Japan Press Weekly

Tweet

2015 July 8 - 14 [LABOR]

Abe’s new economic growth strategy seeks to relax dismissal regulations

Prime Minister Abe Shinzo is intending to introduce a system to allow employers to arbitrarily dismiss their employees in exchange for paying severance in line with demands from the Japanese and the U.S. financial circles.

The Abe Cabinet on June 30 approved a new economic growth strategy which calls for further relaxation on the existing employment law, citing the need to boost companies’ profitability. PM Abe proclaims that he will crush what he calls “bedrock” labor regulations.

The previous strategy proposed easing working hour regulations, including the introduction of a zero-overtime payment system. In addition to this, the newly-approved strategy includes an introduction of a system which will enable employers to discharge employees by providing a severance payment even if the discharge is acknowledged to be unfair by a court.

This proposed labor system has been a long-held dream of the business community in Japan. In March, the government’s Regulatory Reform Council, chaired by a business leader, issued a statement calling for the introduction of the system.

U.S. multinationals have also argued that the Japanese government should launch this kind of system. The American Chamber of Commerce in Japan in April 2014 put forward a proposal regarding employment contracts in which companies will be able to dismiss workers at any time for any reasons if the company pays the worker a pre-agreed amount of compensation for the dismissal.

Past related article:
> PM’s advisory panel proposes monetary settlement system for dismissals [ March 27, 2015]