Possible new labor rules law

Possible new labor rules law

Back in September last year, the Japan Times carried a valuable series of articles on the findings of a labor ministry study group which is working on redefining the labor standards law. The group is apparently focusing on increasing the importance of company-specific labor contracts, versus the nation-wide labor law, with the effect that it will make it easier for employers and workers to agree to conditions that are normally prohibited. It's hard to say whether this is a good thing or not for employees, but it will certainly make conditions clearer.

On the positive side of the ledger for employees, the group is trying to ensure certain standards of conduct, which until now were up to the employer to decide. These include precluding employers requiring a job transfers to a different location without an employee's consent, removing bans on employees holding a second job, and causing part-timers who are on an open-ended contract (no termination date) to be automatically upgraded to full-time status.

Another interesting provision is that under certain conditions, such as an employer wanting to change the terms of a labor contract, an employee will also be allowed to retain their job, even while they may be embroiled in a court dispute with an employer.

On the negative side of the ledger, are some things which will have the labor unions (such as Rengo) up in arms. These include the ability for employers to terminate contracts at their pleasure by paying a monetary fee. Currently it is quite hard for an employer to fire someone who has done nothing wrong and who doesn't want to go. In particular, the new rules will allow employers to define labor contract terms which are worse than the national labor standards now in place. Other provisions seem to include offering terms and conditions which are less favorable than are currently defined in the labor law or which have been standardized through prior case law in the courts.

Other aspects of the recommendations from the group include hiring guarantees when a job offer is made, even informally, and collective bargaining between employees and management in a company without a union.

It's hard to say why the Labor Ministry has decided at this point to start making radical changes to the labor law, especially now that employment in Japan has recovered along with the economy. It seems that one reason, though, is that they are worried about the increasing trend of companies to hire part-timers and contract workers rather than full-time staff. Since such employees fall outside many of the provisions of the labor law, they are unprotected. Right now there are more than 20 million Japanese workers - about 30% of the overall total - who are part-timers or contract employees. Making it mandatory for companies to at least provide such people with labor contracts with clearly defined terms and conditions would improve their working conditions.

The Labor Ministry is apparently planning to put the panel's findings before Keidanren (the employers) and Rengo (the unions) this year, and submit the results to parliament to be made law in 2007. I expect that we'll all be hearing a lot more about this over the next few months.