Individualization of Employment Relations in Japan

Mr. Hiromasa Suzuki
Emeritus Professor, Waseda University
Associated researcher at IDHE-ENS-Cachan, France Fellow Researcher


Although the legal construction of employment relations created just after WW II has assumed that collective bargaining would determine the conditions of work of most workers, the scope of collective bargaining continues to shrink in recent years (unionization rate was 17.5 % in 2014). Accordingly, the conditions of work of the majority of employees are now determined by individual negotiation or by the unilateral decision of employers. However, employers are not entirely free in their decision to the extent that they are bound by legal minimum conditions (minimum wages, hours of work, etc.). Moreover, enterprises employing more than 10 workers are required to write down work rules, a copy of which should be sent to the office of labour inspection. In case of individual disputes concerning conditions of work or dismissals, until recent years, there was no specific mechanism of conciliation and arbitration (Civil courts are open to any labour dispute but their lengthy process and costs incurred make them little suited for individual disputes).


This situation is now changing. Individual labour disputes came to surface in the 1990’s, when many Japanese enterprises had to cope with the decline of domestic consumption, increasing global competition and a high value of the yen. Many large Japanese enterprises had to restructure their activities and transfer their sites of production to emergent countries. In this process of restructuring, middle managers were particularly targeted by the redundancy measures, because their pay was relatively high and they were not covered by labour union (Law excludes managers from the scope of labour unions). In another instance, disputes arose on the question of overtime pay of a supervisor/manager of small chain restaurants. If he was just an employee with supervisory function, then he was entitled to overtime pay. These cases, often supported by an association of lawyers, went to the civil court.


In view of the rise of individual labour disputes, the labour administration, as well as the judicial authorities have recently created several mechanisms for individual labour disputes. By the law of 2001, labour administration is now entrusted to deal with individual labour disputes; it may give advices and services of mediation on a voluntary basis. In 2013, the administration dealt with around 250.000 cases, of which 5.000 went to mediation. In 2006, a labour tribunal was set up to expedite individual labour disputes: this court is composed of a professional judge and two lay judges drawn from employers’ and worker’s lists. The court will have at most three sittings before handing down its decision. Around 3.500 cases are now treated each year, most of which end up by amicable agreement. Other judicial mechanisms as the civil court or the labour commissions relaxed their own regulations so as to make them possible to receive individual disputes.   

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