November 1, 2024

Akahata editorial (excerpts)

The Act on Ensuring Proper Transactions Involving Specified Entrusted Business Operators (“Freelance Act”) which was unanimously approved in April 2023 went into effect on November 1.

Under the law, clients are obliged to provide contracts with the details of their business transaction in writing; set the due date for payment of remuneration to freelancers and make the payment on time; accurately display recruitment information; and give prior notice of and disclose the reason for mid-term termination or non-renewal of work contracts.

Clients are prohibited from conducting acts mentioned in the new law such as refusing to accept the freelance work without grounds attributed to the freelancer; reducing the remuneration without grounds attributed to the freelancer; and having the freelancer accept a change in order details without incurring associated costs.

Many freelancers are facing unreasonable cuts in remuneration and unilateral termination of contracts. Under this situation, setting rules for proper transaction is an important first step.

Freelance workers are excluded from legal labor protections and not entitled to labor rights on the grounds that they have no employment relation with their clients. The need is to recognize freelance workers as “workers” and protect their labor rights. It is also urgently necessary to enact legislation to this effect.

There is a growing trend globally to recognize those who are classified as self-employed, including platform workers, as “workers” based on whether or not they perform their work under clients’ control and instructions, whether or not they are financially subordinate to clients, and other criteria.

The ILO Employment Relationship Recommendation, 2006 (No.198) provides a legal presumption that an employment relationship exists where one or more of the 14 ILO-set indicators is present. The EU’s “Platform Work Directive” which was adopted in April presumes that when facts indicating control and direction are present, an employment relationship exists.

In contrast, Japan’s Labor Standards Act defines “workers” in a limited way based on outdated 40-year-old criteria.

The Japanese Communist Party in October 2023 published a bill to establish fair rules for non-regular workers which include freelance and gig workers who are outside the traditional employment relationship. Based on the global trend, the bill, for example, proposes to revise the existing criteria so that those classified as self-employed will be recognized as “workers” based on their actual conditions and to ensure rights to organize, bargain collectively, and strike for freelance and gig workers.

Past related article:
> JCP releases bill to establish fair rules for non-regular workers [October 19, 2023]