> The reasoning being, if you continued to pay the employee during the term of their employment, and you knew that the employee was not performing based on some KPI or some yard stick, you would issue warning to the employee to improve their performance, or you would fire the employee on the spot. Continuing keep an underperforming employee is giving tactic consent that their work is reasonably acceptable because if it wasn't, you would start disciplinary action or cease their employment.

We're talking about an employee on a fixed term contract, so there's not really any scope for disciplinary action of the "performance improvement plan" type. And the argument would be that they were hired because of a time-sensitive job (hence the need for this kind of irregular employee) and so just not paying them for work doesn't make the company whole, they needed someone to do that work at that specific point in time and if not then they have damages that are much larger than the salary they would've paid.

Of course by the time you get to court you can poke several holes in this argument. But under Japanese law it's a valid argument on its face, so it's something the employer can use to threaten.