In a judgment of October 29, 1979, in the Tōyō Sanso case, the Tokyo High Court set out four requirements for dismissing workers for economic reasons.
The employer must show a business need to reduce staff and a sufficient effort to avoid dismissals. The choice of who goes must be reasonable, and the employer must explain and consult with the workers or their union. A case summary of the Ministry of Health, Labour and Welfare lists the efforts: limits on overtime, a stop to new hiring, cuts in allowances, and transfers and secondments.