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Sony Japan is being lumbered with employees it no longer needs but is unable to make redundant, according to the Economic Times India. This unusual situation has prompted an unusual solution. Employees falling into this category are consigned to a room where they spend their days reading newspapers, browsing the web, or otherwise entertaining themselves. At the end of each day they complete a report of their activities.
The standoff between workers and management at the Sony Sendai factory underscores an intensifying battle over hiring and firing practices in Japan. Lifetime employment has long been the norm and large-scale layoffs remain a social taboo, at least at Japan’s largest corporations.
Sony wants to change that, and so does Prime Minister Shinzo Abe. As Japan’s economic recovery sputters, reducing the restraints on companies has become even more important to Abe’s economic plans. His intention is to loosen rigid rules on job terminations for full-time staff.
Economists say that bringing flexibility to the labour market in Japan would help struggling companies streamline bloated work forces to better compete in the global economy. Fewer restrictions on redundancies could make it easier for companies, like Sony, to leave loss-ridden traditional businesses and concentrate resources on more innovative and promising ones.
Sony denies that it is doing anything wrong placing the employees in the so-called ‘Career Design Rooms’. Employees are given counselling to find new jobs in the Sony group, or at another company. Sony also said that it offered workers early retirement packages that are generous even by American standards. In 2010 it promised severance payments equivalent to as much as 54 months’ salary.
Others claim that the purpose of the ‘Career Design Rooms’ is to make employees feel forgotten and worthless. Eventually many employees become bored and embarrassed and subsequently quit.
Critics of the proposed labour reforms warn that making it easier to cut jobs would destroy Japan’s social fabric for the sake of corporate profits. The result of which would be mass unemployment and worsening income disparity.
A combination of lifetime employment, seniority-based pay and intense worker loyalty to the company was credited for Japan’s post-war economic miracle. When the Japanese economy faltered in the early 1990s companies found that the rigid labour practices made downsizing impractical.
Companies are avoiding engaging in fulltime recruitment to avoid issues like these. Temporary and part-time employment reached a record high in May 2013. Japanese unemployment in June 2013 was 3.9%, with the proportion of temporary or part-time employees continuing to grow for the third consecutive year.