A job for life, or not? A class divide deepens in Japan

Tokyo, Japan Published: Nov 27, 2020, 07.16 PM(IST)

Coronavirus in Japan Photograph:( AFP )

Story highlights

Japanese law mandates that companies avoid 'unreasonable' differences in how they treat employees, but the meaning of the term is ill-defined

For more than a decade, Setsuko Hikita spent her working days selling snacks and newspapers in the bowels of Tokyo’s bustling metro system.

Amid the chaos of morning commutes and the scramble to catch the last train home, she kept her employers’ tiny kiosks a haven of well-ordered commerce. Her company once awarded her a citation for her dedication and hard work.

What it did not give her was equal pay.

Over a 10-year period, Hikita earned about $90,000 less than many of her co-workers, and she was denied benefits like a retirement allowance. It wasn’t because they had more experience or were more competent. It was just that they had lifetime employment status and she did not.

So Hikita sued. Last month, after more than six years, the country’s Supreme Court rendered a verdict: Her employer was under no obligation to provide her with the same retirement allowance — a lump-sum payment on leaving the company — it gave colleagues who did identical work.

The ruling is one of two recent court decisions that threaten to further entrench the long-standing divide in Japan between so-called regular workers, who have lifetime employment and attendant benefits, and the growing ranks of nonregular workers, many of whom are women.

The effects of these divisions have been especially pronounced during the coronavirus pandemic. When Japan’s economy faced its worst months in late spring and early summer, companies cut loose tens of thousands of nonregular workers, with women bearing the brunt of the job losses. Many regular employees were put on furlough, retaining their positions.

Concerns about the precarious state of nonregular workers long predate the pandemic.

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Employers have for years chipped away at the system of lifetime employment that evolved in Japan after World War II, arguing that increased flexibility to hire and fire employees will increase economic efficiency. Now, nearly 37% of the country’s labor force, or more than 20.6 million workers, are nonregular employees, according to the latest government statistics, up from around 16% in the early 1980s.

Among Japanese women in the workforce, more than half are nonregular employees — an example of the limits of Japan’s push in recent years to elevate women in the workplace, a program known as womenomics.

Prime Minister Yoshihide Suga, addressing parliament this month, emphasized the need to fight rising unemployment among nonregular workers, and women in particular, pledging to “firmly take necessary measures.”

Promises like these sound all too familiar to labor activists. They fear that the Supreme Court’s decisions have “thrown cold water” on such vows to reform the system, said Shigeru Wakita, professor emeritus of labor law at Ryukoku University.

Japanese law mandates that companies avoid “unreasonable” differences in how they treat employees, but the meaning of the term is ill-defined. In the case of Hikita’s lawsuit and a separate suit brought by a female employee at a medical school in Osaka, judges ruled that the organizations had not violated that standard despite vast gaps in compensation and other benefits.

“If the courts don’t recognize this case as unreasonable, then what on earth is unreasonable?” asked Mitsuteru Suda, chairman of a labor union in Tokyo.

A tentative answer to that question came when the court issued a third ruling last month on conditions for nonregular workers. The judges ruled in favor of plaintiffs who had sued their employer, Japan Post, after it refused to pay them overtime to help with the spike in deliveries around New Year’s, Japan’s most important holiday.

But even that ruling is likely to further legitimize the prevailing employment system, Suda said. While the ruling will force the company to reassess its employment practices, it found fault only with the degree of discrimination, not the practice itself.

“The ruling stands on the side of the employers, giving a stamp of approval of discrimination,” he said. “That is unacceptable.”

In the Japanese employment system, the line between regular and nonregular workers is drawn early, and the result is a sharp class divide.

Each fall, companies across the country hold recruitment drives for high school and college students who will graduate in the spring. For many, the monthslong process is the most important period of their lives.

Those who find jobs will win employment for life. Those who do not are cast into the wilderness of irregular employment.

Regular workers, known as seishain, receive two annual bonuses, each typically worth at least one month’s salary and sometimes much more. They have benefits, which can include housing. They are nearly impossible to fire. And they get a generous pension plan.

By contrast, nonregular workers can be fired much more easily. They are paid less, and employers are not required to provide them with the same level of benefits that their regularly employed colleagues receive.

Midcareer hiring that brings nonregular workers into the regular workforce has increased in recent years, said Andrew Gordon, a professor at Harvard who specializes in the history of labor in Japan. But it remains rare.

Businesses employing regular workers right out of school like to argue, he said, that “we’re not hiring people with specialized knowledge and experience, but we’re hiring human capital that can be formed.”

“They fear that somebody from the outside won’t be able to adjust to their particular company’s way of doing things even though, functionally speaking, it might not be that different,” he added.

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