Japan Press Weekly

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2016 May 11 - 17 [LABOR]

Labor Ministry’s panel begins discussing revision of subsidy program to assist in corporate downsizing

The Labor Ministry’s Labor Policy Council on May 13 began discussing the revision of the ministry’s labor mobility support subsidy program which has been criticized to assist in corporate downsizing. Diet deliberations by the Japanese Communist and Democratic parties contributed to moving the government to review this controversial program.

Under the current program, a company will receive a grant of 100,000 yen per employee when it makes a contract with a human resources firm to outplace target employees. An additional subsidy payment of up to 500,000 yen will be made when the contract is successfully performed within six months.

After the Abe government in 2014 allowed large corporations to apply for the subsidy program, misuse of the program has become a social problem. JCP and DP lawmakers in the Diet repeatedly grilled the government about this issue by citing the fact that human resource agencies marketed themselves to large corporations and that large companies used these agencies as tools to force target workers to quit their jobs.

The Labor Ministry in April decided not to pay subsidies to companies if they are found to use the program as part of their forcible retirement policies.

Regarding the revision of the subsidy program, the ministry’s council will discuss various subjects, including the exclusion of big businesses from the payment of 100,000 yen for the use of outplacement companies. The panel will compile its report by the end of the month.

Past related articles:
> JCP intervention puts a stop to drug maker’s downsizing plan [April 3, 2016]
> Large corporations’ restructuring scheme using state subsidies is unacceptable: JCP Koike [March 25, 2016]
> Labor minister to JCP Takahashi: subsidy program to help corporate downsizing should be revised [March 17, 2016]
> Job ‘reform’ helps corporate giants kick workers out [April 10, 2013]