Terrie's Take 922 - Dealing with a Rogue Employee in Japan, e-biz News in Japan

Terrie's Take terrie at mailman.japaninc.com
Mon Nov 13 10:10:34 JST 2017

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.

General Edition Sunday, Nov 12, 2017, Issue No. 922

- What's New -- Dealing with a Rogue Employee in Japan
- News -- Tweaking China's nose in Philippines?
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Traditional houses in Kyoto, traditional restaurant in 
- News Credits

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Dealing with a Rogue Employee in Japan

It's tough being a foreign businessperson in Japan. Unlike our Japanese 
colleagues, we don't have a support network that stretches back to High 
School or University, and thus when confronted with new or difficult 
challenges we're often left in a lonely and uninformed position. Turning 
to your local staff for advice is one possible source of know how, but 
what do you do if it's a staff member who is the cause of the problem? 
Then things become doubly awkward...

It's for this reason that I offer to act as a sounding board for other 
foreign business people in Japan. I don't charge for doing so, unless 
the interaction is becoming time-consuming, and instead consider it a 
chance to "pay it forward". With 34 years of employing staff in Japan 
and having hired well over 1,000 people, I've had the opportunity to see 
a wide range of employee mis-adventure: deaths, accidents, severe 
illness, run-ins with ex-wives (and husbands), jailings, theft, sexual 
harassment, power harassment, and business sabotage.

In case you're wondering about this list of mis-adventures, I actually 
have a very nice group of employees to work with. I would say that less 
than 1% of the staff I've ever hired have had deep personal problems. 
Unfortunately, foreign companies, with their less intrusive management 
style do seem to attract more people who have trouble fitting into a 
regular Japanese firm, and some of those people can be a bit extreme. 
That said, at 1%, we are still only talking about one rogue person every 
few years for a typical SME with 10-20 staff.

So this brings us to the situation a friend is having at the moment. The 
short background is that he was employing an independent contractor (in 
itself an awkward employment arrangement, though not illegal if 
documented and handled correctly) and this person was posted to a 
multinational corporation to be part of a global support contract. The 
reporting manager in the client corporation is new and not really 
competent and my friend's contractor guy managed make himself invaluable 
to this new manager - helping to hide the incompetence.

As you could imagine, this allowed the contractor to embed himself at 
the client's workplace to such an extent that it triggered an ambition 
by him to move into that company directly, even though his contract 
forbids it. Yes, this is allowed by Japanese labor law (freedom to seek 
employment), but it is also a gross breach of trust. Worse still, the 
way he is doing it is to try to get my friend's company kicked out - 
which he appears to have achieved through a series of clever 
manipulations. It's really a nightmare scenario for my friend - as he 
faces the prospect of not only losing the contract but also having his 
business reputation blackened.

This is a particularly nasty case, and my guess is that things have 
already gone too far to retrieve the situation. However, when I look at 
how he got into this predicament, I see some familiar patterns that I 
would have warned him about before, because years ago I was in a similar 
situation  myself.

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[...Article continues]

1. Confusing friendliness with friendship. In business, it's great to be 
friendly with your staff. I certainly don't want sad sacks around my 
office and I make an effort to keep a good positive environment there - 
mostly by hiring positive people. However, being friendly and being 
close friends should not be confused in a business relationship. 
Unfortunately my friend had a soft spot for his new contractor, and made 
a big effort to help the other fellow out - arranging a visa (yes, the 
contractor is non-Japanese) at short notice, personally providing him a 
place to stay at the beginning, lending him money, and generally helping 
him get on his feet. In doing this, my friend felt positive enough that 
he decided not to bother with a formal contract, and instead just paid 
the contractor on a monthly basis. This is a huge "no-no" since it 
didn't set responsibilities in the relationship, and furthermore helped 
to create an entitlement mindset in the contractor.

Labor contracts are not really binding in Japanese labor law, especially 
those clauses that contravene certain rights, but they do help focus the 
employee, and they should carefully spell out what is acceptable 
behavior and what is not. When it's in writing, it takes a much more 
determined individual to willfully breach it.

2. Not managing the client relationship. It is tempting when you 
dispatch someone to a client, to forget about them and the client, and 
to get on with the next piece of business. But as I've found out in my 
own outsourcing businesses, if you don't spend time actively managing 
both your onsite staff and clients, you will eventually have a nasty 
surprise waiting. It's human nature to not want the involvement of a 
middleman, and despite any value you may be bringing to the table, if 
you are not visible to either party you become that unwanted middleman 
that everyone wants to cut out.

My personal rule with clients is to visit them regularly, at least every 
3 months, and to reach up as high in the company as I can get - so that 
I have access to a senior manager at short notice if things don't go 
well. For contract employees, I work on managing their career, seeking 
to connect them with the mother ship (us) as much as possible - through 
informal parties, training, employee awards, etc. I also used to move 
contractors I'd like to keep, around every 2 years, so as to be 
compliant with part-timer/contractor laws. If for some reason I can't 
move the person, then I  learned to expect that I may lose either them 
or the client in due course. In my friend's case, after the contractor 
had declared war his options were extremely limited because he was 
unable to talk to anyone higher up the food chain at the client, and 
thus he was unable to rebut the widely distributed accusations and 
vitriol directed at him by the two plotters (the contractor and the 
incompetent manager).

3. Not acting quickly enough. When someone you trust betrays you in an 
aggressive and blatant way, it takes you by surprise and most normal 
people need time to process what just happened and decide what to do. In 
particular, most people want to avoid confrontation and so try to 
negotiate with the employee, hoping to resolve things before they get 
out of hand. The problem is that if you are dealing with a cold-blooded 
planner, or, worse, someone who has built up a heated grudge against 
you, there may be no negotiation. Some people only identify with winning 
and making the other person "pay" for real or imagined transgressions. 
When I first heard my friend's story and some of the accusations, lies, 
and actions being perpetrated, I recommended him to let the guy go 
immediately. However, my friend really wanted to believe that he could 
work things out and that things would normalize. Unfortunately they didn't.

4. Not understanding naked ambition. When someone is going for a home 
run and is willing to hurt another person, especially if they have 
fueled their ambitions with a grievance, then they have probably already 
crossed the line between whether lying is OK or not. This happened to me 
years ago, when someone who was sales manager of a company I'd bought 
stayed back late one night and downloaded the customer database, right 
before they gave notice and secretly started a competing company! Her 
motivating grievance was that our transition manager was too pushy 
towards her (they'd been working together for several months - since the 
due diligence phase), and so she claimed she was being "forced" out of 
the company by him. This despite the fact that she was the top 
salesperson by far, and we had no intention of firing anyone who was 
performing at that level. Anyway, for her, that justified taking the 

5. Not documenting the situation. For the contractor's audacious plan to 
work he had to turn the client company against my friend. So far, he has 
done so with stunning effectiveness and my friend is simply bewildered 
at how this could possibly be happening. However, as with any properly 
managed relationship, if one party wants to build up a grievance and the 
other party is doing their part correctly, that means the only path to 
successfully turning a client is to lie about the party you want to cut 
out. Lie about their terrible management, their alleged non-payments, 
their bullying, whatever other mud you can come up with. Well written 
lies can get great traction, and really the only way you can undo the 
damage is carefully documenting the timeline, the conversations, and 
refuting the lies with proof.

The problem is that my friend was so upset by what was going on that he 
decided to remove all emails relating to the contractor from his 
account, so that he wouldn't have to be reminded on a daily basis about 
the situation. While this sounds illogical, but I can assure you that 
the psychic pain of being attacked and falsely accused can indeed make 
you wish the person out of your life, and taking them out of your email 
box doesn't seem like such a bad idea.

So what can my friend do about this rogue contractor? He could try 
taking the guy to court, but without meticulous documentation proving 
his machinations, it's unlikely that any lawyer would take on the job. 
And even if he did find a lawyer, he would still have to pay the court a 
50% bond (50% of the damages being sought) for the duration of the case 
- which could take anywhere from 12 to 60 months!

Instead, if he wants justice and wants to be heard, a more expedient 
measure could be to withhold the contractor's last salary and the 
severance pay, and see what happens. The contractor will either consider 
that he is well enough ahead with his new full-time position and won't 
feel the need to pursue a court case, or, he will pursue it, or he will 
go to the Labor Standards Office. Either way, my friend will then have 
an authoritative audience to show his evidence to, and those bodies have 
the power to reduce or remove the final payments. Usually, they will 
split the disputed amount mid-way, since they love to find a compromise. 
But thorough documentation is the key here.

About ten years ago I had a Japanese contract employee who while drunk 
punched out a taxi driver. He was arrested and thrown in jail for two 
weeks until he paid redress to the driver. During this time the police 
seized as evidence his keys to a our client's server facility, and we 
couldn't get these keys back during that time, even though they are 
supposed to be returned to the facility every 24 hours. As a result, we 
almost lost the contract and that prompted me to fire him while he was 
still in jail. I offered a month's salary as severance.

Unfortunately for me, the contractor decided that it was unfair to be 
fired, and took me to court. After getting a lecture from the judge 
about public behavior, the contractor hit on a brilliant 
counter-strategy of claiming that he was actually a full-time employee 
instead of an independent worker (despite invoicing me from his personal 
company on a monthly basis for at least 4 years before that), and 
therefore he should not have been fired for the incident. The judge 
unexpectedly changed his mind on hearing this and started sided with the 

It was at this time that I learned that Japanese courts work in strange 

Nonetheless, I did have meticulous documentation, and I was able to 
insist that the contractor's employee claims were spurious and 
sidestepped the real problem, which was that he was violent and had 
caused real harm to our company. I was in fact REALLY insistent about 
this, and at one point even asked if it was legal if I could blog about 
the case. The judge then decided to kick the case "upstairs" to the High 
Court. The contractor's lawyer, seeing that a High Court case might take 
another 5 years (conservative estimate) to resolve, and seeing how well 
prepared we were, advised his client to take what I had offered and cut 
his losses.

The point of my story is that having detailed documentation gave me the 
moral authority to try to regain control of the courtroom narrative, 
which in the end resulted in a fair and reasonable settlement.

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+++ NEWS

- Tweaking China's nose in Philippines?
- Where are the stock markets going?
- New manga drawing app
- Major banks looking at major cost-cutting
- Current Account surplus surges partly thanks to tourists

=> Tweaking China's nose in Philippines?

Japan has agreed to build four coast guard radar stations for the 
Philippines, between that country and Indonesia. Although nominally 
intended to cover the Sulu and Celebes Seas, the radar stations are also 
well positioned for Over the Horizon (OTH) scanning of the Spratly 
Islands - the location of China's recent island reclamation activities. 
The two parties don't say whether the four stations will be OTH or not, 
but given that both seas extend more than 200km from the intended radar 
station locations, it would make sense that the units will be 
sophisticated enough to cover the entire region. ***Ed: This is the 
first part of a longer-term effort to improve Japanese influence in the 
Philippines. Maybe we can expect a relaxation of visas and tourism to 
Japan again in the near future as well?** (Source: TT commentary from 
abs-cbn.com, Nov 11, 2017)


=> Where are the stock markets going?

Stock markets both in Japan and Europe turned jittery on Friday, after 
the Nikkei share average fell 0.8% on Friday. This still left a 0.6% 
gain for the whole week, and was still close to the 26-year high of 
23,382.15. Stocks losing the most value were Toshiba at -5.1%, 
Bridgestone at -7.7%, and Kumagai Gumi -13.7%. Most of the losers had 
operational problems that impacted their core businesses, such as 
Toshiba's nuclear exposure and Bridgestone's increased raw materials 
costs. ***Ed: Europe had a much steeper fall later on Friday, which 
reinforces the nervous stance of the global markets. Events like this 
are also one big reason why Japanese companies have so much cash piled 
up.** (Source: TT commentary from brecorder.com, Nov 11, 2017)


=> New manga drawing app

Publisher Shueisha has just released a manga drawing app call Jump 
Paint, which is themed around the popular Shukan Shonen Jump manga. 
Users get insider tips from famous manga authors, such as "One Piece" 
author Eiichiro Oda. As a free app to start with, Jump Paint is already 
a hit and has already been downloaded 500,000 times. ***Ed: Shueisha is 
using a freemium strategy similar to popular games, and providing 
additional painting tools for an in-app subscription fee.** (Source: TT 
commentary from the-japan-news.com, Nov 11, 2017)


=> Major banks looking at major cost-cutting

Mizuho Financial Group has said that it will consider cutting up to one 
third of its workforce, about 19,000 jobs, in an effort to reduce costs 
and increase efficiency over the next 10 years. Although most of those 
jobs will be lost through attrition, it also means that there will be 
significantly less branches (about half of the current 800) and staff 
manning them in the late 2020's. *** Ed: Of the three major city banks, 
Mizuho has had the biggest fall in profit, about 35%, and so the 
restructuring is not unexpected. However, it seems that both Mitsubishi 
UFJ and Sumitomo Mitsui also have plans to cut thousands of jobs over 
the next 3-5 years.** (Source: TT commentary from bloomberg.com, Nov 10, 


=> Current Account surplus surges partly thanks to tourists

The Finance Ministry has released data for the Apr-Sep period, 
indicating a surge in Japan's current-account surplus, of about 
JPY11.5trn, up 11.7% over the same time last year. This is in fact the 
highest surplus for the last 10 years (since FY2007). Although most of 
the amount was due to favorable trading conditions for Japan's largest 
manufacturers, the travel balance also made a substantial contribution, 
with a 25% increase over last year, to JPY842.9bn. According to JNTO, 
over the first 6 months of the fiscal year there were 14.66m tourists, 
also a record for the country to date.*** Ed: Wonder if Japan's 
statisticians are taking into account the profit surges at JR and other 
major firms, thanks to foreign tourists? Would be good to see an 
up-to-date study on their influence on the greater economy.** (Source: 
TT commentary from asia.nikkei.com, Nov 9, 2017)


NOTE: Broken links
Some online news sources remove their articles after just a few days of 
posting them, thus breaking our links -- we apologize for the inconvenience.



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paired with delicious Kanto cuisine while relaxing on the grass and 
listening to a live lineup of well-known Japanese musicians!

Japan Travel is organizing a tour to the festival on Saturday, 18th 
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None this week.



=> Nakano House Project, Kyoto
East meets west in this stunning Kyoto creation

It is not often that you can combine two cultures without losing the 
essence of one. The Kiraku accommodation project does this effortlessly. 
In a response to the gradual deterioration of Japan's distinct 
architectural heritage, Kiraku aims to provide traditional Japanese 
lodging equipped with all the amenities of luxury western style 
accommodation. Kiraku has recently developed two properties available to 
guests who want a traditional Japanese experience without having to 
forfeit the luxuries of home.

Wedged between the Kyoto Imperial Palace and the Nijo Castle in the 
bustling heart of downtown Kyoto, the Nakano edition of the Kiraku 
project sets new levels in terms of automation and privacy - guests are 
issued with a code that will unlock the front door and from that point 
onward this house becomes your home.

The primary floor of the house features a marvelous pebbled genkan, the 
part of the Japanese home where guests remove their shoes before 
proceeding to the next room. The genkan at Nakano house is significantly 
larger than those found in traditional Japanese dwellings and provides 
adequate cupboard space for those traveling with a significant amount of 


=> Restaurant Washoku Yohira
Seasonal Nagasaki cuisine in a traditional setting

Shianbashi is Nagasaki's entertainment district and it is filled with 
restaurants, bars, and clubs. Washoku Yohira is hidden down a narrow 
cobblestone alley that is off to the side of one of Shianbashi's main 
streets. Seeming a world away from the surrounding neighborhood, this 
wonderful restaurant serves traditional Nagasaki cuisine based on 
seasonal ingredients.

Upon passing through its gate, visitors walk through a quiet garden 
before entering a lovely 140-year-old building. Inside are 17 different 
rooms, some of which are used for general dining and others are for 
private use. Some look out onto their own mini gardens. Although 
elaborate and delicious, meals are extremely reasonable. The 'Rindou' 
lunch that I enjoyed cost around ¥2000. Dinner sets start around ¥5000.




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Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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