Work Style Reform in Japan

On July 12, 2019, I gave a presentation about Work Style Reform in Japan at a seminar organized by the Japan America Society of Washington DC in the beautiful meeting room of the Groom Law Group. The talking points in my presentation were the background of the reform (political background and male dominated office), the major points of amendment to laws, the problems and keys to improving productivity, the young generation’s view of employment activity and work-life balance, protection for non-regular employees, and some implications to businesses in Japan. The questions and opinions raised by the participants were as follows:

  • According to statistics, in Japan there are a decreasing number of young people with entrepreneur-orientation and an increasing number of young people agreeing to lifetime employment.  But in the US there are many young people who prefer entrepreneurship, and seem not to think that they will stay in the same company for more than three years. It is interesting that the trend is reversed in Japan and the United States.
  • There is an incubator that makes new attempts in Japan. It is a form that people bring their own ideas into business while they still keep employee status in a large company, and large companies are supporting it. There is no such a problem as long working hours, which is there if people are working for a large company as their employees. You are your own boss. Your capital is only your body and brain. It is up to you to decide how you should work in order to nurture them and take full advantage of them.
  • It is interesting that illegal overtime work is subject to criminal penalties in Japan. However, the quality of labor could not be measured by the quantity, and I wonder if it would contribute to the improvement of productivity. I also felt doubt about the effectiveness of the scheme in which only companies would be subject to criminal penalties. It would be more effective to change the practice in which the superiors are not prosecuted, and the employees who did illegal overtime work can not be punished.
  • I do not think that overtime work regulation is improving productivity, but even feel that it is getting worse.  Somebody, who is willing to work for growth, cannot work.
  • Foreigners such as me are in trouble to understand the huge gap between leading companies, such as Softbank and Fast Retailing, creating new business models and doing business around the world, and the laws that strengthen restrictions on overtime and conservative trends that appear in statistics. Isn’t there a movement of change that boil from the bottom, not changing from the top by law?
  • If the government promotes reforms in working styles, it is necessary for the government to first provide an example and to realize productivity improvement.
  • I can understand the feelings of people who hate change. However, I felt that it is necessary to delve into the true reasons what causes it.
  • I wonder if the research of sociologists and psychologists is in progress.
  • Even if it is necessary to invest in a company’s human resources, what should the investment be diverted to?
  • You should know that in Japan most of the companies face only one labor union and seal the union shop agreements. These make it difficult to solve problems. As there is only one union in a company, the same union represents both scientific engineers in the R&D center and humanities people in the administration sector. Thus, when negotiating with a company, union is forced to take position of average, and result could be something that nobody will benefit.
  • Since I have been with Japanese companies for 25 years, I know that the situation regarding the women empowerment is getting better, but the movement is too small.

Sachiko Ichikawa: Attorney at law in Japan and NY, USCPA. Live in Washington DC. Knowledgeable in employment law and corporate governance.

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