Japan: Labour market reforms (Dispatch Workers Law)

Proposal

As the latest of a series of amendments that have been proposed and/or adopted over the past 20 years, in late 2013 a new proposal was made to amend the legislation which governs the employment of temporary workers -the Dispatch Worker Law (DWL) (Asahi Shinbun, 28 November 2013).

The proposal removed two key restrictions on the employment of temporary workers (so-called ‘Dispatch workers’). In particular, it removed the upper maximum length of time that a post could be filled by a dispatch worker, creating the requirement that after 3 years any renewal of the temporary post must be filled by a different dispatch worker – whereas in the past, 3 years was the maximum time that most posts could be filled by any dispatch worker (as such, the proposed reform would remove pressure on the employer to make temporary posts permanent) (Asahi Shinbun, 2 September 2015, p.7). The aim of the proposed legislation was therefore to make it easier for companies to rely on the employment of dispatch workers for their staffing needs, over a longer time period.

Severity: given that this represented a considerable reform of the Japanese labour market, making it yet more likely that temporary workers would increase as a share of the labour market, we consider this to be a substantial reform. However, as it has only indirect effect on the livelihood of Japanese citizens – i.e. it is a change in regulation, rather than a direct assault on specific workers – we judge the severity to be moderate overall.

Severity: moderate

Target: The target of the reforms is on both labour market insiders and outsiders – i.e. the aim of the reform is to make it easier for permanent employers (‘insiders’) to be transferred to ‘outsiders’ status as they become more precarious in their employment. Whilst at the same time making it more difficult for labour market ‘outsiders’ to join the ranks of the ‘insiders’ by being switched to more permanent contracts. The proposal will therefore act to the detriment of both labour market insiders and outsiders; and for that reason we consider the proposal to be ‘universal’ rather than targeted on a specific group.

Targetuniversal

Refusal

Public opposition

The most common form of refusal witnessed in the light of the proposed amendment to the DWL was that of public opposition. Unions, opposition parties (DPJ), and legal and citizens groups consistently raised concerns that the proposal would increase the number of low-paid non-regular workers, and that dispatch workers would increasingly replace regular workers in the Japanese labour market and that more people would suffer a lifetime of dispatch/temporary employment (which was referred to as Shougai Haken) (Asahi Shinbun, June 17, 2015, p.7; Asahi Shinbun, September 9, 2015, p.3).

Public protests focused on specific points in the legislative  process, as follows:

Spring 2014 (Protest against the bill submitted to the Ordinary Session of the Diet in 2014)

Spring 2014 saw a series of protest events organised by trade unions, in which Abenomics and its systematic favouring of business over the interests of workers was highlighted – this includes a May Day protest events in which 1800 workers marched and rallied against Abenomics and criticising the pro-business agenda of the Abe government (Asahi Shinbun, May 2, 2014, p.25); a separate “Ibaraki Anti-poverty May Day” organised by precarious workers and the unemployed; a May Day protest event in Fukuoka, which witnessed 6300 people joining the rally to protest against inequality and seeking an increase of the minimum wage and for Abenomics to focus more on local households (April 27, 2014, p.31); and a similar May Day event in Niigata, attracting 7,000 people (Asahi Shinbun, 2014, 27, April, p.23).

In addition, protests also focused more specifically on the amendment to the Dispatch Workers Law, with 10,000 people participating in a protest march in Yamanashi against the amendment of DWL (Asahi Shinbun, April 27, 2014, p.27); 200 people taking part in a protest event organised by Rengo Kumamoto (Asahi Shinbun, May 28, 2014, p.27); and a similar protest event took place in Kanagawa (Asahi Shinbun, April 27, 2014, p.27).a group of lawyers in Hiroshima protesting against the amendment to the DWL (Asahi Shinbun, April 22, 2014, p.28); a group of lawyers in Kochi submitting a letter where they expressed their concerns and strong opposition against the amendment of the DWL by highlighting the detrimental effect of dispatch working (Asahi Shinbun, 201, June 17, 2014, p.34).

In addition, protests organised by Rengo against the proposal for a Zero Overtime Payment, often also discussed and saw participants expressing their opposition to the DWL amendment (Asahi Shinbun, May 28, 2014, p.7). 2,000 people joined a protest rallies in Nagoya, opposing the Zero Overtime Payment as well as the amendment of DWL (Asahi Shinbun, Maya 28, 2014, p.5).

Autumn 2014 (Protest against the bill submitted to the Extraordinary Diest Session in 2014)

Protests continued in the autumn of 2014 as the amendment was submitted for consideration by the Extraordinary Diest Session. The protests increasingly moved towards the adoption of more confronational methods. For instance:

On 29 October 2014, sit-in protests opposing the amendment of the DWL were staged by 800 people in front of the Parliament as part of an action organised by both Rengo and Zenroren to protest against  (Asahi Shinbun, November 8, 2014, p.3). This was the first time in the last 6 years that Zenroren joined a sit-in protest in front of the Parliament.

Rengo Fukui conducted a street demonstration and protest with a slogan – ‘Stop the Unequal Society: Raise the living standard’ (Asahi Shinbun Ovember 5, 2014, p.31). Jointly with Rengo Fukui, Rengo Ishikawa continued this street demonstration for 18 kilometers and held a rally attended by 150 people (Asahi Shinbun November 5, 2014, p.31).

On 7 November 2014, 10 groups of unions including Zenroren held a rally around the Parliament (Asahi Shinbun, November 8, 2014, p.3).

Protest in 2015 (Protest against the bill submitted to the Ordinary Session of the Diet in 2015)

As the bill was again submitted to the Ordinary Session of the Diet in 2015 another round of protests and demonstrations were mobilised.

As with the previous year, some of these protests focused on Abenomics in general (highlighting the effect it had on inequality and economic security, of which the move to amend the DWL was a part). For instance, Aomori Kenrouren and citizens joined rallies protesting against the tax hike and demanding greater protection of employment, and criticising Abenomics on the basis that it failed to address problems of inequality in Japan (Asahi Shinbun, March 18, 2015, p.29).

In addition, other protests focused specifically on the amendment to the WDL. Rengo demonstrated and marched in Shinbashi, Tokyo, protesting against the amendment of DWL. Zenrouren conducted street-protests against this amendment in front of the Parliament (Asahi Shinbun, June 20, 2015, p.7). Rengo demonstrated and marched in Shinbashi, Tokyo, protesting against this amendment of DWL. Similarly, Zenrouren conducted street-protest against this amendment in front of the Parliament (Asahi Shinbun, June 20, 2015, p.7).

Alongside protests focused on the DWL amendment, unions also mobilised to highlight the plight of dispatch workers. For instance, Rengo Aomori and members of DPJ in Aomori jointly conducted street protest, strongly opposing against the precarious conditions faced by dispatch workers and their low wages (Asahi Shinbun, June 18, 2015, p.29).

Refusal: the most evident form of refusal was that of public opposition. This was frequent and ongoing throughout the period that the proposal was being considered. It was mainly of a non-disruptive nature; however there were a few occassions on which disruptive sit-ins were (unusually) used to highlight opposition. We therefore consider the main forms of refusal witnessed to be public opposition, both non-disruptive (which was substantial) and disruptive (which was more sporadic – i.e. limited).

Refusal: public opposition, non-disruptive (substantial),
and
disruptive (limited)

Obstacles

As an indirect effect of the public opposition documented above, concern amongst the political elite caused internal division within the governing parties, LDP and Koumei. This ultimately was such that the Abe administration failed to pass the amendment to the Dispatch Workers Law twice in 2014 – therefore creating considerable implementation (or governing) problems. This was also a result of the bill that was submitted to the Diet Ordinary Session in 2014 June including mistakes made by the Ministry of Health, Labour and Welfare – highlighting another problem of institutional incapacity (Asahi Shinbun, June 25, 2014, p.4), arising indirectly from the acts of refusal witnessed. As a result, the bill was never been discussed and it was abolished on June 20, 2014, in the Ordinary Session of the Diet (Asahi Shinbun, June 21, 2014, p.4).

The following year, however, the amendment to the DWL was passed by a majority vote in the House of Representatives plenary session on 19 June 2015 – in the face of strong opposition from the opposition parties who claimed that such amendments would generate a problem of “life-long dispatch employment” (Asahi Shinbun, June 20, 2015, p.7).

Obstacles: The refusal witnessed in opposition to the proposal to amend the DWL was such that it caused both a number of indirect problems for the Abe administration (both internal divisions and institutional incapacity), and governing problems (in that it delayed the ability to adopt the amendment). The amendment was, however, subsequently adopted, so we only consider the indirect problems to be those which were lasting and therefore we judge the obstacles confronting the Abe administration in its amendment of the DWL to be indirect only.

 

Obstacles:
indirect

Response

As noted above, each of the three attempts to adopt the DWL amendment between 2014 and 2015 witnessed three different rounds of protest. As such, the different elite-level responses can also be assessed in terms of each of the three different rounds, as follows:

Ordinary Session of the Diet in 2014

Consent-seeking: PM Abe attended the May Day rally in Yoyogi Park, Tokyo – the first time in 13 years that a Prime Minister attended the annual rally (Asahi Shinbun, April 26, 2014, p.8) – where he appealed to workers to support Abenomics on the grounds that it was contributing to the recovery of the Japanese economy and would ultimately lead to an increase in wages (Kansei Syunto) (Asahi Shinbun, April 27, 2014, p.2).

Concessions: one important concession that was made in the first attempt to adopt the amendment was the removal of a proposal to deregulate so-called ‘day labour’, which was mooted in January 2014 by the MHLW (Asahi Shinbun, January 18, 2014, p.7).

Capitulation (although later adopted – see below): eventually the amendment was dropped as a result of errors in the drafting of the legislation.

Extraordinary Session of the Diet in 2014

Capitulation (although later adopted – see below): again this attempt to amend the DWL was dropped; in part due to opposition to the bill, but also due to confusion over the terms of the proposal as it had been drafted by the MHLW (Asahi Shinbun November 13, 2014, p.4; November 9, 2014, p,3).

Ordinary Diet Session in summer 2015

Concessions: In an attempt to ward off opposition, and especially the criticism that the DWL amendment highlighted the pro-business nature of his administration, Abe went to considerable efforts in 2015 to encourage businesses to increase wages (Asahi Shinbun, July 17, 2015, p.5). Although it should be noted that this did not include any statutory changes, and so should be considered only very minimal form of concession (if it can really be considered a concession at all). In addition, the government createad a new requirement for companies to negotiate with unions over the terms of the employment of dispatch workers – again representing a relatively minor form of concession (Yomiuri Shinbun, January 11, 2015, p.21).

Finally, in eventually adopting the amendment in September 2015, the government was required to include additional measures whereby the MHLW would regulate the hiring of dispatch workers via temp agencies, and also introduced measures that would require training for dispatch workers to be provided by hiring firms (Yomiuri Shinbun, September 12, 2015, p.7; Asahi Shinbun, September 9, 2015, p.3) and for certain benefits to be guaranteed for dispatch workers (Asahi Shinbun, September 9, 2015, p.3).

Concessions: These final round of concessions, we consider to be moderate in scope, in that they represent a genuine amendment to the proposal, but the core of the proposed changes to the labour market regulation remain in place. However, in addition to the post-hoc round of concessions that were made in November 2015, also in response to the ongoing criticism of the way in which the Abe reforms were targeting those vulnerable in Japanese society (see below), we consider the overall range of concessions (both pre- and post-adoption of the amendment) to be substantial.

Concessionssubstantial

Outcome

Went ahead?

Yes at the third attempt made by the Abe administration, but with concessions including supplementary resolutions for temp agencies to abide by when they use dispatch workers for long-term or indefinitely (Yomiuri Shinbun, September 12, 2015, p.7. Asahi Shinbun, September 9, 2015, p.3).

Consequences?

The amendment to the Dispatch Workers Law was passed on 11 September 2015 in the Diet. This amendment will enhance the flexibilization of the use of the dispatch workers, but following the introduction of a number of concessions it will also require temp agencies to provide job training and reinforces the regulation of temp agencies by the Ministry of Health, Labour and Wealth (MHLW) (Yomiuri Shinbun, September 12, 2015, p.7). These requirements were added after the bill failed twice in the past. The Abe administration also continues to face criticisms over this amendment from unions. For instance, Rengo Kagawa openly claimed in its annual conference that the Abe-led government made a mistake in terms of the DWL  (Asahi Shinbun, November 12, 2015, p.31). Similarly, Rengo Ibaragi claimed that the Abe administration and its amendment of the DWL shows how unimportant workers and people are for the government and emphasized the necessity to initiate a social movement (Asahi Shinbun, October 30, 2015, p.31).

Furthermore, in November 27, 2015, the Abe administration had announced “Urgent Policies to Realize a Society in Which All Citizens are Dynamically Engaged”. In these ‘urgent policies’, the Abe administration declared that it would promote consumption through the raising of the minimum wage and wages. In particular, reflecting criticisms against the amendment to DWL in September 2015, which allowed firms to indefinitely use dispatch workers, the Abe administration sought to gain public popularity by promising an increase in the weighted average of the minimum wage nationwide to 1,000 yen (Cabinet Office, November 2015). As a result, the Abe administration’s popularity increased – with the rate of people who support the Abe administration (47%) surpassing the rate of people who don’t support (39%). These developments also saw the Abe administration include three new ‘arrows’, which appear to provide more consideration to vulnerable members of society. For instance, the first new arrow addresses the increase of wages directly. The second new arrow seeks to stabilize employment and improve working conditions. The third new arrow seeks to provide social security by securing nursing services, consulting and supporting systems for families (Cabinet Office November 26, 2015)[3].  Each of these changes should be considered in a context in which the Abe administration was losing popularity from February 2015 onwards; and in which it was subjected to ongoing criticism with regard to its amendment of the DWL (in addition to other criticisms – for instance of agricultural reforms ). As a result of these, the Abe administration had to reshape its so-called three arrows, in response to public opposition which was beginning to impact upon its electoral popularity. For instance, the proportion of people who view Abenomics positively was over 60% in spring 2013, compared with only 45.2% in January 2016 (opinion poll data here).

consequences: further criticism, declining popularity, further post-hoc concessions (however the further concessions resulted in a subsequent rise in popularity; we therefore consider the consequences to be only mild overall – especially as they have produced no visible sign of Abe being unable to continue in government)

Outcome: obstacles (moderate), concesssions (substantial), consequences (mild) (1+4+0.5=5.5)