An employer needs a justifiable reason to fire an employee.
Such justifiable reasons will include

• 1) a lack of ability because of health or otherwise and a lack of qualifications,
• 2) misconduct, and
• 3) operational necessity.

The grounds should be judged appropriately on general social terms.

There are case laws in Japan indicating justifiable reasons for legally terminating the employment.

If an employee lacks ability to do the job, the employer is required to take measures to educate him/her to overcome the inability. In the case of misconduct, the court normally looks into the circumstances of the misconduct, such as the frequency and seriousness, if the employee has shown remorse, and the effect of the misconduct on the business of the employer.

As for grounds to fire employees, please seek for professional advice from the Japanese legal aspects of the labor law to avoid future disputes.