The Lower House passed a bill Thursday that would require companies to allow employees to keep working five years beyond the mandatory retirement age of 60 if the workers wish to do so.
Supported by the Democratic Party of Japan, the Liberal Democratic Party and New Komeito, the bill is in line with the administration's plan to gradually raise the age that retirees start receiving their pensions from 60 to 65.
Under the current law, workers can remain employed until they reach 65 at the discretion of companies, which use various criteria, including employees' abilities, if an agreement is reached between labor and management representatives.
The bill, which is expected to clear the Upper House as early as next week, would remove the provision allowing firms to choose which workers to retain.
An amendment added by the DPJ, LDP and New Komeito leaves companies some leeway in which workers are retained. For instance, firms would not have to keep workers over age 60 if they suffer from poor health or have a record of bad behavior.
The amendment was added as a result of opposition from employers that say overly protecting the elderly would hinder them from hiring younger people.