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Abe’s work-style reforms give Japan’s employers the green light to demand unpaid and unsafe overtime

by Hifumi Okunuki

June 29, 2018: The law deemed to be the foundation of Prime Minister Shinzo Abe’s much-vaunted reform of how we work, or hataraki-kata kaikaku, passed the upper House of Councilors on this day. Most of its provisions, which simply amend other laws, will come into effect next April, so it’s crucial we get a handle on them now.

The media bandy about the phrase “hataraki-kata kaikaku” (often translated as “work-style reform”) as if it will save workers in Japan from the soul-crushing, death-defying work hours of workplaces past. But how will this new law really change the workplace? It’s crucial that we know what’s in it and how things will change from a legal perspective; then perhaps we can ponder what Abe’s objectives are in pushing it through.

The Act to Overhaul Laws to Promote Workplace Reform (Hataraki-kata Kaikaku Kanren Ho) does not include an expansion of discretionary labor, one of many ways employers evade paying overtime. Abe’s team had to exclude that, thankfully, after the labor ministry got busted manipulating data, as I described in a column earlier this year (“Dodgy data spared Japan’s workers from a labor system that’s ripe for abuse, for now,” March 25¥).

The loudest voices calling for hataraki-kata kaikaku have been corporations, management and their consultants, not labor. This fact alone gives us the first indication of who this law is for. Yet the ones who will be most affected are of course us workers.

The law consists of 30 articles that amend other labor laws — the Labor Standards Act, Labor Contract Act, Employment Measures Act, Work Hours Setting and Improvement Act, Industrial Safety and Health Act, Act to Improve Employment Management of Part-Time Workers, and the Worker Dispatch Law. This list gives an indication of the law’s extraordinary breadth.

The following is an inexhaustive list of the biggest provisions, with my cynical commentary attached:

a) Sets (life-threateningly high) cap on overtime hours in Article 36 of Labor Standards Act.

b) Claims to alleviate the disparity between regular and irregular workers (new law: Part-Time Fixed-Term Act).

c) Creates a high-level professional system (newly branded white-collar exemption inserted into Article 41, paragraph 2 of Labor Standards Act; another way for employers to avoid paying overtime)

d) Compels employers to force employees to take paid holidays (Article 39, Labor Standards Act; jury is still out on this one).

e) Urges employers to set up minimum night-morning turnaround times (Article 2 of Work Hours Setting and Improvement Act; note that it “urges,” not “requires”).

f) Upgrades Worker Dispatch Law (Articles 26 and 30 — we’ll see).

The law’s complexity is such that different parts will come into force at different times, and corporations will be affected at different periods depending on their size. For the most part, large firms will become subject to the law next April, with small ones subject from April 1, 2020. But drivers, construction workers and doctors won’t see any change until April 1, 2024.

The Ministry of Health, Labor and Welfare states that the law has three objectives: 1) comprehensive and continuous reform of the workplace; 2) reducing long work hours and making work more flexible and diversified; and 3) securing fairness of conditions regardless of employment form. The last two are controversial among commentators.

Who is asking for “making work more flexible and diversified”? The vast majority of workers have demanded shorter work weeks, not flexibility.

Eighteen-year-old Matsuri Takahashi’s suicide from overwork at ad agency Dentsu back in 2015 (see “Time to consign ‘death by overwork’ to Japan’s history,” Labor Pains, Oct. 23, 2016) turned the spotlight on Japan’s brutal, at times deadly, work culture. Even Abe found it prudent to touch upon Takahashi’s death during a policy speech in January 2017: “We will endeavor to reduce long work hours with a firm commitment to never repeat this tragedy.”

If Abe were at all serious about such a commitment, though, he would have said “eliminate” not “reduce” long hours. Another key word used in the speech, “flexible,” sounds lovely, except that in this context it means a complete release from all responsibility for the employer.

One manifestation of this so-called flexibility is the return under a new name of the notorious white-collar exemption — the high-level professional system, aka the kō-puro (top pro) — which effectively eliminates all caps on and even payment for overtime work for those making more than three times the average income in Japan (currently that works out to ¥10.75 million a year).

On how that will reduce our work hours, Abe remains coy. What is urgently needed now to save workers from overwork and possible death from said overwork is stricter enforcement of current work-hour laws, not deregulation, not “flexibility.”

The kō-puro system will release employers from all restrictions on work hours, and you can bet that soon we will hear of the need to lower the threshold from three times to twice the average annual salary, and so on.

The a) above refers to a new limit on overtime hours. Currently, employers cannot have workers work more than 40 hours per week or eight hours per day. Overtime is illegal unless there is a written agreement between management and the workforce to allow more hours. Those hours must be paid at time and a quarter, and there is currently only a guideline that suggests limiting overtime hours to 45 per month.

The new law sets a cap of 45 hours for normal months, but 80 and even 100 in some “special” months (see “Overtime deal marks total capitulation by labor,” Labor Pains, March 26, 2017). Proponents of the law (including my union federation, Rengo) note that it is the first time since the Labor Standards Act was promulgated in 1947 that there is a firm limit on the number of permitted overtime hours — even if that limit is 100 hours, or more than the health and labor ministry’s 80-hour threshold for danger of death by overwork. Hey, it’s a first step.

No, it’s not a first step. Going from a soft guideline of 45 hours per month to a firm limit of 100 hours is not a step forward. Every corporation will suddenly discover “special months” during which they must have their workers stay 100 extra hours in a single calendar month. And they would be in full compliance with the law, no longer even violating any guideline.

Last year, average (officially reported) monthly overtime, according to the ministry, was only 14.6 hours. My point here is that few workers put in 100 hours overtime in reality, so what is the rush to set up an insane 100-hour limit? I can only imagine that the purpose is to increase not decrease our work hours.

Under the new regime, a company can make you work 99 hours of monthly overtime and not be held responsible for injury or illness caused by overwork. As we will see, courts currently do hold employers responsible — even for death, and even when overtime hours were far below this cruel 100-hour line.

While working long, hard hours at Miyako Shop and Restaurant in 2012, a salesman collapsed. His heart had stopped and he died instantly. Miyazaki Labor Standards Office denied his surviving family’s industrial accident claim, so they sued the LSO. The Fukuoka High Court ruled on Aug. 23, 2017, to uphold a lower court’s ruling that recognized that his work caused his death, even though his average monthly overtime hours, which totaled 56, sat far below the karōshi (death from overwork) line of 80. The court recognized that in addition to such brutal hours, the deceased had had to deal with customer complaints, frequent business trips and other high-stress factors that eventually cost him his life.

So, Japan is moving from a situation where 56 hours of monthly overtime can be ruled illegal by the courts to one where this will no longer be feasible, because the law will clearly state 100 hours as the limit — a limit above the karōshi line.

This is a good first step for management to increase the work hours of their employees. For the rest of us, it’s a first step backward.

Hifumi Okunuki teaches at Sagami Women’s University and serves as executive president of Tozen Union. She can be reached at tozen.okunuki@gmail.com. Labor Pains appears in print on the last Monday of the month.

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