A proposal by the government’s regulatory reform panel to introduce a system that enables companies and their employees to settle legal disputes over unfair dismissals with financial compensation should be scrutinized to determine its pluses and minuses from the viewpoint of protecting workers’ interests. It must not result in the creation of a system that effectively makes it easy for businesses to fire workers by offering severance money.

A similar idea was entertained by the government in the early 2000s, but has so far not materialized due to opposition from labor organizations. The Abe administration, which considers some labor regulations to be obstacles to the enhancement of Japanese businesses’ competitiveness, called for renewed discussions on the issue in its economic growth strategy adopted last year. The panel’s proposal lacks specifics and details are expected to be discussed further by the Health, Labor and Welfare Ministry.

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