The Japan Labor Flash No.4
Email Journal November 17, 2003
Statistical Reports
Recent Statistical Survey Reports October 2003
Current Topics
Nippon Keidanren announces individual requests for promoting
regulatory reforms
Public Policies
The Minister of Health, Labour and Welfare announces his plan to
make the 65-year-old retirement system a legal requirement
News Clippings
Electronic parts companies to hire more part-time workers ...etc
Special Issue
New attitudes: employees and lawsuits involving remuneration for
inventions
Statistical Reports
-Recent Statistical Survey Reports October 2003-
Features
Questionnaire Survey on Livelihood
Monthly Labor Survey (Preliminary Report in September, on Summer
Bonus) ...etc
http://www.jil.go.jp/english/estatis/esaikin/2003/e2003-10.htm
Current Topics
-Nippon Keidanren announces individual requests for promoting regulatory reforms-
The rapid globalization of economy and business is making the strengthening of Japan's international competitiveness a race against time. In view of this, Nippon Keidanren has announced specific individual requests to the government and the ruling party for regulatory reforms, categorized into 306 items covering 16 sectors. The underlying view is that whatever the private sector is capable of doing should be left to the private sector. Nippon Keidanren stresses the need to promote deregulatory reforms in a drastic and rapid manner.
There were 21 requested items covering the employment and labor sectors, including 12 newly added requests, such as full-scale lifting of the ban on pre-employment interviews of temporarily dispatched workers, abolition of industry-specific wage systems, and exemption of academic tests in technology proficiency tests. These were based on the 1,207 requests that had been sent in to Nippon Keidanren during a questionnaire survey targeting member corporations.
To boost industrial competitiveness and encourage companies to demonstrate creative ingenuity, Nippon Keidanren has compiled specific requests for regulatory reforms each year that reflect the actual demand for them at the economic front lines, and has strongly urged the government and the ruling party to realize such requests.
-Hitachi, Ltd. to abolish seniority wage system-
Starting next fiscal year (from April 2004), management and labor at Hitachi, Ltd. have agreed to completely replace the seniority wage system and instead apply a new wage system, that incorporates performance evaluations, to all Hitachi employees. They also agreed to abolish built-in annual wage increases. As a result, the merit/performance-based wage system that was first applied in 2000 to managerial staff will be extended to Hitachi's 30,000 non-managerial employees working in Japan.
Of the conventional salary calculation to be abolished, about 40% was basic pay related to the employee's educational history, age, and number of years of service, with the remaining 60% or so comprising occupational pay, set according to certification/eligibility and occupational duties.
Under the new system, an individual's ability to carry out his or her work will be evaluated on a scale of 1 to 5. To ensure that the evaluations are fair, the company reportedly will establish a new written standard that stipulates the criteria for occupational duties and behavioral processes.
Until now, Hitachi has led the electric appliance industry in wage negotiations. The complete abolition of its seniority-based wage system will have a major impact on the debate now taking place at other Japanese companies on how to review their salary systems.
Public Policies
-The Minister of Health, Labour and Welfare announces his plan to make the 65-year-old retirement system a legal requirement-
In a lecture given in Sendai City in October, Minister of Health, Labour and Welfare Chikara Sakaguchi announced his plan to raise the mandatory retirement age of corporate employees to 65, in principle, in conjunction with the phased raising to 65 of the age at which pension payments begin. Under the existing law, companies are "obligated" to continue employing their workers until the age of 60, while companies are "obligated to make efforts" to continue employing their workers until the age of 65.
Continued on; http://www.jil.go.jp/english/archives/emm/2003/no.4/65yearold.html
-The Ministry of Health, Labour and Welfare issues a government/ ministerial ordinance on the revised Labour Standards Law, calling for the doctrine of the abuse of dismissal rights to be thoroughly disseminated-
On October 22, the Ministry of Health, Labour and Welfare issued a notification to directors of various prefectural labor bureaus concerning the content of the government/ministerial ordinance that will come in the wake of the revised Labour Standards Law scheduled to come into force on January 1, 2004. The notification states that the doctrine of the abuse of dismissal rights (which is clearly set forth in the upcoming revised law) and the four requirements for dismissal imposed for reasons of reorganization should be thoroughly disseminated. Since "Items on retirement," which absolutely must be included in employment regulations, include "Reasons for dismissal," the notification describes the consultation/support setup at the time of accepting such dismissal orders.
In addition to these, the notification incorporates the following items: announcements for determining standards on conclusion, employment renewals, and discontinuations of term-based labor contract; the types of workers who can extend their contract period to 5 years; and examples of business sites to which the discretionary labor system for planning /analysis/survey work applies as a result of the requirements for eligibility of such business sites having been eased.
News Clippings
-Electronic parts companies to hire more part-time workers-
Various electronic parts companies are increasing their part-time and temporarily dispatched workers at their domestic production bases.
Kyocera will soon increase their number of part-time workers by 400. This means that there will be approximately 3,000 such workers altogether, with their share increasing from 16.1% of the total workforce at the end of March of this year to 17.9%.
Up to the previous fiscal year, companies have been implementing
restructuring measures, such as reducing their workforce. However,
with recent growth in orders received for components for digital
appliances, companies have begun securing human resources once again.
Their methods of securing workers have also diversified, such as
re-hiring employees who had left the company at the mandatory retirement
age.
(Nihon Keizai Shimbun, October)
-Former employee files a \1 billion lawsuit as a cost for invention-
A former worker at Canon who developed a basic technology for laser beam printers has filed a lawsuit at the Tokyo District Court, demanding that the company pay him 1 billion yen.
The former employee charged that, between 1974 and 1983, when he worked as a researcher at Canon, he developed a basic technology for laser beam printers, now the company's mainstay product. Earlier versions had suffered a problem with multiple images, caused due to the reflection of light, and his technology helped prevent this from occurring. The technology was praised by the company as being of "exceptional excellence," their highest assessment, and the ex-employee received the President's Most Outstanding Award. However, the company paid him only 858,000 yen in total, including the award. Although he demanded a re-evaluation, his request was turned down.
He therefore calculated the corresponding value of his technology
to be approximately 45.8 billion yen, based on the licensing fees
Canon obtained when it transferred this patent to another company,
as well as the number of printers shipped. In the lawsuit, he demanded
payment of 1 billion yen as his rightful share of this sum.
(Yomiuri Shimbun, October)
Special Issue
-New attitudes: employees and lawsuits involving remuneration for inventions -
In this issue's News Clippings, we feature an article describing how Canon was sued by a former employee for part of the value of his own invention. This type of problem surfaced in Japan for the first time last year.
Continued on; http://www.jil.go.jp/english/archives/emm/2003/no.4/newattitudes.html
