The Tokyo District Court on Thursday ordered state-backed Japan Post Co. to partially compensate three contract workers who sued for being treated as less than full-time employees doing the same work, but dismissed their demand for equal pay.
The court ordered that the nonregular workers be paid some ¥920,000 in total, a small fraction of the roughly ¥15 million sought but a decision that could have major ramifications for the company, nearly half of whose 390,000-strong workforce consists of contract workers.
Law forbids businesses from creating “unreasonable” pay disparities between full-time and contract staff, and the administration of Prime Minister Shinzo Abe has pushed to close the gap in wages to raise consumption in the stagnant economy.
In his decision, the presiding judge, Shigeru Haruna, said Japan Post did not have a reasonable basis for not paying contract workers a housing allowance or extra wages for working the New Year’s holidays, or giving them summer and winter breaks — all of which full-timers are entitled to.
The three were awarded 80 percent of the holiday pay and 60 percent of the housing allowances, coming out to between about ¥40,000 and ¥500,000 each.
Ichiro Natsume, a lawyer for the contract workers, hailed the decision as having “a big impact on our society in which non-full-time employment is increasing and wage disparity is growing.”
But the workers’ request to be guaranteed pay equal to full-timers going forward was dismissed, with the court saying that labor disparities should be resolved through negotiations between businesses and their employees.
The court also ruled that Japan Post could justify other disparities, such as lack of extra pay for working early and during the night, because “there is a significant difference between the substance of the work that full-time and contract employees undertake and the wideness of the area they may be transferred to.”
The three who sued joined Japan Post between 2003 and 2008 and worked at post offices in Tokyo and in Chiba and Aichi prefectures as clerks and delivery men.
Nationwide, the use of contract employees has been climbing since the late 1990s, with about 20 million nonregular employees hired as of 2016, according to a labor ministry survey. Nonregular employees account for 40 percent of Japan’s workforce, with more middle-aged and older people forced into contract work in recent years.
Pay disparities between regular and nonregular workers remain a major headache for the government. Under a labor reform guideline set last December, the government said gaps in overtime pay and commuting allowances are among the top issues to be addressed.
Japan Post, part of giant Japan Post Holdings Co., said it will examine the decision and decide on an appropriate course of action.
The mail and parcel behemoth, which was a government agency until its nominal privatization in 2007, could take a big hit to its already weak earnings if made to compensate the rest of its contractors. Parent Japan Post Holdings depends on its mammoth banking and insurance arms for the bulk of its bottom line. The government holds a majority stake in Japan Post Holdings.
The company is also facing a severe labor shortage as e-commerce websites such as Amazon.com gain in popularity. It has already announced a rate hike on deliveries starting next March to cover rising labor costs and could be pushed to raise rates further.
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