It is billed as a “reform toward creative and highly productive ways of work.” The Abe administration is pushing to exempt certain kinds of workers from the work-hour regulations under the Labor Standards Law as one feature of its economic growth strategy to be adopted later this month. What are missing from the discussion are the viewpoints of workers and the labor organizations that represent their interests.
The Labor Standards Law limits the work hours of employed workers to eight hours a day and 40 hours a week, and requires employers to pay overtime wages when employees work beyond these limits, with the exception of those in managerial positions. The administration’s plan calls for lifting the limits on certain categories of workers so that they will be compensated on the basis of their work performance, not the hours they spend in the office.
Prime Minister Shinzo Abe, who with his pro-business agenda has targeted labor regulations as obstacles to improvement in the competitiveness of Japanese companies, denies that the plan is meant to cut overtime costs for businesses. In ordering the government’s industrial competitiveness panel to review work-hour regulations, Abe said the workers themselves would choose whether to be exempt from the work-hour regulations.
The new system would only apply to highly skilled workers with a clearly defined scope of job assignments, and measures would be taken to ensure that it does not result in wage cuts for them, he said.
Details of the new system will be worked out at the Health, Labor and Welfare Ministry’s panel on labor policy. The government plans to submit a bill to the Diet next year for revising the Labor Standards Law.
A tentative plan agreed on by Abe’s Cabinet members will make the new system applicable to workers with annual salaries of more than ¥10 million — who account for roughly 4 percent of Japan’s corporate employees. The government appears to be trying to dispel public concerns by narrowing the scope of workers who can be covered by the proposed system.
But concern lingers that once the system is introduced, such restrictions could be eased in the future. Behind the Abe administration’s plan is a view within the business sector that the current work-hour regulations are meant for blue-collar jobs in which employee output reflects the number of hours worked — not for white-collar jobs in which output is not in proportion to the time spent in the office.
Proponents of the labor deregulation argue that an inefficient employee can be rewarded with extra pay for working overtime to finish a job that a more efficient colleague may finish within regular hours. The proposed system would benefit efficient workers, who can go home once they get their assignments done, and will reduce the chronically long hours many company employees log because they won’t be rewarded for the extra hours they spend in the office, supporters of the measure say.
Some of these arguments appear to make sense. But opponents say the opposite — that the proposed system would only exacerbate workers’ long working hours because employers would no longer worry about the extra cost of overtime pay.
Given that it’s the employers who assign work loads as well as evaluate the performances of their workers, the system could be abused by unscrupulous companies that would force their employees to work until they complete their assignments without overtime pay, critics say.
In addition to the exemption from work-hour regulations, the Abe administration is considering expanding the scope of the so-called discretionary labor system, in which certain employees are “deemed” to have worked for the number of hours established under a labor-management accord and would not be paid extra for working beyond these hours. The system is currently applicable to certain job categories such as research, planning and product design, and development — the nature of which demands that work methods and time management be left to the discretion of employees. Businesses have been pushing to make the system open to other categories of workers such as salespeople.
The government is said to be mulling whether to expand the scope of the system. However, there is persistent criticism that the discretionary labor system is often abused by companies to get employees to work long hours without overtime pay.
One key question is whether corporate employees to be exempt from the work-hour regulations would in fact have control over their job assignments and discretion over when and how they work. Workers who are not given such discretion could end up working excessively long hours unless they’re protected by the work-hour regulations.
The Health, Labor and Welfare Ministry, which initially resisted the proposed deregulation, has sought to limit the system to jobs requiring highly specialized skills in which workers’ performance can be objectively assessed, whereas the Economy, Trade and Industry Ministry — which led the drive for the work-hour deregulation — is said to have argued that no such limits be included.
Businesses reportedly have lobbied to apply the exemption to a wider scope of workers such as middle-ranking employees — just below management level — who are assigned tasks such as management planning and product development. The health ministry believes, however, that many of the workers in this category at Japanese firms do not have much control over the volume of their work or their hours.
When Abe pushed for a loosening of work-hour regulations in his first stint as prime minister between 2006 and 2007, he had to abandon the attempt in the face of stiff opposition from labor organizations and the opposition camp. This time the prime minister has taken the lead for moving discussions on the issue forward at venues where representatives from the labor community are absent.
Proponents of work-hour deregulation say the new system should be applied to as wide a scope of workers as possible to have an impact on the economy. But what should be considered first and foremost is the proposed system’s impact on workers’ health and their livelihood.