Expanding the temp workforce

A revision to the worker dispatch law being prepared by the government would remove the three-year limit on dispatching temporary workers to the same job, thus enabling businesses to keep using temporary staff on a long-term basis instead of hiring regular employees. While the Abe administration touts “diverse ways of work” in the labor market as an important part of its growth strategy, the measure could expand the ranks of temporary workers, who generally have little job security and are paid less than regular employees.

The 1986 law on the dispatch of temporary workers bans the use of temporary workers for the same job for more than three years, except in 26 fields designated as requiring special skills, such as interpretation. The Labor Policy Council, an advisory panel to the labor minister, compiled a report in January proposing that companies be allowed to continue using temporary workers for any job category indefinitely as long as the individual workers themselves are replaced every three years.

Under the council’s proposal, companies would be required to hear the opinions of labor unions when they seek to use temporary workers for a position for more than three years, but unions would not have the power to override companies’ decisions. The government plans to submit a revision bill to the current Diet session so that the new rules can take effect in April 2015.

From the viewpoint of corporate management, workers dispatched on temporary contract from staffing agents are easy to hire, manage and lay off as business conditions change. Current regulations presume that dispatch workers are to be used only to fill companies’ temporary manpower needs.

The council’s proposal undermines the principle of Japan’s long-standing employment policy that permanent employment should be the basic form of employment.

The job insecurity of temporary workers became apparent when large numbers of them were laid off during the global recession that followed the 2008 collapse of Lehman Brothers.

The Democratic Party of Japan, which took power from the Liberal Democratic Party in 2009, tightened regulations on the use of temporary workers in 2012. The number of such workers declined from 2.02 million in 2008 to 1.35 million as of mid-2012.

With the LDP back in power and Prime Minister Shinzo Abe pledging to make Japan “the easiest country in which to do business,” the proposed labor market deregulation skews employment policy in favor of corporate interests.

If the amendment is approved and companies will be able to use temporary workers indefinitely, it’s possible that fewer people would be hired as regular employees and more people would become saddled with poor employment conditions. In addition, the requirement that temporary workers be replaced after filling a position for three years will worsen already poor job security.

The labor council report calls for efforts to get temporary workers hired full-time, but disappointingly leaves it to dispatch agencies to request that companies directly hire temporary workers after they’ve been with them for three years. Dispatch agencies also will be required to provide temporary workers with job training to help them develop a career path, but without an enforcement mechanism this measure may not be effective.

During discussions at the council, labor representatives sought to introduce a rule stipulating that temporary workers assigned to the same task as full-time employees receive commensurate wages. Regrettably, this proposal was rejected in the face of opposition from panel members representing employers.

The planned bill as it stands will likely make Japan’s labor situation worse. The government should rethink its revision of the worker dispatch law with the aim of improving job security and other conditions for the nation’s irregular work force.