Vol.40-No.12 Decenber 1, 2001
The practice of transferring workers from a parent firm to a subsidiary is commonly referred to as shukko. There are two types of shukko: zaiseki shukko, or shukko for short, occurs when a parent firm formally retains on paper their transferred employees while they are transferred to and work at a subsidiary. Usually, these employees are called back to the parent firm when the transfer period is over. The other type, tenseki shukko, or iseki for short, occurs when the transferred worker terminates his/her employment relationship with the parent firm and is formally re-employed by the subsidiary. In both cases, the practical procedures are undertaken by the two companies involved, and the worker is transferred under working conditions agreed to by them.
The results of the latest survey conducted by the Ministry of Health, Labour and Welfare reveal that there are many transfers with a duration exceeding five years.
Transfers have traditionally been realized in the form of workers moving from a parent company to affiliates or related companies. Their aims include on the one hand active aspects such as supplementing a personnel shortage, lending technical or managerial support, giving workers an opportunity to improve their abilities, or strengthening ties between two companies in terms of personnel exchange. Passive aspects include cutting labor costs, reducing an excess of labor in relation to existing posts, or adjusting employment levels when the transferring company faces economic sluggishness. In addition, workers are transferred when a new company is established. In some cases, moreover, a head company employs all workers and distributes them — in the form of transfers — to its group companies.
Transfers thus are conducted for various reasons, and at the same time serve as an effective device in promoting “labor mobility without passing through unemployment,” in that they help to eliminate mismatches between labor supply and demand at the inter-industry and inter-group company levels. To assist in smooth transfers not only within group companies but also outside the group, the Industrial Employment Stabilization Center of Japan promotes the inter-flow of workers. The government has also been discussing possible problems arising from the transfer of workers to non-group companies and necessary countermeasures, so as to encourage such types of transfer.
Since transfers are a form of labor mobility dependent upon inter-company agreements, the duration of service and working conditions for transferred workers varies. The current situation is documented below, aided by results from the Comprehensive Survey for Employment Conditions (formerly known as the General Survey on Wages and Working Hours System) released by the Ministry of Health, Labour and Welfare. (The survey targeted 5,326 private corporations with 30 or more regular employees at headquarters, with an effective reply rate of 90.1%. The results are as of January 1, 2001.)
The percentage of firms with schemes for transferring workers stood at 37.3 percent. As for the form of transfers (multiple replies), 24.5 percent have schemes to transfer out workers, while 29.5 percent have schemes to accept transferred workers. The larger corporations were more likely to have a transfer scheme: 88.0 percent of firms with 1,000 or more employees have schemes to transfer out workers, and 71.2 percent have schemes to accept workers. Moreover, companies with programs to either transfer or accept employees, or both, accounted for 92.5 percent of those surveyed. The percentage of firms with zaiseki shukko schemes to transfer workers was 23.4 percent, while the percent of firms with iseki schemes was 7.6 percent. Companies which accepted workers as part of a zaiseki shukko transfer totaled 28.6 percent, and that of firms which accepted workers as part of a iseki transfer was 5.7 percent. Among companies with 1,000 or more employees, these figures stood at 87.5 percent, 44.2 percent, 69.7 percent, and 22.1 percent, respectively, showing higher figures than the average.
Of the firms with zaiseki shukko schemes, 39.1 percent set a time limit on the transfer, but the majority do not. Of those which set a time limit, 21.2 percent transferred workers for “one year or less,” 23.6 percent at “more than one year but not over two,” and 26.2 percent at “more than two years but not over three years.” Therefore, in more than 70 percent of cases, the period of transfer is three years or shorter. However, taking into consideration firms which do not set a time period, the proportion of firms transferring out workers for more than five years was the highest, 34.1 percent (see Statistical Aspect on page 3). Incidentally, time periods do not show differences in relation to the size of companies.
The survey also asked firms with zaiseki shukko schemes about the wages of the workers transferred. The results showed that the percentage of firms applying their own wage criteria was 78.9 percent when “the criteria was lower in the firms that the workers were sent to,” and 55.0 percent when “the criteria was higher in the firms that the workers were sent to.” Ways of making up the difference when the wage level was lower were “companies which transferred the workers make up the difference” (51.8%), while 26.1 percent of the companies to which the workers were transferred made up the difference.
While a high percentage of firms maintain the wage of the workers at the level of the company which transferred them, working hours are, in many cases, adjusted to the standards of the firms accepting the workers. A high 70.6 percent of firms follow the practice of the companies the workers actually work for regarding “scheduled working hours per day;” 70.3 percent followed the practice for “scheduled weekly working hours,” 68.4 percent for “weekend holidays,” and 66.6 percent for “holidays apart from weekends.” On the other hand, where criteria for “annual paid leaves” are concerned, 64.2 percent follow those of the companies which transferred workers.
Incidentally, many transfers resulting from a lack of suitable posts, or for the purpose of employment adjustment, take the form of zaiseki shukko (an initial transfer with the workers' affiliations unchanged for a certain period), followed by a switch to iseki (registration to the companies they are actually working for), which involves termination of employment contracts with the original company. According to the survey, among firms with zaiseki shukko schemes, 22.3 percent answered that there was a possibility that zaiseki shukko transfers may develop into iseki transfers; the corresponding figure for companies with 1,000 or more workers was 42.6 percent.
In late September, the Temporary Work Services Association of Japan, an organization of companies in the worker dispatching industry, released a report concerning the work situation and personal views of dispatched workers. The survey targeted dispatched workers who are registered at dispatching companies and work on the basis of one-shot job contracts. The questionnaires were distributed via 328 dispatching companies affiliated to the Association, and valid replies were obtained from 9,151 workers, an effective rate of 23.6 percent.
The survey found that while the highest percentage, 45.2 percent, answered they “would like to continue working as dispatched staff,” a significant proportion, 36.6 percent, said that they “would like to work as regular staff if possible.”
Where level of satisfaction is concerned, a majority were content with “human relationships in the workplace” (57.4%), and “the content of their duties” (46.7%). On the other hand, a relatively small share, some 30 percent, are satisfied with “wage levels” and “opportunities to improve their job skills.” On the whole, those who were “satisfied” or “more or less satisfied” accounted for 40.7 percent, and those who were “dissatisfied” or “more or less dissatisfied” totaled 21.4 percent. A special feature was the large number of “in-between” workers who answered “cannot tell,” accounting for 36.8 percent.
Concerning the legal infrastructure for dispatching workers, more than half answered “do not know,” showing their lack of interest in and knowledge of the legal aspects.
The survey asked those who worked 10 months or more per year about the number of job contracts they had made during the previous year. The most frequent answer was four (27.8%), followed by two (25.2%), one (23.3.%), three (9.8%), and five (4.7%). To the question as to whether the companies to which they were dispatched changed during the previous year, a majority, 67.3 percent, said that they had stayed with one company. The Association deduces, from these findings, that typical dispatched workers, who engage in jobs on a regular basis, have their job contracts renewed every three or six months, and continue working at one location.
Apart from these questions, the survey asked about social insurance coverage, with the highest proportion, 50.2 percent, answering that they were “insured with the social insurance plan of the dispatching company they belong to,” followed by 22.3 percent insured under the National Health Insurance and National Pension plans, 14.6 percent were insured as dependents, and 4.5 percent did not apply for any insurance plan. At the same time, judging from the fact that only a small number, 3.4 percent, said that they were refused insurance under the insurance plan of the dispatching company they were registered with, the survey report concluded that the application of social insurance to those requiring coverage is being successfully encouraged.
As for the characteristics of the dispatched workers surveyed, women accounted for 95.6 percent. By age group, those in their 30s comprised 46.9 percent, and those in their 20s 40.6 percent. Regarding martial status, 63.6 percent are unmarried, while 23.0 percent have the status of dependent of other family members. As for job type, a conspicuously high proportion of these workers, 56.3 percent, operate office equipment, while a mere seven percent are engaged in “sales.”
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