chronological evidence

When illness developed and when management learned about it.

Performance evidence

Actual ability to perform duties.

Occupational-health evidence

Physician recommendations.

Documentary evidence

Emails, attendance records and HR records.

The legal question is therefore often multidisciplinary.

16. When medical expert evidence becomes especially important

Expert evidence is particularly valuable where:

• doctors disagree;
• the illness is psychiatric;
• symptoms fluctuate;
• disability is not externally visible;
• causation is disputed;
• the employee has a pre-existing condition;
• the employee claims recovery;
• the employer claims permanent incapacity;
• alternative work is disputed;
• workplace accommodation is contested; or
• the medical condition is complex.

17. Practical HR checklist

Before taking incapacity-related employment action, an employer should ask:

Medical

• What is the diagnosis?
• What are the functional restrictions?
• What is the prognosis?
• Has the employee been reassessed?

Employment

• What are the essential duties?
• Can those duties be modified?
• Is alternative work available?

Occupational health

• Has the occupational physician reviewed the case?
• Is a gradual return appropriate?
• Are working-hour restrictions required?

Legal

• Is the proposed action supported by objectively reasonable grounds?
• Do work rules contain an applicable sickness/leave provision?
• Are statutory dismissal restrictions applicable?
• Could disability-accommodation obligations apply?

Procedural

• Has the employee been given an opportunity to provide medical evidence?
• Have competing medical opinions been considered?
• Has the employer documented its reasoning?

18. Key principles from the case law

The six cases and related Japanese jurisprudence demonstrate several recurring principles:

1. Diagnosis and incapacity are different questions.
2. Functional ability is highly relevant.
3. The court considers the employee's actual job and available alternative work.
4. Medical evidence must be considered alongside workplace evidence.
5. Psychiatric illness requires careful assessment of both medical and occupational factors.
6. An employer's knowledge of health risks can be legally significant.
7. Excessive working hours may be relevant to both causation and employer responsibility.
8. A single medical certificate should not automatically determine the employment relationship.
9. Return-to-work and reassignment possibilities may be important before dismissal.
10. A medical expert assists the court; the expert does not decide the ultimate legal question.

Conclusion

In Japanese incapacity cases, medical expert evidence is an important evidentiary tool but is not, by itself, determinative. The court generally has to connect the medical evidence with the employee's actual duties, functional capacity, prognosis, workplace circumstances and the employer's ability to provide continued employment or appropriate adjustments.

The Dentsu Supreme Court decision of 24 March 2000 remains particularly important for understanding the employer's broader duty to protect employees against excessive physical and psychological burdens. The 17 May 2021 Supreme Court decision further illustrates the importance of combining health-related information with working-hours and managerial knowledge when evaluating an employer's obligations.

Accordingly, the strongest incapacity assessment is normally one that answers not merely "What illness does the employee have?", but "What work can the employee safely perform, under what conditions, for how long, and with what reasonable workplace measures?"