Japan Press Weekly

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2015 July 1 - 7 [LABOR]

Abe’s deregulation of use of temps will lead to expansion of informal economy

A bill to revise the law on the use of temporary workers with which the Abe administration is pushing forward will open the way for a resurgence of pre-war Japan’s employment system allowing wage theft.

The bill was sent to the House of Councilors late last month after being railroaded through the House of Representatives with the majority vote of the ruling Liberal Democratic and Komei parties. The Abe government is seeking to begin discussing the bill in the Upper House as early as possible this month.

Temporary staffing is an indirect employment system under which workers dispatched from staffing service companies work at recipient companies. In Japan during the pre-war period, a similar employment system permitting private job-placement agencies to send workers to client companies was in place. At that time, workers were often exposed to inhumane, abusive labor practices, such as the unchecked skimming of wages by those private agencies. After WWII, private job-placement services were prohibited under the Labor Standards Act and the Employment Security Act.

In 1985, however, the Worker Dispatch Law was established with a strong push from the business circle, resulting in bringing back the use of leased workers and the siphoning of their wages by employment agencies.

The law has encouraged companies seeking to cut labor costs to shift to the use of temporary workers. The Labor Ministry’s data shows that temporary workers now earn an average of 1,351 yen per hour, 30% less than regular workers. At present, companies which accept agency workers do not have to bear a responsibility for those workers in regard to social insurance and other social protections. Employers do not even have to respond to workers’ requests for negotiations concerning working conditions. In addition, companies can dismiss temporary workers at any time if the company thinks that dismissal would be advantageous to the company’s business performance. Meanwhile, temporary staffing agencies earn healthy profits by skimming off 30%-50% of temporary workers’ wages.

PM Abe’s bill to revise the Worker Dispatch Law will not only abolish the existing restrictions by which the use of staffing service is only for temporary, transient jobs for a maximum of three years, but will also move Japanese workers into the informal economy where workers will be unable to find decent, full-time jobs, receive adequate social protection, and maintain their workers’ rights.

Past related article:
> Bill leading to a society without full-time jobs rammed through Lower House [June 20, 2015]