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Thursday, April 5, 2007

Q&A

What the government is trying to accomplish


Staff writer

Six bills have been submitted to the Diet to revise labor regulations to better suit diversifying working conditions. Following are questions and answers on the bills and government moves to reform the labor market:

What does the government hope to achieve with these bills?

The government says they are designed to cope with the changing environment of Japan's labor market, including the rising number of temporary workers and part-timers and shrinking labor force caused by the declining population.

Having suffering through the prolonged economic slump combined with intensifying global competition, companies feel compelled to drop such long-held practices as lifetime employment and seniority-based pay.

Instead, an increasing number of firms have in recent years adopted merit-based wage systems and hired more nonpermanent workers. Experts say this has contributed to a widening gap in income. A government survey shows that nonregular employees now account for nearly a third of the nation's workforce.

What is in the bills?

Three of the six are aimed at reducing income disparities and improving job conditions for low-wage earners.

The first would revise the Part-time Work Law to encourage improved status for part-timers. Employers would be required to offer the same treatment, including wages and training, to part-timers whose duties are equivalent to those of regular workers.

The second is aimed at raising minimum wages. Under the current Minimum Wages Law, the lowest legal pay varies by region and is determined by local-level labor offices every year. The national average last year was 673 yen. Although the bill doesn't contain a specific target for minimum wages, it includes a clause stipulating that balancing the level of minimum wages and that of welfare payments should be taken into account so workers do not earn less than what they would receive if they were on welfare.

The third bill would revise the Employment Measure Law to promote hiring of young unskilled temporary workers by asking companies to fairly evaluate their past job experiences and banning companies from setting age limits on job applicants.

As for the remaining bills, one would amend the Labor Standards Law to raise overtime pay to an additional 50 percent, instead of 25 percent at present. However, the higher rate would only be applied to overtime in excess of 80 hours a month.

Another bill would create the Labor Contracts Law to better deal with rising labor disputes. Basic rules would be established for job conditions and employment contracts covering dismissals and transfers. For example, an employee would have to consent to being loaned out to another firm.

The final bill would revise the Employment Insurance Law to raise the percentage of financial support for employees taking child-care leave to 50 percent from the current 40 percent. The revision is aimed at stemming the declining birthrate.

Will the bills solve these labor-related problems?

Whether the changes will be effective remains to be seen, because labor-management clashes forced the government to give up on making most of the new rules obligatory.

For example, the proposed revision under the Employment Measure Law on encouraging firms to hire more unskilled temporary workers would not be mandatory.

Will they be approved by the end of the current Diet session?

Most likely. Because the government mapped out the bills after taking opinions from labor and management representatives, the bills are mostly the product of compromise.

Opposition parties have questions on how effective the bills will be in dealing with employment problems, but they basically agree with the principles.

The most controversial issue was excluding certain white-collar workers from overtime pay, but the government decided to drop it in the face of strong opposition from unions and salaried workers.

What other government moves are under way to improve the labor situation?

The Council on Economic and Fiscal Policy, a key government economic committee, has set up a special advisory panel to discuss midterm policy on labor market reforms dubbed the "labor big-bang," aiming to wrap up discussions by June.

Naohiro Yashiro, a professor at International Christian University who chairs the nine-member panel, said its aim is "to draw a picture of new, ideal work styles from a broader view that will best fit workers in Japan."

But because the panel covers a wide range of topics, it is still unclear what kind of proposal it will come up with in its final report. Some players, especially unions, are suspicious the panel may be trying to reduce legal protection for workers.

The panel recently released a midterm report calling for specific goals to promote employment of young people, women and older people to cope with the shrinking labor force.

It is also discussing measures to allow workers to achieve a "work-life balance," according to the report, but the panel has yet to come up with specifics.

"Japan's conventional employment system is based on the notion that men work outside and their wives are full-time homemakers," Yashiro said, adding this has led men to work long hours. "But that is no longer the case. . . . We must change the way men work."



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