Labor unions and management at major electricity firms will soon move to gradually extend the employment of their employees from age 60 to 65. They negotiated the details and reached a final agreement in February.
The extension of employment involves more than just the extension of the mandatory retirement age. It includes retention of the job contract whereby the worker is re-employed after reaching his mandatory retirement age and receives the relevant allowances. In Japan, the legal mandatory retirement age has been 60 years of age or over since April 1998, and the majority of enterprises have set it at 60. Although some enterprises have been introducing a scheme to re-employ their retired employees, the continuation of employment up to age 65 is not yet very common. At the same time, the tight financial situation has resulted in a decision to commence payment of the basic benefit from the Employees' Pension Plan, a public pension for salaried employees, from 61 in 2001 (up from age 60 at the present) and then to gradually raise that age to 65 by 2013. Another bill submitted to the Diet calls for the starting age for the payment of the other major component of the pensions, which is linked to contributions, to be raised also from 60 to 61 by 2013 and then gradually to 65 by 2025. These revisions have highlighted the employment of people in their early 60s as a social issue.
Given these circumstances, Denki Rengo (Japanese Electrical, Electronic and Information Union [JEIU]), which consists of labor unions of 17 enterprises in electric manufacturing, has since the 1998 spring offensive called for employment to be extended. Negotiations between labor and management started with the union's demand for the mandatory retirement age to be raised. This was rejected by management, and negotiations came to a standstill. The union then toned down its demand, asking management to extend employment following final payment of retirement allowances once workers had reached the mandatory retirement age. It also called for management to (1) guarantee the employment of all workers aged 60 or over who wished to continue working, (2) promise that such employment would be as secure and with the same rights to unionization as was the case for employees aged under 60, and (3) to link the extended age limit to the age when the payment of pensions would begin. Negotiations on the extension of employment at Matsushita Electric Industrial Co., Ltd. were concluded in May 1999, and those at Sanyo Electric Co., Ltd. were concluded the next month. The negotiations resulted in settlement this spring before the shunto at 10 or more firms (including Toshiba Corp., Hitachi Ltd., Mitsubishi Electric Corp., Fujitsu Ltd., and NEC Corp.).
The electrical manufacturing industry is the first industry in which a majority of member firms are going ahead with employment extension. The issue is also a major concern for labor unions in other industries, and it will be interesting to see how the unions handle this matter in the 2000 spring offensive.
The agreements on employment extension in Japan's large electric firms varied. At Matsushita, workers aged 58 will be asked whether they wish to extend their employment, and may receive wages without cuts. At Sanyo wage levels will fall after workers reach 55. Fuji Electric Co., Ltd. will gradually extend the mandatory retirement age to 65. Fujitsu will not set an age limit for extended employment even after a worker reaches 65, but has announced that it will not re-hire all workers who have reached 65 (the retirement age) and wish to stay on at the company. Rather, it will offer one-year employment contracts only to those who are needed by the firm.
The Ministry of Labour is planning to submit a bill to the Diet that encourages firms to continue to employ workers up to the age of 65. The bill calls for subsidies to be paid to firms which have extended their retirement age to 61 or over.
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