1. EMPLOYEE RELATIONS
IN JAPAN
By Rasika R Salodkar
M14087 (HR)

2. JAPAN
 World’s third largest economy and
 Remains cutting-edge in business
 Unique player in the Asia-Pacific
 Doing business in Japan is safe, relatively deregulated, consistent,
profitable and enjoyable
 Constitutional monarchy governed by the Japanese Constitution, a
“supreme law” which declares that sovereign power resides with the
people
 Population of 127.5 million people, an area of 377,799 square
kilometres and a GDP of US $5.960 trillion
 Power is separated into Legislative, Administrative and Judicial
Power, exercised by the Diet, Cabinet and Courts, respectively
 Main employment legislation is the Labour Standards Law (roudou
kijun hou) and the Labour Contract Law (roudou Keiyaku hou)

3. LABOUR LAW
 Established within this constitutional framework
 Elaborated by acts, ordinances, collective agreements and
work rules
 Three major labour laws:
1. the Labour Standards Law (LSL)- Regulates working
conditions and the workplace safety and hygiene
2. the Trade Union Law (TUL)- Guarantees the worker's
right to organize and to bargain collectively
3. the Labour Relations Adjustment Law (LRAL)- Deals with
management adjustments and means of dispute
settlement
• Acts apply to Japanese employees of the private sector,
including foreign workers possessing a visa with a work
permit

4. TRADE UNIONS
 The freedom of workers' associations is granted in Art. 28 of
the Constitution
 Trade unions are ruled in the Trade Union Law (TUL)
 Definition: The organisations, which are formed autonomously
and composed mainly of workers for the main purposes of
maintaining and improving working conditions and raising the
economic status of workers
 Legally covered are all workers, except for those either with a
supervisory position or working for welfare or political and
social movements
 Registered by the Labour Relations Commission and have a
legal personality as well as legal protection
 Any discrimination because of trade union activities is
forbidden, and the employer must not have any influence
on the trade union's management

5. CURRENT SCENARIO OF TRADE UNIONS
 In 1999, 1,1700,000 workers of the private
sector were unionized
 Unionization rate has been declining during
the last 50 years
 Over 90% of the unions are formed within the
limits of one company
 Enterprise unions engage in activities and
issues related to their members within the
enterprise
 Industry federations are generally
constituents of the nation-wide Japanese
Trade Union Confederation (Rengo)
 Rengo was founded in 1989, absorbed rival
national organisations and embraces now
unions of the private as well as from the
public sector

6. STRIKE TYPOLOGY AND DISPUTES
 All workers except police, firemen and prison guards
 Article 28 of the Constitution guarantees the workers' right to act
collectively
 Labour Disputes: a disagreement over claims regarding labour
relations arising between the parties concerned with labour
relations resulting in either the occurrence of acts of dispute or
the danger of such occurrence
 For labour disputes, the trade union and its members are liable
neither under civil law nor under penal law, as long as they act
properly and are a part of a legally registered trade union
 Legally recognized acts of disputes: strikes, slowdowns and other
acts hampering the normal course of work, like the order to all
workers to take holiday on the same day or the posting of posters
on the establishments premises, shutting down the flow of traffic
through the gates, etc
 workers are paid no wages while striking

7. LOCK OUTS:
 Employer's right to lock out employees is not constitutionally and
legally established (unlike India)
 Recognized as a right of defence by a majority
 Employer needs to gain first an injunction from the court
LABOUR DISPUTES:
 Can be settled upon request of one or both parties by conciliation,
mediation or arbitration
 Each form of settlement is strongly influenced by the Labour
Relations Commission, a body representing equally workers,
employers and the public

8. COLLECTIVE BARGAINING (SHUNTO)
 Right of workers and unions to bargain collectively is guaranteed,
irrespective of size and unionisation rate, under Article 28 of the
Constitution of Japan and Article 7 of the Trade Union Law
 Collective bargaining predominantly takes the form of enterprise-
based bargaining
 Unique feature of Enterprise-based bargaining: employer and
enterprise-based union have almost complete autonomy over the
process
 Article 17 of the Trade Union Law regulates the general binding
power of a collective agreement
 It states: when three-fourths or more of the workers of the same
kind regularly employed in a particular factory or workplace come
under application of a particular collective agreement, the
agreement concerned shall be regarded as also applying to the
remaining workers of the same kind employed in the factory
concerned or workplace

9. GRIEVANCE PROCEDURE
 Grievance procedure, in industrial
relations, process through which
disagreements between individual
workers and management may be
settled
 Designed to deal with problems
concerning the interpretation and
application of a collective agreement
between a company and the union,
and other day-to-day employee
grievances
 Grievance procedures are rarely used
to settle labour disputes as the rules
of grievance procedures set forth in
collective agreements are simple

10. DISPUTE SETTLEMENT
A) CONCILIATION (Chotei)
 The most feeble form of settlement
 One or more conciliators are nominated by the Labour
Relations Commission
 A conciliator is a person with experience in the settlement
of labour disputes (Art. 11 of the LRAL)
 He / She acts as an intermediaries between the parties
(Art. 13 of the LRAL)
 In the event of not being able to effect a settlement, the
conciliator must withdraw
 If withdrawn, a conciliator must report the confidential facts
of the case to the Labour Relations Commission (Art. 14 of
the LRAL)
 Simple and inexpensive, they are widely used

11. B) MEDIATION
 carried out by a mediation committee representing workers,
employers and the public in equal number
 The committee, which is nominated by the Labour
Relations Commission's chairperson, has the power to draft
a proposal of the settlement (Art. 26 of the LRAL)
 directed at the expeditious resolution of disputes arising
between telecommunications carriers through mutual
concessions by both parties and with the intervention of the
Mediator
 Mediator is appointed by the Telecommunications Business
Dispute Settlement Commission (TBDSC)
 Mediator's function is to cooperate in seeking out points of
agreement between the parties in dispute and, once such
points are identified, working towards resolving the matter
in line with mutually agreeable conditions
 It can also put pressure on the acceptance of the proposal
with the help of the press

12. C) ARBITRATION
 the strongest and actually most rarely chosen form of labour
dispute settlement but not so common in Japan
 An arbitration committee from among the members of the Labour
Relations Commission is nominated by the commission's
chairperson
 The arbitration committee meets and listens to other members of
the Labour Relations Commission representing employers and
workers (Art. 31-5 of the LRAL)
 It takes a decision in writing - known as an arbitration award -
which has the same effect as a collective agreement (Art. 34 of
the LRAL)
 Japan has signed and ratified both the 1927 Geneva Convention
as well as the 1958 New York Convention, making arbitral awards
rendered in countries that are signatories to those conventions
enforceable in Japanese courts

13. ER PROCEDURES
A) SUSPENSION:
 a period, during which the labour contract continues to be
in force, but the worker has no duty to work and the
employer is partly or even completely released from paying
wages
 A worker may be suspended firstly as a form of
punishment and secondly while a punishment is decided
upon, provided that the worker is prosecuted for a severe
crime and the court has not yet decided
 Suspension also often occurs, if the employee is on sick
leave, becomes a full-time union official or attends full-time
training
 if the suspension is for reasons attributed to the employer
(e.g. temporary lay off), the employer must pay an
allowance equal to at least 60% of the worker's average
wage (Art. 26 of the LSL)

14. B) TERMINATION OF EMPLOYMENT
 Termination of a labour contract at the worker's and the
employer's initiative is governed by Art. 627 of the Civil Code
 Notice must be given at least 30 days in advance before the
dismissal takes effect (Art. 20 of the LSL )
 A dismissal for business reasons is allowed, if it satisfies all of the
four requirements set by court:
1. A personnel reduction is based on business necessity
2. Every possible measure to avoid layoffs is tried
3. The selection of employees to be dismissed is made on an objective
and reasonable basis
4. The employer consults faithfully with unions or employees
 On the employee's request, the employer shall deliver a
certificate stating reasons for dismissal without delay (Art. 22 of
the LSL)

15. EMPLOYEES PARTICIPATION IN MANAGEMENT
• Practiced most visibly and formally through the scheme of
joint consultation
• System where representatives of both employees (usually
union representatives) and management participate
• Main objective is to share information between workers and
management on a relatively broad range of issues relating to
corporate management and working conditions
• System is spontaneous, and neither required or prescribed by
the law
• Three basic forms of joint consultation system:
1. Corporate level worker participation
2. Plant level worker participation
3. Workshop level worker participation