A government-proposed bill to achieve what Prime Minister Shinzo Abe calls “work-style reform” by amending the Labor Standards Law and other rules will be on the way. Curbing the chronically long work hours put in by corporate employees and closing the steep wage gap between regular and irregular workers were advocated by most political parties in the campaign for the Lower House election last Sunday. The parties and lawmakers differ a great deal, however, on the details in the legislation promoted by the Abe administration. All relevant parties, including labor unions and people at large, should scrutinize the legislation to determine whether it will actually improve working conditions, especially whether it will serve to prevent excessive work hours that imperil their health.
The bill was to have been submitted to the Diet during the last legislative session, but it was postponed when Abe dissolved the Lower House in late September. Its four main pillars are placing a legal cap on overtime hours; introduction of a system to lift work-hour regulations on certain highly skilled and highly paid professionals; expanding the discretionary working system, in which employees will be regarded as having worked a certain number of hours and paid an accordingly fixed wage no matter how long or short they actually work; and measures that aim for the “equal work, equal pay” principle in which workers engaged in the same work are paid the same irrespective of their employment status.
The 2015 suicide of a stressed out and overworked 24-year-old employee of Dentsu Inc., for which the advertising giant was fined ¥500,000 earlier this month by the Tokyo Summary Court, roused renewed social criticism of the practices prevalent in Japanese firms that allow overwork. The proposed legislation would in principle restrict an employee’s overtime to 45 hours a month and 360 hours a year. That limit, however, could be extended to 100 hours a month during busy season and 720 hours a year under an agreement between management and that company’s labor union. Even though it would be the first legal limit on maximum overtime hours, critics say the cap could effectively condone a level of overtime work that threatens employee health. The Dentsu employee was found to have been working 105 hours of overtime a month before she developed depression and killed herself.
The Dentsu employee had also reportedly been told by her superior to underreport her overtime hours — so the record would show her overtime was within the limit set by the company’s agreement with its labor union. The reportedly widespread practice of companies having employees underreport their overtime — or even not report it at all and get no overtime pay — makes legal regulations on overtime hours irrelevant. In discussing the bill, lawmakers should delve into whether its provision for the maximum cap on overtime hours is reasonable from the viewpoint of protecting workers’ health, and how the problem of “service overtime” without pay should be eliminated.
Oddly enough, the government’s policy of introducing the new system for “highly professional” workers — which opponents have criticized as a measure for companies to save on their overtime wages — was not clearly outlined in the campaign pledges of the ruling Liberal Democratic Party or its coalition partner Komeito. Under the bill, work-hour regulations under the Labor Standards Law can be lifted on workers engaged in jobs requiring a high level of expertise and earn ¥10.75 million or more annually, such as financial dealers and specialists in research and development, so that they would be paid on the basis of performance instead of hours.
The contentious measure has incurred criticism from labor circles since it imposes lax duties on employers to supervise the health of those workers. Concern has also been raised that the scope of the system might be expanded to cover a broader segment of the workforce, for example by lowering the income threshold of workers to whom it can be applied.
One problem with the legislation is that the two measures based on seemingly different ideas — one for capping overtime and the other for lifting work-hour regulations on certain employees — are packaged in a single bill. The two proposals should be uncoupled and discussed separately in the Diet.
Introduction of the same work, same pay principle — which Abe touted as a key part of his work-style reform agenda — should have consensus support in the Diet since both ruling and opposition parties incorporated it in their campaign platforms. The Abe administration has set a target of narrowing the hourly wage gap between regular full-time employees and workers with irregular status such as part-timers from roughly 60 percent to around 80 percent. The Diet should closely examine how effective the proposed measures can be to make sure irregular workers will not be discriminated against on the basis of their employment status.
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