Vol.37-No.08 August 1,1998
On May 28, the Tokyo District Court ruled that privatized Japan Railway (JR) companies are not required to employ former Japanese National Railways (JNR) workers. When the JR companies refused to employ members of Kokuro (the National Railway Workers' Union) after the division and privatization of the JNR in 1987, the Central Labor Relations Commission (CLRC) ordered the JR companies to take on the JNR's former employees. The ruling invalidates a series of orders by the CLRC that the JR companies rehire former JNR workers. The JR companies claimed the verdict as "quite reasonable." The CLRC and Kokuro, on the other hand, have appealed the case to the Tokyo High Court.
In April 1986, before it was divided into six companies and privatized, the JNR had more than 277,000 workers. Of that total number, 200,650 were rehired by the six JR group companies and about 70,000 were forced to leave their jobs.
The JNR Reform Law called for members of a Japan Railway Founding Committee to provide criteria by which former JNR employees would be chosen to work for the new organizations. The law provided for the old JNR to prepare a list of job seekers. Finally it stipulated that the committee members would pick employees from the JNR-prepared list of job seekers on behalf of the JR companies. The JR companies based their selection of former JNR workers upon the JNR Reform Law. About 7,600 JNR workers were neither rehired by the JR companies nor assured re-employment. They were employed by the JNR Settlement Corp. for a period of three years. The corporation was established to dispose of the JNR's long-term debts, and is to be dissolved in October 1998. Most of the 7,628 former JNR workers are Kokuro members who opposed the division and privatization of the JNR.
The Kokuro members either found jobs elsewhere in the public or private sector or were moved from their old JNR posts to new JR posts in other regions. However, 1,047 union members, (966 of whom were Kokuro members) had very much wanted to be rehired by a JR company in their own regions. Eventually, they were turned down and then dismissed by the corporation at the end of March 1990.
At a time the JNR prepared the list of job seekers, they claimed they were discriminated against because of their affiliation with Kokuro. Accordingly, they filed a complaint alleging unfair labor practices with the 18 Local Labor Relations Commissions across the nation.
The JR companies argued that the JNR, not the new JR companies, was responsible for the selection of workers on the list even if the action constituted an unfair labor practice. They argued that the JNR and the JR settlement are different corporations and that the JNR Settlement Corp. succeeded the JNR. The refusal of the JR companies to rehire former JNR workers developed into a conflict over where the responsibility as a employer lay.
The Local Labor Relations Commissions concluded that the JR companies are responsible because "the JNR and the JR companies are substantially the same in terms of what they do." The CLRC expressed the view that members of the JR Founding Committee had ultimate authority over the selection of JR workers and that the committee members were essentially in a position to exercise influence over the JNR's selection of job seekers, and the JNR authorities were committed simply to preparing the list and only to selecting JR workers. It found that the JNR was an "auxiliary organ" of the Founding Committee and concluded that the JR companies bore responsibility. The CLRC issued a series of orders stating that the JR companies were obliged to employ Kokuro's members. The JR companies then appealed to the Tokyo District Court.
The 11th Civil Affairs Division of the Court dismissed the CLRC's orders, and sided with the position taken by the JR companies. While suggesting that the JR companies were likely to be held responsible under certain conditions, the 19th Division pointed out that the CLRC had gone beyond its jurisdiction in ordering the JR companies to rehire Kokuro members. Like the 11th Division, it dismissed the CLRC's series of orders.
The government's bill to revise the Labour Standards Law (LSL) was presented to the ordinary session of the 142nd Diet. However, a decision on the bill was deferred to the next Diet session as the governing and opposition parties in the Lower House could not reach agreement.
The amendments relax basic requirements that an employer must have met to adopt the discretionary work scheme or the work hour averaging system. They will also require that working conditions be clearly written down and provide for the issuance of certificates of employment to workers when they retire.
Following a general explanation of the bill at the plenary session of the House of Representatives on April 21, the bill was referred to the Committee on Labor Affairs under the House of Representatives five times before May 15. After the question-and-answer sessions on May 18, it was expected that the bill was put to a vote in the committee on May 19, and then sent to the House of Councillors.
Throughout deliberations, the opposition parties, (including the Democratic Party of Japan) maintained that the discretionary work scheme would likely be adapted for all white-collar workers and that the role of a newly proposed labor-management committee that would presumably assume responsibility for overseeing the scheme was not clear. In order to resolve the situation, former Minister of Labour Bunmei Ibuki and Chairman Keishu Tanaka of the Labour Relations Committee met on May 14, to work out a compromise. Responding to the government's willingness to entertain some revisions to the amendment, senior members from the governing and opposition parties began to draft the amendment bill.
On May 16, the committee's senior members agreed on the amendment bill. The revised bill will postpone the implementation of the discretionary work scheme for one year. It will provide for the worker to approve any discretionary work arrangements. The senior members then decided to put the amendment bill to a vote of all committee members.
The Social Democratic Party, part of the governing coalition, does not have a senior member on the committee. Accordingly, it was not involved in drafting the bill. It opposed submitting the bill to a ballot, and argued that the proposals put forward by the senior members were unsatisfactory in terms of the restrictions contemplated for late-night work for men and women, the upper limits placed on overtime and holiday work, and the measures designed to prevent the spread of discretionary work scheme.
Prior to the SDP's departure from the governing bloc, the Liberal Democratic Party had demanded that all parties on the committee (save the Japanese Communist Party) agree on all of the amendments before putting the bill to a vote. On May 20, the senior members of the Lower House Labor Relations Committee met to discuss the SDP's decision to oppose the amendments. At the meeting, the LDP, the SDP, the DPJ, the Heiwa and Kaikaku Club, and the Liberal Party all agreed to carry the bill over to the next Diet session.
The bill was thus carried over to an extraordinary Diet session to be convened immediately after the Upper House election on July 12.
The number of tax-qualified retirement pensions, one of the typical corporate pensions, has dropped sharply. In 1997, the number of tax-qualified retirement pensions dropped to 1,933, the largest fall ever recorded. It seems that the increasing number of companies have abandoned their corporate pension plan because of corporate bankruptcies resulting from the slump in the national economy and their worsening business performance.
A tax-qualified retirement pension can be established by firms with 15 or more employees. They are established mainly by small and medium-sized firms. In the mid-1980s and onward, many small and medium-sized firms began to adopt the plan to secure quality people, and in fiscal 1993, the number of such pension schemes reached 92,467. Thereafter, during the recession that followed the economy's "bubble" years, the number gradually decreased. It fell by 112 in 1994, by 890 in 1995, by 1,222 in 1996 and by 1,993 in 1997. The number of employees participating in such pension plans dropped by about 160,000 in 1997 and stood at 10,460,000 people at the end of the year.
Corporate bankruptcies owing to the economic slowdown, the growing number of firms abolishing their pension plans, and the long-term low interest rate undermined the health of the assets backing up many tax-qualified retirement pension schemes. Accordingly, if a company goes bankrupt or has to abolish its tax-qualified retirement pension plan, its employees become unable to receive the pensions they expect to receive.
Voices calling for the government to protect the members of such schemes will likely become stronger in the years ahead. In response to this, the Ministry of Finance, the Ministry of Health and Welfare, and the Ministry of Labour are studying ways to draft regulations that will protect corporate pensions. The aim is to provide a mechanism that will protect all participants, and will apply to all corporate pensions (including tax-qualified retirement pensions).
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