Japan Press Weekly

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2015 March 25 - 31 [LABOR]

PM’s advisory panel proposes monetary settlement system for dismissals

The Regulatory Reform Council, an advisory organ to Prime Minister Abe Shinzo, on March 25 submitted to the government a report recommending the introduction of a system to allow monetary settlement to be applied to disputes over unfair dismissal.

Article 16 of the Labor Contract Law bans employers from firing employees without any rational reason. In line with the Abe administration’s labor policy to promote job mobility, this report is intended to undermine the current regulations pertaining to dismissals.

Many workers across the country are suffering from unfair dismissals through various means such as “lockout” tactics used by IBM Japan and the use of a “quarantine room” at Sony Corporation.

If a company is allowed to sack its workers by just providing them with some “compensation” in spite of a court ruling nullifying their dismissals, it will further increase wrongful terminations.

According to local labor bureaus, the average amount of compensation paid to a worker in exchange for accepting dismissal is only a couple of months’ pay.

Financial circles claim that Japan’s labor legislation is “too inflexible”. A recent survey released by the OECD, however, shows that Japan ranks 24th among its 34 member nations in terms of “employment protection”.

The need now is to protect workers’ fundamental human rights by strengthening legal controls over dismissals.

Past related article:
> Shii: Amount of overtime per worker in Japan 8 times more than in Netherlands [February 21, 2015]