Faced with criticism from opposition parties and labor groups, the Abe administration has canceled plans to grant firms in special economic zones easier rules on dismissing employees, according to sources.
A working group on special economic zones had considered allowing companies to set specific terms for dismissals in employment contracts as a way to encourage foreign-affiliated firms, startups and others to hire more workers.
Critics said this would only make it easier for companies to fire workers. Whether such rules would be constitutional was also very much in doubt.
The administration was to hold a meeting of its economic revitalization headquarters as early as Friday to present a draft for special zones in hopes of getting a bill ready by next month.