The Diet on Friday approved a controversial bill that will allow companies to use temp staff indefinitely if they switch them every three years, defying criticism that it will confine workers to unstable jobs throughout their careers.

The bill to amend the worker dispatch law, seen as the key first step in labor market deregulation under Prime Minister Shinzo Abe's growth strategy, has sparked an outcry from the opposition and labor unions that maintain the removal of a term limit will worsen conditions for temp workers. There were over 1.2 million such workers across the country as of June last year.

The legislation, which cleared the Diet with support from the ruling Liberal Democratic Party and its coalition ally, Komeito, will take effect on Sept. 30.