CWS 3.0: December 17, 2014

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Japanese election may mean big changes for temporary recruitment

The re-election of Japanese Prime Minister Shinzo Abe, following a snap election held on Dec. 14, could mean significant changes for Japan’s labor laws. Securing 326 out of a possible 475 seats, Abe’s government has enough of a majority that it can override bills rejected by the upper house of parliament and pass them into law.

Abe called the election a referendum on his economic policy, known as “Abenomics,” which involves a three-pronged strategy for restarting economic growth in the beleaguered country.

The three prongs are:

  • Printing vast amounts of money to boost Japan’s purchase of government bonds
  • Increasing government spending substantially to spur growth
  • Reforming key sectors; such as agriculture, healthcare, energy, and labor

Revisions to the law on dispatch (the local term for temporary) workers were aborted in the last Diet session after deliberations stalled following inaccurate information from labor minister Yasuhisa Shiozaki. Abe’s landslide victory means revisions will likely be back on the table.

The 1986 law bans use of temporary workers in the same job for more than three years. At present, after a job has been filled by a temporary worker/several temporary workers for three years, it must become a permanent position. It doesn’t specify the temporary worker doing the job must be employed on a permanent basis, only that the job can no longer be considered temporary in nature.

There are currently only 26 occupations exempt from the law; including interpreters and secretaries.

The bill proposes amending the law to abolish the three-year limit for all occupations and allowing companies to use temporary staff in the same job indefinitely, provided they replace the individual workers every three years.

Companies would also be required to consult their trade union representatives if they want a position to remain temporary. Interestingly, while companies have to consult the unions, they do not have to follow through on comments or objections, as the unions are not empowered to override management decisions.

The business community, which has relied increasingly on an irregular workforce while cutting back on the employment of full-time workers, has been pushing for easing regulations on the use of temporary workers. But opposition parties sharply criticized the bill, claiming that the amendment would prompt businesses to permanently replace full-time employees with temporary workers.

While the election result could be seen as a great victory for Abe and his policies, in reality voter turn-out was at its lowest since the end of the Second World War. Many questioned Abe’s decision to call a snap election halfway through his first term in office. Even though his party won by a strong majority, pundits had expected Abe’s Liberal Democrats to secure more seats than they did.