Dentsu will face open trial over high-profile 'karoshi' case, summary court orders

A Tokyo Summary Court ruled on Wednesday that advertising giant Dentsu Inc. will stand trial for alleged labor practice violations, a decision that is sure to sound alarm bells at many of the nation’s companies, especially with the recent public backlash against cases of karoshi, or death by overwork, experts say.

Prosecutors had moved to seek a summary court order for Dentsu to pay fines based on simplified criminal proceedings, called a summary indictment. A summary order, which would be issued without an open trial, is for this case “inadequate,” according to the court

Dentsu was summarily indicted on July 5, but the prosecutors stopped short of indicting senior Dentsu officials for allegedly making employees work illegally long hours, as prosecutors believed that the actions by firm managers were not enough to merit such punishment.

“The company’s nature of forcing employees to work in a harsh environment will be made public during trial,” said a senior labor ministry official who asked not to be named. “It will deal a heavy blow for the company and would sound an alarm to other companies forcing employees to work illegal overtime.”

Emiko Terada, 68, who heads a group whose members lost their loved ones to karoshi agrees.

“(The decision) will act as a deterrence to other companies,” Terada said.

The Health, Labor and Welfare Ministry has banned Dentsu from bidding on ministry-related work for six months until January next year. The industry ministry has ordered a similar ban on Dentsu for a month, with other ministries also expected to take action.

The December 2015 suicide of 24-year-old Matsuri Takahashi, which occurred less than a year after she started working at Dentsu, and the conclusion by labor standards inspectors that she died as a result of overwork, sparked a national dialogue over the issue of excessive overtime hours that many company workers endure.

The karoshi incident also had a major impact on the government’s initiative to improve working conditions.

Dentsu had allegedly made Takahashi and three other employees work illegally long hours from October 2015, exceeding the monthly 50 hour maximum allowed under a labor-management agreement, according to the written indictment.

The indictment said they worked beyond the limit in a range between 3 hours and 30 minutes to 19 hours and 23 minutes in excess. Local labor standards office determined in 2016 that Takahashi had worked 105 hours of overtime in a one-month period before showing symptoms of depression.

Takahashi jumped to her death from her company dormitory in Tokyo on Christmas Day in 2015.

Takahashi’s mother, Yukimi, 54, said she expects the court to reach “an appropriate judgment,” considering that her daughter’s death by karoshi was not the first such case at Dentsu. The company said it “will follow the judgment made by the court.”

In cases of karoshi, a company typically faces a summary indictment while senior company officials responsible for issuing job orders will often have the indictments against them dropped.

The proceedings would then lead to a quick settlement if the company agrees to pay fines without disputing the case.

But a veteran judge said it is “understandable” that the court recognized the need for an open trial in Dentsu’s case, given the complexity of the situation and the number of employees involved.

In previous cases investigated by special units for the Tokyo and Osaka labor bureaus tasked with curbing overwork labor practices, at least two had gone to trial even though they were subject to summary indictments.

In both cases, courts ordered payments of ¥500,000 ($4,410) in fines.

Dentsu has been trying to repair its damaged reputation through in-house reforms such as a lights-out office policy after 10 p.m. and providing free breakfasts for employees to encourage working in the morning instead of late at night.

But if the trial exposes slipshod management practices, it could further dent the company’s image, which will possibly make it harder to attract prospective employees amid rising labor shortages.