Hitachi to abolish annual wage increase system

Hitachi Ltd., a major Japanese electronics maker with a workforce of 42,000, will abolish the annual wage increase system and introduce a discretionary work schedules that will legalize unpaid overtime work from January 2004.

Akahata reported that Hitachi workers are infuriated by the plan, which was first presented to the Hitachi Ltd. Workers' Union in June.

Later, at its annual convention, the union's headquarters received opinions on the company's proposal concerning 140 items. A number of workplace assemblies voted down the plan. All this is extraordinary for the Hitachi Ltd. Workers' Union. Faced with such strong criticism from shop-floor workers, the company was forced to delay concluding the final labor-management agreements.

Under the new system that emphasizes worker "motivation" and "creative work", demotion and wage cuts will become routine.

Workers on career-track jobs will be asked to set higher goals and if they fail to achieve them, they will not receive wage raises and even risk wage cuts. If they are demoted, they will suffer a loss of about one million yen (9,174 dollars) in annual income. Young employees will be pegged at low starting wages because the annual wage increase system will be abolished.

The so-called "discretionary" work system, intended to justify overtime work without pay under the guise of workers' initiative, involves questionable points legally.

The Hitachi Ltd. Workers Union has expressed support for the company proposal in the firm belief that this is the way to revitalize Hitachi.

An engineer in his 20s said that his trust in Hitachi have been betrayed one by one. It is said that the extreme merit system has been causing emotional distress among many young workers.

A career-track worker in his 50s at Hitachi's central laboratory said, "The 5-percent wage cuts the union was forced to accept for two years in a row have resulted in a loss of 400,000 to 700,000 yen in annual income, including cuts in bonuses. The company is now changing the system for the worse. We won't give in any more. The union must return to the basics and struggle for the workers' interests." (end)