Akemi Hirose, 39, recalls when her contract as a temporary worker at a medical organization in Kanagawa Prefecture was suddenly terminated three years and three months after she started.

No clear explanation was given by the organization or the temp dispatch company, she said. Hirose, currently in litigation demanding to be hired by the organization, which cut her loose in 2009, said temp staff lack employment stability.

Because such workers must renew their contracts every few months they are in a very weak position in the workplace, she said. Even if they have a grievance, they keep it to themselves out of fear that their contracts could be terminated if they file a complaint, she said.

“For me, it was supposed to be a temporary job until I became qualified as a mental health care welfare worker and got a regular job,” Hirose said. “I never dreamed of finding myself in this position.”

As of June 2013, some 1.27 million people held temporary positions as dispatch workers, according to the Health, Labor and Welfare Ministry. That number was down from 2 million in 2008, when the global financial crunch saw thousands of temp workers lose their jobs as firms cut back.

This led to a brief tightening of regulations for the recruitment of temp staff in an attempt to provide better job security. The trend, however, may be reversed.

The administration of Prime Minister Shinzo Abe has submitted a bill to revise the worker dispatch law that would scrap the three-year limit on hiring temp workers to perform the same job, enabling corporations to use temps as long as they wish instead of having to hire them as regular employees after a set period. Businesses would merely have to switch out their temp workers periodically so as to avoid recruiting them on a permanent basis.

Observers say the amendment would swell the ranks of temp staff, widening the gap between rich and poor and leading to a further decline in the population of the middle class. In turn, that could lead more people to refrain from marriage because they couldn’t afford to support a family, accelerating the speed at which the nation’s population is shriveling.

In a country where many people are employed straight out of university with rock-solid job security until they reach retirement age, the working conditions of temp staff are far inferior: they are paid less than regular workers doing the same job in general; they are not directly hired by the companies they work at; and many face the prospect of losing their jobs every few months when their contracts come up for renewal.

“The legal revision could expand business opportunities for dispatch companies, but the bill does not improve the employment stability of temp workers,” said Ichiro Natsume, a lawyer specializing in labor issues. “It scraps the principle that the employment of dispatch workers is a provisional way to procure (short-term) labor.”

The government has long maintained the principle that lifetime employment should be the basic form of recruitment and that dispatch work is only a provisional method of securing labor. But it gradually widened the range of industries that could take on temporary staff.

The temp workers dispatch law, established in 1985, initially permitted just a few job categories to be filled by such staff. But in 1999, the law was revised under the Liberal Democratic Party government to allow temps to work in almost all industries, with manufacturing and health care among the few exceptions. In 2004, the law was again amended to allow the manufacturing sector to tap temps, as well.

Lowering the hurdles allowed manufacturers to easily lay off temp staff when the financial crisis broke out in 2008, leaving thousands of people jobless in Japan. In response, the law was amended in 2012 by the Democratic Party of Japan administration to forbid dispatch agencies from contracting temp staff for 30 days or less.

Under the current provisions, companies can keep temp workers in the same post for up to three years, except for 26 specially designated jobs, including translation and secretarial work. If a business wants to keep temps on beyond the designated three-year limit, they must be recruited directly.

The bill before the Diet would scrap this complex categorization of jobs and allow corporations in any sector to use a succession of workers sent from staffing agencies to fill a position indefinitely, providing individual dispatch workers are switched out every three years.

Companies would also have to take into account the opinions of labor unions if they want to use temp workers beyond a three-year period. But the unions would lack the power to override a company’s final decision.

Abe has repeatedly claimed the revision aims to lessen the present insecurities of temporary work and help those seeking full-time regular employment. The bill contains several measures to this end, such as obliging dispatch firms to provide training for their workers and help them develop stable careers, although experts view this provision as vague and ineffective.

Another measure states that if temps work for three years in the same job, dispatch agencies would be required to ask the company to directly hire or offer them a new post. Otherwise, the dispatch firm would have to directly hire them.

Tamie Matsuura, a senior analyst and expert on labor issues at NLI Research Institute, an affiliate of Nippon Life Insurance Co., said the proposed measures would be a step forward from the existing law, but she nonetheless questioned whether the career development component for temp workers would be effective.

“Without support from companies where temp staff are based, it’s difficult to provide truly effective career development,” Matsuura said.

But under the current worker dispatch system, corporations have little incentive to nurture the careers of their temp staff, she said: “If companies have no idea whether the same person will be dispatched to work for them, they have little incentive to train them.”

Lacking the opportunity to develop the skills necessary to climb the career ladder, meanwhile, the wages of temp staff remain stagnant regardless of the length of time they have worked. According to data from the labor ministry, in 2012 the average wage of regular employees increased with age but that of temp workers remained stagnant. On average, regular workers earned 1.5-times more than their temp counterparts, the data showed.

Based on the ministry’s data for 2013, the annual income of 80 percent of temp workers came to less than ¥3 million, and 40 percent earned under ¥2 million.

“The true goal of a career is to rise within a company and obtain higher pay and positions. But temp staff have no such option,” Natsume, the labor lawyer, said.

Opposition parties, including the Democratic Party of Japan and Ishin no To (Japan Innovation Party), jointly submitted a bill to the Diet on Nov. 6 to promote the principle of “same job, same pay.” The legislation would oblige the government to take specific measures to achieve this target within a year of the revision entering into effect.

With the Diet deliberating competing bills on the future of temp workers, Natsume said it is essential to improve their dismal working environment.

“I’m not asking for every condition to be made the same as regular employees,” Natsume said. “But I want (the government to) at least raise their wages and provide them with job security.”

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