Court rules wage cut by merit is unfair

A court on February 26 ruled that wage cuts and demotions at an indicator manufacturer in Kawasaki City in Kanagawa Prefecture is not justifiable even under the newly introduced performance-based wage system.

The Yokohama District Court ordered measuring-machine maker Noise Laboratory Co., Ltd. to put its employees back into their former positions and make up the difference for them in wages and bonuses.

Noise Laboratory in July 2001 refused to hold collective bargaining with the All-Japan Metal and Information Machinery Workers' Union (JMIU) Noise Laboratory Branch and unilaterally changed the wage system to one based on work performance. The company then demoted JMIU members to lower posts and cut their monthly wages by up to 80,000 yen. In January 2002, the union members filed a lawsuit against the company, demanding reinstatement to their former positions and the wage difference be paid.

The judge pointed out that any change in or creation of work rules, which may have a negative impact on workers' rights and working conditions, must be based on needs.

The head of the JMIU Noise Laboratory Branch said, "I'm very glad that our argument has been upheld in court." In a published statement the JMIU said, "It was an epoch-making decision revealing how problematic the performance-based pay system is." (end)