July 31, 2019

Akahata on July 29 learned that Tokio Marine & Nichido Fire Insurance Co., Ltd. recently decided to reduce the number of workers who work under the so-called discretionary labor system from the current 2,000 to 500 by January 2020.

Japan’s major non-life insurance company made this decision in response to a warning given by the labor law enforcement authority against its illegal use of the system.

The discretionary labor system is one of the accepted flexible work schedule under the Labor Standards Law. It allows employers to make an agreement with workers that wages will be paid for a previously agreed-upon number of hours instead of the actual number of hours worked. Accordingly, this work system is often criticized as creating a hot bed of unpaid overtime. Under the law, this system is applicable only to workers whose jobs require specialized skills and knowledge as well as to workers doing managerial function-related tasks, such as planning, design, and R&D.

Currently, 2,000 of 17,000 Tokio Marine & Nichido employees work under the discretionary labor system. Of them, 1,500 work in sales and claim payments. Regarding this situation, the insurance company has been notified by a Labor Standards Inspection Office about a potential labor law breach, and decided to exempt the 1,500 workers from the discretionary work schedule.

In the non-life insurance industry, Sompo Japan Nipponkoa Insurance Inc. in 2017 stopped forcing workers in sales positions to work under this unfair work arrangement after Japanese Communist Party Secretariat Head Koike Akira took up this matter in Diet questioning.

Past related articles:
> JCP efforts in Diet push major insurance company to stop imposing long working hours on workers [August 1, 2017]
> Major insurance company illegally forces workers to work long hours: JCP Koike [March 23, 2017]