Vol.40-No11 November 1, 2001
The revised Employment Measures Law was put into effect on October 1, 2001. (For details of the law, see Public Policy in the May 2001 issue of the Japan Labor Bulletin.) Of the many revisions, particular attention is being paid to the stipulation concerning the abolition of age limits in recruiting or hiring.
A Special Survey of the Labour Force Survey conducted in February this year by the Ministry of Public Management, Home Affairs, Posts and Telecommunications revealed that the largest proportion of unemployed persons, some 690,000 out of 3.18 million, attributed the reason for their failure to find new a job to “my age, which disqualifies me for any advertised jobs.” By age group, this answer was chosen by about 110,000 unemployed people in all age groups between 15 and 44, whereas it was chosen by about 570,000 in age groups of 45 and above, showing that age limits for recruiting or hiring were the most common obstacle to employment for middle-aged or older workers.
Accordingly, the Ministry of Health, Labour and Welfare decided to incorporate a measure in the revised law which requests companies to conduct recruitment and hiring activities regardless of age. The ministry drafted guidelines for the abolishment of age limits and solicited public opinion via the Internet. The draft was submitted to the Labour Policy Council without major changes.
The final guidelines specify cases where reasonable age limits for recruitment and hiring are permitted. In other words, unless companies' recruitment activities accord with the guidelines, age limits upon recruiting or hiring will not be regarded as reasonable and companies will not be allowed to impose such limits. The following 10 cases are specified in the guidelines as acceptable reasons for imposing age limits:
| (1) | cases where recruiting or hiring is intended for workers in specific age groups, such as new graduates, for the purpose of career development over long tenures; |
| (2) | cases where recruiting or hiring is intended for specific age groups because it is particularly necessary for companies to maintain or restore the demographic structure of their employees for the purpose of maintaining business activities or passing on skills and know-how; |
| (3) | cases where recruiting or hiring is intended for workers under a certain age with consideration for a mandatory retirement age or maximum age, and for the periods necessary for new workers to demonstrate their abilities and to build up professional skills; |
| (4) | cases where recruiting or hiring is intended for workers under a certain age in situations where in order to make wage payments regardless of age to new employees, companies will be required to revise present regulations determining wages mainly in accordance with age; |
| (5) | cases where recruiting or hiring is intended for workers in specific age groups because company sales or service activities are aimed at specific age groups; |
| (6) | cases where recruiting or hiring is intended for workers in specific age groups in the art and entertainment fields; |
| (7) | cases where recruiting or hiring is intended for workers in specific age groups because the duties require prevention of labor accidents and maintenance of safety; |
| (8) | cases where recruiting or hiring is intended for workers under a certain age because the duties necessitate a certain physical condition; |
| (9) | cases where recruiting or hiring is intended for middle-aged and older workers in line with administrative policies; and |
| (10) | cases where recruiting or hiring concerns duties whose execution is prohibited or restricted to workers in specific age groups. |
Even if the authorities interpret the guidelines as indicating exceptional cases, some question the actual effects of the law. (The law simply states that “employers should make efforts not to exclude the workers in question from recruiting or hiring due to their age,” and does not impose any penalty for violation.) If one takes into account the legal prohibitions on age discrimination in force in some countries, it seems that the measures embodied in the guidelines may not in fact be able to produce effective results, though the outcome will depend on administrative handling of the law. Nevertheless, the measures are undoubtedly a first step towards achieving an “age-free” society including bans on age discrimination in Japan.
The guidelines conclude by emphasizing the need for future revisions in line with the social and economic situation. It remains to be seen how such revisions are made, and whether or not the guidelines will achieve their objectives.
According to the Ministry of Public Management, Home Affairs, Posts and Telecommunications (MPHPT), the seasonally adjusted unemployment rate in July 2001 saw an increase of 0.1 percentage point from the previous month, reaching five percent for the first time since 1953, when postwar unemployment statistics were first compiled. Data from the Ministry of Health, Labour and Welfare showed that the active opening rate in July fell 0.01 point from the previous month to a seasonally adjusted figure of 0.60, creating an increasingly severe situation for workers.
The Labour Force Survey of the MPHPT showed that there were 3.3 million unemployed in July, the fourth successive monthly increase, whereas the number of people working was 64.52 million, the fourth successive monthly decrease. By industry, the number of people employed in manufacturing dropped to 12.88 million, 580,000 less than the same month the previous year. In construction as well, the figure dropped to 6.29 million, 210,000 less than the same month the previous year.
Faced with a record unemployment rate, the government launched two types of employment subsidies. The “Special Grant for Emergency Employment Creation,” hitherto applied to limited areas with high unemployment rates, was applied on a nationwide basis for six months. It subsidizes companies that regularly hire workers between the ages of 45 and 59 who were involuntarily unemployed or in receipt of public or similar vocational training. The subsidy is ¥300,000 per worker. Another scheme, “Grants for Employment Development for Specified Job Applicants,” is intended for companies hiring workers who are 55 or over, or who are disabled.
A revision of the subsidy, limiting coverage to workers 60 or over, was to go into effect in October. However, the scheme incorporated an emergency measure lowering the eligible age for workers to 45 when the unemployment rate reaches five percent, and the new subsidy was based on this emergency measure. Moreover, employment subsidy schemes have so far stipulated employment via Public Employment Security Offices as a prerequisite for grants, but from October, to encourage industry-to-industry and company-to-company labor mobility, the subsidies will be available for hiring via private job placement companies. Aside from the above mentioned two types of employment subsidies, the prerequisite for grants has been relaxed for “Special Grants for Creating Employment in New and Growth Sectors,” which provides ¥700,000 per new employee.
Also in October, other subsidy schemes were reviewed or newly launched. “The Employment Adjustment Subsidy,” which had played an important role in encouraging companies to maintain employment, has been criticized for allowing depressed industries to survive. Accordingly, eligibility for the subsidy is now to be considered on an individual company basis, not on an industry basis, and the payment duration has been shortened from “200 days within two years” to “100 days within one year.” At the same time, a “Subsidy to Support Labor Mobility” has been established to support the governmental policy of promoting labor mobility without passing through unemployment. As a way to subsidize companies that plan to restructure by shedding 30 or more employees within a month, this scheme provides for paid holidays for the laid off workers. The subsidy of ¥4,000 per day per person, aims at facilitating job-searching activities of the workers in question. At the same time, subsidies of ¥100,000 will be granted as training expenses to companies hiring these workers.
In addition, government employment measures under consideration include an extension of the maximum duration (three years) for dispatching workers aged 45 and above; extending unemployment benefits during training; and a loan system to cover living costs for the self-employed and part-timers who have lost jobs but are not covered by employment insurance.
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