Japan Press Weekly

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2008 December 17 - 22 [LABOR]

Large corporations should cancel massive dismissal of temporary and fixed-term contract workers and fulfill their social responsibilities: JCP’s statement to Nippon Keidanren

The following is the statement Japanese Communist Party Chair Shii Kazuo submitted on December 18 to Japan Business Federation (Nippon Keidanren) Chairman Mitarai Fujio:

Amid the economic downturn triggered by the U.S. financial crisis, temporary and fixed-term contract workers are being dismissed on a massive scale. They are denied contract renewals or fired before the expiration date of contracts. This is a heavy blow to those contingent workers who have served the large corporations as an essential workforce. Waves of massive dismissals are breaking in almost all industrial sectors, including automobile and electronics, affecting not only temporary and fixed-term contract workers but also full-time workers. Those who lead massive dismissals are global corporations that are the core members of Nippon Keidanren, and therefore have a great social responsibility for the present serious situation.

Massive dismissals of contingent workers are inhumane

Many of the contingent workers who are being forced out of work are “working poor” who cannot depend on parents for assistance and thus cannot find a place to live in after being driven out of company dormitories. In the year-end season, many workers throughout Japan are being fired on short notice. Thrown out of dormitories, they are forced to become homeless, living in parks and on the streets in the cold weather.

If companies go ahead with their massive dismissal plans, it is obvious that the situation will further worsen. Many of the fired workers are those who have worked the same hours and as hard as full-time workers. They have agreed to work overtime and on holidays. They have worked without taking lleaves of absence even when they had fevers or when their relatives died. It is unconscionable from a humanitarian point of view to throw them out into the streets in the dead of winter. Such an unconscionable act must not be condoned in our society.

Dismissals of contingent workers before expiration dates of contracts, refusal to renew contracts, and unilateral withdrawals of job offers are illegal

It is also grave that the ongoing massive dismissals of contingent workers are illegal or highly likely to be in violation of the law.

A government survey shows that more than 60 percent of dismissed temporary and fixed-term contract workers are those who were fired before their terms of contracts expired. There are companies that plan to dismiss contingent workers before the expiration date of contracts. However, the Labor Contract Law prohibits employers from firing contingent workers, including temporary and fixed-term contract workers, during the term of contracts except when it is “unavoidable” to do so (paragraph 1, Article 17). “Unavoidable cases” are recognized as being less frequent than cases that “lack reasonable grounds and are not considered to be appropriate in general social terms” (the government instruction was issued when the Labor Contract Law came into effect).

It is commonly accepted that companies must be legally accountable for dismissals. Under the current law, it is illegal for companies to dismiss workers for a general reason such as “poor performance of business.” It is also against the law to abuse their power by refusing to renew contracts or canceling job offers to school graduates, a serious problem at present.

Compliance with the law is the minimum duty of corporations in fulfilling their social responsibility. Members of Nippon Keidanren must comply with laws and regulations.

Massive discharge has no reasonable reason

The reason most of the major corporations give for their massive dismissals is that their earnings are expected to go down. However, the dividends they are paying to shareholders are not decreasing and they still have enormous amounts of internal reserves.

In the automobile industry, which took the lead in imposing massive job cuts, Toyota and 12 other major companies have announced plans to cut about 20,000 jobs altogether. Even after downward revisions of their earnings outlook, they will make two trillion yen in profits. In September, they paid shareholders a total of 380 billion yen in mid-term dividends. Their internal reserves have almost doubled from 15.3 trillion yen in September 2000 to 29.4 trillion yen in September 2008. This means that it is possible for these companies to stop cutting jobs and maintain jobs. It may be the case that corporations in the face of an economic slowdown need to make some adjustments in production, but it is unrealistic to assert that large corporations are forced to carry out dismissals.

We must prevent the Japanese economy from getting stuck in a vicious circle of job cuts and economic slowdowns

If nothing is done to stop the massive dismissals, there will be no stopping a further economic downturn. There is a widespread understanding across the political spectrum that the reconstruction of the Japanese economy is impossible without overcoming dependence on foreign demand and putting emphasis on the effort to boost domestic demand.

At a time when domestic demand-led growth is the only way to prevent further economic downturn, if large corporations continue to impose massive job cuts, what will be the consequence? Personal spending will fall, as will production and business investment, and the Japanese economy will get stuck in a vicious circle of job cuts and economic downturns. In these circumstances, job cuts may help companies’ short-term financial situation, but if personnel cuts take place simultaneously at many companies, it will imperil the future of the nation’s economy and social development. Even if large corporations think they have a bright outlook for their survival and development, such job cuts will be suicidal in the long-term.

JCP urges large corporations to behave in socially responsible manner

Nippon Keidanren’s founding Chairman Okuda Hiroshi once said, “If a company is thoughtless enough to easily dismiss workers on the grounds that the economy is slowing down, it will lose working people’s trust. And if it later faces labor shortage, it will be unable to keep competent personnel and consequently lose international competitiveness.

If a company is overstaffed at present, it should make efforts to use the redundancies in new business ventures. That is what employers should be about. If there are employers who are incapable of doing that, they do not deserve to be called employers. If an employer cut jobs, he should first kill himself by hara-kiri.”

Large corporations are called upon to act in a responsible manner just as Mr. Okuda pointed out.

The JCP calls on Nippon Keidanren members – Japan’s 1,315 major companies, 130 major national business organizations in the manufacturing and service industries, and 47 local business associations – to display awareness of their social responsibility and take the following steps:
1. Call on Nippon Keidanren members to forgo or withdraw their massive dismissal plans;
2. Call on member companies to comply with labor laws and eliminate illegal dismissals;
3. Press member companies to stop unfair withdrawal of employment offers; and
4. Ask member companies to make every effort to prevent workers from being thrown into the streets on the grounds that they are dismissed and thus automatically lose placess to live.