The Lower House on Aug. 2 passed a bill to make it obligatory in principle for enterprises to keep employing through the age of 65 all workers who want to continue to work after reaching the mandatory retirement age of 60. The bill is aimed at securing employment for such workers until they start receiving pensions. In fiscal 2013, the age at which people will be entitled to receive pension will begin rising in phases from 60 to 65.

The bill is to revise the 2006 law for stabilizing employment for elderly workers. That law has a provision allowing enterprises to decide which employees to keep on if labor and management reach an agreement on the point. The new bill will abolish this provision, but it is not without problems. It will put off the complete abolition of the provision through 2025. This runs counter to the central aim of the bill.

Under the bill, enterprises will be allowed to transfer workers who have turned 60 to affiliated enterprises. The downside to this is that there is a possibility that affiliated enterprises could be located in distant regions, offer completely different jobs or poorer labor conditions. Such conditions may cause such workers to quit.