Japan: Zero Overtime Payment

Proposal

The Zero Overtime Payment bill was originally suggested by Abe during his period as prime minister in 2007.  The original title given to this earlier proposal was the “white-collar exemption’. This saw the first Abe administration (2006-7) attempt to introduce a system of zero overtime payment in order to flexibilize working hours for high-income workers and enable employers to avoid their legal obligation to pay overtime to those workers. However, PM Abe was forced in 2007 to give up on the proposal and ultimately did not submit it for consideration to the plenary session in the Diet, admitting that the proposal had not gained sufficient support from members of the public (Yomiuri Shinbun, January 17, 2007, p.1) or from his own LDP members (Yomiuri Shinbun, January 23, 2007, p.4). This was largely due to opposition from opposing parties (Communist party, Social Democratic Party) and labour unions (Rengo, Zenroren, Zenroukyou), with Abe accepting that the proposal could not get the approval nor understanding of members of the public.

Upon his second election to office in 2012, however, PM Abe again sought to introduce a bill to enhance the flexibilization of working hours and remove employers’ responsibility to pay overtime payments (Zangyoudai Zero (Zero Overtime Payment)).

In October 2013 the government gave up its attempt to introduce the “Special Economic Zone for Zero Overtime Payment” (white-collar exemption) into the growth strategy on October 4, 2013 (Yomiuri Shinbun October 5, 2013, p.4). However, the Abe administration continued to propose the idea, reflecting pressure from business groups including Keidanren. The deregulation committee, which was established as an advisory body for PM Abe, again proposed the introduction of schemes that would result in flexible working hours, with the aim of re-introducing  the Zero Overtime Payment proposal (Yomiuri Shinbun, December 6, 2013, p.4). As a result, internal discussions within the Administration saw the Minister of the Welfare, Labour, and Health (Tamura) and the Minister of the Economy and Finance (Amari) agreeing on a revised proposal for Zero Overtime Payment (Yomiuri Shinbun, July, 12 2014, p.11).  The Cabinet eventually approved this proposal on 2 April 2015, agreeing to propose legislation to see its adoption – the revised scheme that was agreed on by the cabinet included a threshold of annual income of 10.57 million yen, which therefore limited the impact of the scheme to those on higher incomes (‘insiders’).

We consider the severity of the scheme to be substantial –  the removal of overtime payment is a considerable reform to the Japanese labour market, where the practice of working for long hours is part of the working culture. Further, there was concern that once the proposal was adopted it would require very little for any future government to remove or lower the threshold of higher income above which people needed to pass before the measure applied to them.

Severity: high

Target: the proposal targets high income earners (insiders), although as noted above there was concern that it could later be subsequently reformed so that it would also have more universal focus.

Target: insiders/universal

Refusal

Public opposition. The Zero Overtime Payment witnessed a wave of mobilisation in public opposition, largely undertaken by workers and coordinated by trade unions, and taking the form of demonstrations to illustrate the scale of opposition. For instance:

  • In the May Day protest event which took place in Tokyo on 26 April 2014, workers focused especially on the “Zangyoudai Zero (Zero Overtime Payment)” and highlighting how this reflected a worsening of the working environment (Asahi Shinbun, April 27, 2014, p.2).
  • The May Day protests of 2014 also witnessed 1500 people protesting against Abenomics and its Zero Overtime Payment, highlighting the impact upon non-regular workers (Yomiuri Shinbun, May 2, 2014, p.21).
  • 2014 also saw large-scale protest events across Japan – with Rengo for the first time organising simultaneous rallies in all 47 prefectures to oppose the government’s proposal – with an estimated 22,000 people taking part in the protests across the country.
  • As part of the May Day 2015 protests:
    • 3,500 people joined a rally in Aichi protesting against the Zero Overtime Payment, as well as opposing the flexiblization of working hours (May 2, 2015, 2015, Yomiuri Shinbun, p.27).
    • In Nara, 1,300 people protested against the Zero Overtime Payment and the further deregulation of the Workers Dispatching Law (May 2, 2015, Yomiuri Shinbun, p.27).
    • 1,000 workers and union members also joined a May Day rally organized by Rengo Osaka, and conducted street demonstrations, opposing against the introduction of Zero Overtime Payment on May 1, 2015. (Yomiuri Shinbun, May 1, 2015, p.12).
    • In Ehime, 400 people conducted street protests, opposing the Zero Overtime Payment bill and other forms of deregulation in the labour-related laws (Yomiuri Shinbun, May 2, 2015, p.27).

In sum, opposition to the proposal for Zero Overtime Payment largely took the form of public opposition mobilised as part of the annual May Day union demonstrations. In this sense, whilst opponents focused on the negative consequences of the proposal, the opposition was broadly within the typical constraints of regular protest (non-disruptive) – although the 2014 mobilisation was the first time that protests had occurred in each of the 47 prefectures.

Refusal:
public opposition (non-disruptive), substantial

 

Obstacles

The main obstacle faced by the Abe administration was the way in which it was attached to a general sense of declining support (declining legitimacy) for the Abe Government, witnessing visible and ongoing opposition from Rengo and the DPJ (Yomiuri Shinbun, 6 May, 2015, p.4); and also from within the Government itself, with the Ministry of Health, Labor and Welfare (MHLW) being the most vocal department opposing the scheme (Yomiuri Shinbun, May 5, 2013, p. 4). This form of internal division within the government we consider to be an indirect effect of the refusal witnessed (i.e. an inability by the goverment to agree on a coherent response to the objections raised by the movement against the Zero Overtime Payment initiative). In particular, the MHLW was already concerned (prior to the proposal) about the level of dissent expressed in the workplace – with the number of labor disputes reaching a high level of over 1 million cases in 7 consecutive years from 2008 onwards. By June 2015, the Abe government had reached its lowest level of popularity since entering office (although this still remained relatively stable at 41%); and in July 2015 a survey showed that 47% disapproved of Abe’s handling of the economy (compared with 40% who approved) – a result that was largely put down to the decline in real wages that had been felt by Japanese workers as a result of Abenomics. As noted above, the administration also experienced a degree of internal division (especially between the MHLW and MEF) over the details of the scheme.

Obstacles: the main obstacle faced by the Abe government as a result of the proposal for zero overtime payments was the internal divisions within the governement (indirect); especially that arising from the opposition to the move within the MHLW.

Obstacles: indirect (internal divisions)

Responses

In seeking to respond to the opposition and obstacles faced by the Abe Government in its proposal for Zero Overtime Payment, two key responses were witnessed.

First, Abe sought to achieve consent for the proposal. Notably, in 2014 he attended Rengo’s May Day event in Yoyogi Park, in Tokyo – the first time in 13 years that a Prime Minister had attended the event – where he sought to appeal to workers on the grounds that Abenomics had been contributing to a recovery in the Japanese economy (Asahi Shinbun, April 26, 2014, p.8).

Second, Abe sought a range of concessions. These included the indirect attempt to respond to disgruntled workers by seeking an increase in wages – although this was a relatively soft measure as it was largely limited to appealing to firms to voluntarily increase wages (Asahi Shinbun, July 17, 2015, p.5). More concretely, government ministers Tamura (MHLW) and Amari (Minister for Economics and Finance (MEF)) agreed to limit the scheme to those on an annual salary of 10 million yen, which represented a compromise in favour of MHLW (which was more cautious about the extent to which the scheme should apply than was the MEF). Nevertheless, the scheme in this form would remain largely in place.

However, in part as a result of large scale protests conducted by Rengo in May 2015 and declining support in the opinion polls, the government eventually abandoned its plan to submit its Zero Overtime Payment bill to the Diet (parliament) in July 2015 (Asahi Shinbun, September 26, 2015, p. 4).

Response: capitulation

Outcome

Went ahead?

No

In part as a result of large scale protests conducted by Rengo in May 2015 and declining support in the opinion polls, the government abandoned its plan to submit its Zero Overtime Payment bill to the Diet (parliament) in July 2015 (Asahi Shinbun, September 26, 2015, p. 4).

Sum: capitulation (9)