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Japan – Staffing reform must lead to better labour conditions

05 February 2014

Reform of the temporary staffing system must lead to stable employment conditions for temporary workers, reports The Japan News. An advisory panel of the Health, Labour and Welfare Ministry has compiled a report, which, if accepted by the government, will permit companies to keep certain roles temporary on an indefinite basis, if certain conditions are met.

Currently, the employment period for temporary workers, known locally as dispatch workers, at companies is set, in principle, at a maximum of three years. The proposed changes will make it possible for firms to employ temporary workers continuously in any type of job if they are replaced every three years.

As part of the growth strategy promoted by the administration of Prime Minister Shinzo Abe, the reform is aimed at making it easier for companies to hire temporary workers when they expand production and undertake new projects.

The dispatch law was amended by the Democratic Party of Japan-led (DPJ) administration in March 2012 to prevent the practice of laying off temporary workers, which was rampant in the aftermath of the collapse of Lehman Brothers. The revision resulted in tougher regulations; such as banning, in principle, the short-term dispatch of workers for up to 30 days. The revision was aimed at protecting dispatched workers.

Contrary to the DPJ-led government’s effort to secure stable employment for such workers, the reform did not lead to improved labour conditions. The situation remains unchanged as dispatched workers can be hired for relatively low salaries with no annual pay increases, which are traditionally set according to the number of years of work experience.

In order to ensure that the proposed reforms benefit the temporary workers, as well as the recruitment firm and client company, the report calls for the establishment of a permanent framework for talks between firms dispatching and hiring temporary workers.

Hiromasa Yonekura, Chairman of the Japan Business Federation (Keidanren), hailed the panel’s report, saying it will: “Help change the system into a more understandable one.”

The Japanese Trade Union Confederation (Rengo), on the other hand, criticised the proposed reform, arguing it may lead to: “Backpedalling on the protection of workers.”

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