Osaka High Court ruling Feb. 7, 2020 (p.92, Rodo-hanrei #1231)

  This case involves a contract employee (plaintiff X), who fell into a depression when her immediate supervisor and the president of Company K, where she was working, rejected her wish to become a full-time employee (or regular employee) of Company K despite her diligent study in the hope of having her wish fulfilled, and the Kyoto Labor Standards Inspection Office (defendant Y), which did not recognize the case as an "industrial accident” (similar to a workplace accident). The first court upheld this decision; however, the appellate court, or second court overturned the ruling and found her depression to be an “industrial accident”.

1.Discrepancies in the judgments
  Similar to Y, the trial and appellate courts adopted the administrative rules concerning industrial accident certification (criteria for certifying mental disorders due to psychological burden H23.12.28, No. 1226.1, "Certifications Standards") as the basic rule for certification standards to be used in litigation for mental disorders caused by psychological stress. Therefore, the same rules Certification Standards) applied in the proceedings involving Y, the trial court and the appellate court.  In other words, there is no discrepancy in judgments with respect to the applicable rules used by the respective tribunals.
  As such, the question becomes what the difference is in the judgments between the two courts.
  From a technical perspective, Y and the first court both found that X’s stress only reached the level of stress cause by being merely informed by her supervisor of her personnel evaluation, etc. (therefore, the stress level was considered "weak"), whereas the second court found that X’s stress was at the level caused by being told by her supervisor and the president that her contract had been terminated (hence, a "strong" level of stress).  In other words, the two courts reaching different findings when applying the certification standards (left (c) of p.107, Rodo-hanrei #1231). 　
  However, from the more substantive and realistic view points, the second court emphasized ① that there was no other cause for X's stress, ② that X, who had worked hard even though she was a single mother raising her children, believed that she could become a full-time employee based on the words of K's president's, which motivated her study hard for more than 1000 hours to become qualified. Despite this, X's supervisor and the president denied X's wish.  Considering the background of X, who had been raising three children by herself while still studying and changing jobs and advancing her career, it should be very shocking that her hope of becoming a full-time employee at a well-known company of high repute by studying hard was dashed (see "2 certified facts", p.99). Judging solely from the perspective of X's stress, X's supervisor and the president may not have been able to understand X's thoughts; however, the stress suffered due to X's work situation can definitely be regarded as the cause of her depression. In this sense, the decision of the second court is understandable (the court explained that other workers may also be suffered if he/she is in the same situation; left (D) of p.107).
  Nevertheless, some may argue that X’s thoughts about becoming a full-time employee at K is not attributable to work-related stress, but rather to external circumstances outside the workplace and her individual traits, the circumstances of which are beyond K’s ability to control. It therefore seems strange to recognize the stress is caused by her work at K. Even if the Certification Standards provide a framework for determining a cause-and-effect relationship taking into consideration workplace stress, stress outside the workplace, and individual weaknesses, it is reasonable to argue that circumstances outside the workplace and individual weaknesses greatly magnify the impact of workplace events, such as losing the chance of becoming a full-time employee.
  The background circumstances underlying her reason for working hard and its serious stress might be seen in light of the certification criteria as a complex issue that involves not only work-related stress but also stress outside the work place as well as her personal attributes.  If these are considered as factors that magnify work-related stress, I think that a comprehensive judgment should have been made after considering the stress as a problem related to workplace outside the work place and her personal attributes, i.e., a negative cause-and-effect relationship (job-related).
  Although I have been asked how this case would turn out, unfortunately I cannot answer because I have not seen all the litigation records.
  Under the comprehensive judgement, the extent to which the impact of work stress is reduced depends on the level of stress outside the workplace and on the individual's attributes.  If an employee wants to work on a long-term basis as a full-time employee and a company encourages an employee to become a full-time employee (although this may not involve malicious intent), and if the company destroyed the trust (although this may not involve malicious intent), the company may not be able to reduce the impact of work stress.  In fact, the court found that X did not have a prior Psychiatric history, so in this sense, the reduction in the influence of work-related stress is not significant.     However, since the court gave practically little consideration to X's stress in her personal life (see (c) of p.107), certain aspects of the impact of stress on her private life is not well understood.  Therefore, there is a possibility that the cause-and-effect relationship between the stress of job and her depression (job-related) may be denied.
  In this sense, even if the court's finding of the cause-and-effect relationship (job-related) may not ultimately be an error in itself, I believe that the second court should nonetheless have made a comprehensive judgment after examining more closely the impact of X's stress on her private life.

2.Practical points
  From this point of view, it is possible to think that the second court’s decision of the cause-and-effect relationship (job-related) is laxer than that of Labor Standards Inspection Office Y or the first court.
  However, there are several recent lower court cases in which a cause-and-effect relationship (job-related) has been found; however, the company was not found to be negligent from the viewpoint of civil liability. From this perspective, solely considering the problem of a cause-and-effect relationship (job-related), we may conclude that the judgment of the second court was not so wrong, and that even if X’ supervisor or the president did not know X's circumstances or did not give sufficient consideration to X's assumption, it should be judged based on the existence of negligence (existence of breach of a duty to foresee or breach of a duty to avoid).
  I don't know if this case is also being disputed in civil litigation, but if so, I would like to look at the judgment on the cause-and-effect relationship and error.

※  Japanese original version

※　Among the Japanese case law books relating to labor and employment law, the Rodo-hanrei is the oldest and most prestigious, having been published since 1967.

※ I am a facilitator of a monthly study that covers all cases in the Rodo-hanrei, at the Japan In-house Lawyers‘ Association, JILA in Tokyo and Osaka. This series of articles are the result of the study group.
※ This series has turned into a book, from the publisher of Rodo-hanrei! So this series of study and articles are recognized as the most reliable guidebook!