What small- to medium-scale businesses in Tokyo look for governments' labor administrations

The Tokyo Chamber of Commerce and Industry conducted a questionnaire survey in May 2003 targeting its member companies. (Of the 1,610 companies to whom the questionnaire sheets were sent, 304 sent in their replies, giving a collection rate of 18.9%.) The findings identified the employment and management policy problems that these companies were facing, as well as what they expect of the labor administration.

One thing that drew particular notice was that over 80% of the respondents agreed that the scope to which the "discretionary labor system" (the system of paying wages not by hours of work but in accordance with performance and/or professional duties) applies should be expanded among white collar workers.

Specifically, 26.6% (81 companies) said that the scope of application should be substantially expanded, and 56.6% (172 companies) said that it should be expanded gradually, indicating that 83.2% of the respondents wanted the application of the system to be expanded.

In the recent revision of the Labor Standards Law, moreover, one of the considerations made was that if the court ruled an employee dismissal to be invalid, a labor contract could still be terminated by the employee's company paying settlement money. The survey asked the respondents that, supposing settlement money were to be determined, how many months' worth of pay, on average, would be thought appropriate. Some interesting findings were obtained from their answers.

The average of the respondents' answers was 4.5 months. Supposing settlement money were to be determined according to the individual employee's number of years of service, the average number of months the respondents cited for employees working less than 5 years was 2.6 months. The longer the years of service, the higher the level of settlement money the respondents felt appropriate, with as much as 8.8 months for employees working 30 years or longer.

Moreover, as to the issue of adjusting employment and wages in view of a company's increased burden if social insurance coverage were to be expanded to employees working short hours, 39.5% of the respondents said that they would "adjust both employment and wages"; 19.1% said that they would "adjust employment"; and 18.1% said that they would "adjust wages." As can be seen, a total of 76.7% of the companies said that they would make adjustments of one form or another. Only 12.5% said that they would not adjust either employment or wages. It appears that the figures honestly reflect these companies' views.

Two primary problems that worry the managers of these small businesses are the rapid catching-up by China and other developing counties, with their advantages of cheap labor and rising technological expertise, and the worsening of their fund procurement status, which is evident in the banks' "credit withdrawal" phenomenon that is becoming increasingly apparent as major banks continue to dispose of nonperforming loans.

Today's small business top managers are fully occupied with managing their business for tomorrow. Surveys of this type demonstrate how small business managers perceive the recent trends in labor issues and reveal to some extent what they honestly feel about them.