Professor of Labor Law Hosei University
Senior Researcher JIL
As of 1991 there were 71,685 labor unions in Japan, organizing 12,390,592 workers(1). The greater part of these unions are enterprise-based, accounting for 99.4 percent of all unions and claiming 91.3 percent of all union members. The average number of members per union is only 171. Every year small unions emerge and then disappear. In 1991 1,638 unions came into being while 2,333 became defunct, with the number of members averaging 136 and 89, respectively.
The estimated unionization rate stood at only 6.9 percent in the prewar peak year of 1935, but under the policy of labor union promotion immediately after WW II it reached 55.8 percent in 1949. The rate, however, fell rapidly during the cold war era, remaining around the level of 30-35 percent from the 1950s to the 1970s. Thereafter, it slipped below the level of 30 percent in the 1980s. The latest figure, for 1991 of 24.5 percent, represents a moderate downtrend.
Enterprise-based unions are comprised of many segmented, small-sized entities and with the unionization rate in decline, what is the sphere of influence of these unions in industrial relations?
This paper examines the influence of enterprise-based labor unions through a recent survey on the actual situation of collective agreements(2).
2. Percentage of Collective Agreements Concluded
he right of workers of labor unions to bargain collectively is guaranteed, irrespective of size and unionization rate under Article 28 of the Constitution of Japan and Article 7 of the Trade Union Law (hereafter called the Law). Matters agreed upon at the bargaining table are put in writing and are either signed by or names are affixed with seals by both labor and management. The document thus produced constitutes a legally binding collective agreement (Trade Union Law, Articles 14-18, the Law)(3).
However, reflecting diversified industrial relations by industry, enterprise and establishment, collective bargaining is not necessarily uniformly practised; nor are collective agreements necessarily concluded as provided for in the Law. Let us examine collective agreements concluded as shown in Table 1 which compiles them from various aspects.
The percentage of collective agreements concluded per se has shown little change from the results surveyed in 1986. Over 90 percent of labor unions have concluded collective agreements. The percentage is higher than the 1960 figure of 64%, the 1972 figure of 77% and the 1977 figure of 81%(4). On the whole, the unionization rate has dropped when compared with that in the 1960s and the 1970s, and yet labor-management relations centering on collective agreements seem to have matured progressively based upon the higher percentage of agreements concluded.
Furthermore, in terms of who is the key player in concluding a collective agreement, a few unions depend solely on collective agreements concluded by upper-echelon organizations. However, the majority of unions indicate that lower-echelon organizations conclude collective agreement independently or together with agreements concluded by upper-level organizations. Enterprise-based unions tend to conclude agreements independently(5).
On the other hand, by industry the percentage of unions which concluded collective agreements in the services is notably low at 82 percent. By union size and enterprise size, the larger the organization and company, the higher the percentage of unions with agreements concluded. As the size of enterprises becomes smaller, the percentage of such unions drops as low as 80 percent (at enterprises with 30-99 regular employees). On the other hand, the tendency to try to conclude a collective agreement independently remains largely unchanged(6).
By the year in which a labor union was inaugurated, the percentage of unions with agreements tends to be higher for older unions, formed in 1960 or before, while the percentage tends to be lower for those unions created between 1961 and 1970 among which the ratio of labor unions in smaller enterprises is relatively high. In terms of the unionization rate by particular organization, such as enterprise and establishment, the percentage of unions concluding agreements nosedived to 76 percent where the unionization rate is under 10 percent; otherwise, a notable gap is hardly seen in the rate of unions with agreements. Whether there are rival unions within one particular enterprise or establishment does not make a conspicuous difference in the rate of agreements concluded.
From the above facts, several conclusions can be drawn. First, the practice of concluding collective agreements by enterprise-based unions has taken root. Second, this practice has acquired a firm footing, particularly in large enterprises and unions. Third, the practice of concluding collective agreements shows a relatively modest level in the services, smaller-scale enterprises, small-sized unions and unions in enterprises with a low unionization rate.
3. Procedures for Concluding Collective Agreements, Method of Notifying that Collective Agreements have been Concluded and Term of Validity
Collective bargaining and labor-management consultations are widely practised in Japan. Accordingly, only a few, specifically nine percent of labor unions, that conclude a collective agreement do so solely through collective bargaining without utilizing labor-management consultations. Also, 22 percent of labor unions conclude an agreement directly through labor-management consultations without collective bargaining process. The greater part, or 62 percent, first hold labor-management consultations and then conduct collective bargaining to conclude an agreement. Cases in which labor-management consultations are not held or in which labor-management consultations and collective bargaining are completely separated from each other are rather few; and in many cases it seems that both are functionally mixed or anchored together.
How are union members notified of agreement that has been concluded? Only two percent of the unions questioned did not take any measures to make the agreement known to members (19% in the case of unions with a unionization rate of under 10%). Ninety-one percent take some kind of measures, and of them, 56 percent distribute the agreement to union members. The percentage is relatively low in the services (45%), in unions with 30-99 members (50%), in enterprises with 30-99 regular employees (41%), in unions established since 1981 (43%) and in those unions organizing from 10-30 percent of enterprise employees (not inclusive) (27%).
Regarding the period of validity, 84 percent of comprehensive basic agreements include provisions for a term of validity. Of them, over half, or 53 percent, provide for a term of validity of one year, 25 percent for a term of validity of over one year but less than three years and six percent for a term of validity of three years. Article 15 of the Law provides that the longest possible term of validity is three years, but most agreements stipulate a shorter term than this. In many cases revision of an agreement is discussed at the time of the annual spring labor offensive which culminates in wage negotiations, and as a tendency long-term agreements are avoided.
4. Scope of Collective Agreements
Table 2 shows whether or not there are documented provisions at workplaces with labor unions and the ratio of the provisions stated clearly in collective agreements. Of the substantive contents, excluding the scope of agreement and term of validity, the following are notable subjects stipulated in the agreements. Working conditions: a high percentage of agreements provide for bonus and lump sum allowance (61%), other wage -related items (about 50%) and working-hours-related items (slightly below 50%). Industrial relations: 40-60 percent of agreements provide for union activities, dispute actions and union organizations.
By industry, 30-40 percent of the agreements concluded in the services provide for wage-related items, 20-30 percent for work-hours items and 20-40 percent for labor-management relations. Thus, the percentage of agreements which provide for these subjects slips more than 10 percent from the average total. By enterprise size, the larger a company, the more clearly it states provisions in the agreement. Smaller enterprises, particularly those with 30-99 regular workers, state provisions less clearly in the agreement than do enterprises in the services.
Enterprise-based labor unions in Japan pay enormous attention to the adequate operation of their internal labor market. Also, the degree of their attention to dismissal and relocation issues is said to be high. Often the right to bargain and act collectively prompts the unions to participate in decisions about these issues. Fig.1 shows the degree of labor unions' participation in the two cases, one in which there are related provisions in an agreement, the other in which there are no such provisions.
On the whole, only a few unions fail to participate in dismissal and relocation bargaining at all (9% for the former and 17 percent for the latter), and the majority participate to a certain extent in management's decision-making. This suggests that even without provisions in an agreement, collective bargaining and labor-management consultations offer an opportunity for participation in managerial decision-making. When the provisions are given in an agreement, however, labor tends to participate more strongly in managerial decision-making(7). By industry, labor unions of companies in the services show a lower degree of participation (6% for consent and 22% for consultations). Likewise, smaller unions, smaller enterprises and unions with a low unionization rate tend to represent a lower degree of participation. Furthermore, when there are several unions in one particular firm they tend to show a lower degree of participation.
Various measures are more adequately taken for union activities of members while on duty and for utilization of company facilities for union activities when an agreement gives related provisions for such measures. These measures taken tend to be somewhat confined to labor unions of firms in the services, smaller unions and enterprises, unions with a low unionization rate, recently created unions and where several unions exist in one particular enterprise or establishment.
5. Labor-Management Disputes over Negotiations on Agreement
Table 3 indicates the percentage of labor unions which confronted management with their views and opinions in the process of concluding a collective agreement by subject of the dispute. A very large percentage of unions opposed management over the amount of basic pay in wage negotiations, followed by bonus and lump sum pay. Otherwise, there are few subjects over which labor and management show an outright opposition to each other. One in every 20 unions found itself confronting management over working hours, holidays and vacations as these issues have been vigorously debated in recent years, as is the case with the compulsory retirement age limit, reemployment and extended employment. Industrial relations subjects have resulted in less eminent confrontation between labor and management in recent years(8).
In Japan there are virtually no industry-based or vocation-based collective agreements. Region-wide collective agreements are also exceptional. The widely recognized collective agreements are enterprise-based. Many segmented enterprise-based or establishment-based labor unions have the legal right to bargain collectively and negotiate with the management or hold labor-management consultations to conclude a collective agreement. Japanese labor unions are active in a variety of areas through industry-wide or region-wide upper-echelon organizations of enterprise-based unions and national centers; but their primary area of activity is related to the workplace.
The latest survey on the realities of collective agreements shows a tendency for conclusion of collective agreements to have taken root, but with what appear to be wide gaps in the details of the agreement mirroring the characteristics of industries, enterprises, establishments and particular unions. The survey also appears to reveal substantial differences in the regulating power of labor unions in workplaces. Particularly the relatively weak tendency to conclude collective agreements in the services industry and in smaller-scale enterprises (despite the fact that unions have taken great pains to organize these sectors) clearly suggests the fact that labor-management problems may exist there.
Notes: (1) Figures here are based on Ministry of labor's Basic Survey on Trade Unions (issued each year) and others. The average number of union members is calculated based only on the unit number of union members and is 173 if based on the total number of union members.
(2) Based on a 1991 Survey on the Realities of Collective Agreements compiled by Ministry of Labor. The Ministry conducts the survey once every five years. Of the unions stratified according to industry and unionization rate, about 5,000 labor unions were selected by random sampling and were questioned through on-site visits.
(3) The collective agreement takes effect as a contract between labor and management; but it also has a normative effect over individual labor contracts. Application is extended to the remaining one-quarter of workers of the same category when it applies to three-fourths or more of those employed in establishments and has general binding power when it applies to the majority of workers employed in a locality.
(4) Cf. Y. Suwa, "Recent Trends in Collective Bargaining Agreements in Japan", Japan Labor Bulletin, Vol.18-No.7, 1978, P.8.
(5) Of the unions which fail to conclude collective agreements, 12 percent said that the results of collective bargaining are not needed to be synthesized into a collective agreement since they are observed (24% replied there is no need for concluding a collective agreement since they have comprehensive work rules). Eighty-four percent, however, opted for the necessity to conclude a collective agreement.
(6) The percentage of upper-echelon organizations in which a collective agreement is concluded is high among large enterprises with 5,000 and more employees because in many cases a federation of intrafirm unions conclude one major central collective agreement.
(7) Participation in the case of union official's job security is the highest. Unions' concern in disciplinary actions was slightly weaker than in dismissal actions, but tended to be stronger in relocation issues.
(8) According to Ministry of Labor's Survey on Labor Dispute Statistics, in 1990 the number of labor-management disputes, that of labor disputes which led to strikes or lockouts continuing more than half a day, that of workers involved and that of working days lost dropped sharply to 20, 5, 2 and 2, respectively on a scale constructed with the numbers in 1974 (when these actions peaked) equal to 100.
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