-----The Japan Labor Flash No.60------Email Journal May 1, 2006-----

[Statistical Reports]
Main Labor Economic Indicators
[Current Topics]
5.9 Successive Days of Holiday for the Average Worker during Golden
Automobile Electric and Electronics Firms the Driving Force for Pay
[Public Policies]
Trial Telework at MIC Wins Favorable Evaluation
MHLW Advises Tokyo Metropolitan Police Department and Other Public
Bodies to Stick to their Plans to Hire Certain Number of Disabled
[News Clippings]
New Recruitment System in 19 Job Categories
Japanese 401K Now Adopted by 6600 Firms
[Special Issue]
Employers Now Obligated to Employ Workers up to Age 65
[Contact Us]

[Statistical Reports]

-Main Labor Economic Indicators-


[Current Topics]

-5.9 Successive Days of Holiday for the Average Worker during "Golden

In April, the Ministry of Health, Labour and Welfare published the
findings of a Survey on Successive Holidays during "Golden Week" in
2006. The survey was aimed at 1,330 business establishments across
the country, and the average number of successive days (three or more)
of holiday among the establishments surveyed was 5.9, an increase of
0.8 day from the previous year's 5.1. The total number of days of
holiday which an average worker can take during this "Golden Week"
is 6.2 (6.3 in the previous year). Business establishments planning
to provide seven or more days-off in succession totaled 255, accounting
for 23.7 percent of all establishments which plan to close their entire
business operations for the holiday. Of the establishments surveyed,
24.4 percent, including 38.7 percent of those in the manufacturing
sector, will make May 1 (Mon) and 2 (Tue) additional holidays.

-Automobile Electric and Electronics Firms the Driving Force for Pay

According to the third-round revised compilation of the results of
this year's spring joint wage negotiations (shunto) published on April
12 by Rengo (the Japanese Trade Union Confederation), the average wage
increase in response to union demands (according to the average wage
increase method - weighted average per union member) was 5,543 yen,
an increase of 1.86 percent. This was 494 yen, or 0.13 percentage
points, higher than the figure marked the previous year.

On April 3, the People's Spring Struggle Joint Committee representing
Zenroren (the National Confederation of Trade Unions) and other labor
organizations published the (third-round) compilation of the results
of responses to union demands for pay hikes. The average pay hike
among the 259 unions which received responses from their companies
was 5,736 yen, an increase of 1.93 percent, an increase of 145 yen
or 0.09 percentage points over the figure achieved the previous year.
On the other hand, a Nippon Keidanren (Japan Business Federation)
survey shows that the weighted average of pay hikes among leading
companies was 5,595 yen, an increase of 1.70 percent. Nihon Keizai
Shimbun suggests in its survey that it was automobile, electric and
electronics firms and leading firms in the metal industry, whose
business performance has recovered and which are showing an active
demand for labor, that served as the driving force in these wage
increases. In the meantime, quite a few small and medium-sized
enterprises, where wage levels are relatively low, kept pace with
the large firms in their decisions: according to a compilation
published on April 13 by Rengo's Small and Medium-sized Enterprises
Joint Struggle Center, the average pay hike among the 1,380 small
and medium-scale unions (with less than 300 members) that reached
agreements was 4,492 yen (including regular pay hikes), a rate of
1.79 percent and an increase of 415 yen, or 0.16 percentage points,
over the figure marked the previous year. To back up unions which
had not yet seen settlements, the Center set a minimum benchmark for
"the amount which can keep existing wage curves secure" for those
where it is possible to calculate the wage curves of their union
members, and another benchmark of 4,500 yen for those where it is not.

US$=\113 (May 1, 2006)

[Public Policies]

-Trial Telework at MIC Wins Favorable Evaluation-

In April, the Ministry of Internal Affairs and Communications (MIC)
compiled and published the results of a trial "telework" system for
its personnel carried out between October 31, 2005, and February 28,
2006. The participants say that they were able to perform a wide range
of duties while engaged in telework, including planning, liaison and
coordination, information gathering and data processing, drawing up
of documents and other written materials, etc.. Overall, about 80
percent of the participants gave favorable marks to telework, saying,
for example, that they had an increased amount of time in which they
could concentrate on work. At the same time, however, while more than
60 percent of workers in managerial posts replied that they had no
particular problem in handling their subordinates while they were at
telework, some 30 percent admitted that they found some problems,
saying that it was still necessary to review methods for communication,
consultation, and briefing, and to consider the methods of assessing
work performance more suitable to this working style.

(See JLF No.31 [Public Policies] at

-MHLW Advises Tokyo Metropolitan Police Department and Other Public
Bodies to Stick to their Plans to Hire Certain Number of Disabled

On March 31, the Ministry of Health, Labour and Welfare advised a
number of local public agencies to implement their programs for
employment of disabled workers. The agencies concerned include the
Medical Bureau of Iwate Prefecture, the Tokyo Metropolitan Police
Department, the Kochi Prefectural Police, and the prefectural
education committees of Aomori, Yamagata, Chiba and Okinawa prefectures.
The Law for Employment Promotion of Persons with Disabilities stipulates
statutory employment rates for disabled workers (1.8% for private
companies, 2.1% for national and local public agencies and 2.0% for
education committees); those which fail to meet these rates are
required to draw up plans for future compliance and receive advice
from the Ministry of Health, Labour and Welfare when they are unable
to attain 50 percent of the rate specified in the plans. This was the
first time for the names of agencies given such recommendations to be
published, but the Tokyo Metropolitan Police Department has already
received three.

[News Clippings]

-New Recruitment System in 19 Job Categories-

Bic Camera, a leading volume retailer of home appliances, is to
introduce a new employment management system for new employees joining
the company from spring 2007 onwards. The jobs will be classified into
19 categories, such as sales of personal computers, audio devices, etc.,
planning, accounting, and system engineering; new recruits will be
promised, before joining the company, appointment to the sections in
which they wish to work.

The company will hire some 590 graduates from schools and universities
in spring 2007. Of these, about 400 university graduates and others who
wish to work in the Tokyo metropolitan area will be subject to the new
employment system. It is rare in the distribution industry to adopt a
system where jobs are classified into as many as 19 categories, though,
in other industries, Mazda Motor Corp., Kao Co., Konami Co., and others
have adopted similar systems.

In the distribution industry, it is quite common to hire new graduates
as "career track employees" who are assigned first to the sales floor,
and then reassigned to various sections of the headquarter according to
their abilities. This process, however, makes it impossible to consider
the will of new recruits regarding their assignments, and quite a few
new workers are, it seems, dissatisfied with their jobs. Through the
new system, Bic Camera aims to secure competitive workers at a time
when the economy is recovering and an increasing number of firms are
taking on more new recruits.
(Nihon Keizai Shimbun, March)

-Japanese 401K Now Adopted by 6600 Firms-

A rapidly increasing number of firms have been adopting the Japanese
401k system. According to the Ministry of Health, Labour and Welfare,
more than 6,600 firms had adopted it as of the end of March 2006, an
increase of 50 percent (2,300 firms) from the previous year. The number
of participants was nearly 1.8 million (as of the end of January), an
increase of approximately 550,000 persons. In Japan, the defined
-contribution pension plan scheme began to be adopted in 2001 by an
increasing number of, in particular, large firms such as Toyota Motor
Corp. and Hitachi Corp.. Now, however, the scheme is becoming widely
accepted among quite a few small and medium-sized enterprises as well.

Thanks to the sharp increase in the number of participants, the
balance of investment trust funds for the defined-contribution pension
plan doubled to 800 billion yen in the fiscal year ending March 2006.
With the intensified trend of money shifting from simple savings to
investment, the Japanese 401k system seems likely to expand further.

(See JLF No.7 [Current Topics] at

(Nihon Keizai Shimbun, March)

[Special Issue]

-Employers Now Obligated to Employ Workers up to Age 65-

In April 2006, a revised Law concerning Stabilization of Employment
of Older Persons took effect, and employers are now obligated to
continue hiring workers up to the age of 65. The mainstay of the latest
revision concerns the obligation of employers to take measures to secure
employment of elderly workers: they must either (i) raise the mandatory
retirement age from the current age of 60; (ii) adopt a continued
employment - i.e. re-employment or employment extension - scheme while
leaving the mandatory retirement age at 60; or (iii) abolish the mandatory
retirement age itself. This revision aims to fill the gap in income
between retirement and commencement of pension payments caused by the
rise in the pensionable age of the Employees' Pension Fund.

(See full translation of the Law at

Continued on;

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