Statement of GS

RENGO's View: JBF Report of Committee on Management and Labor Policy for 2005

14 December 2004
Japanese Trade Union Confederation
RENGO issued, December 14, its View on the Report of Committee on Management and Labor Policy of the Japan Business Federation (JBF) issued the same day. The said Report issued by the Committee serves as theoretical basis for the Spring Struggle 2005 for each employer.

  1. The Japan Business Federation (JBF) publicised today its Report of Committee on Management and Labor Policy for 2005. The biggest question is that the Report only looks for short-term profits of companies without an awareness of macro issues. It cites ear-friendly phrases such as “corporate social responsibility”, “improving workplace power” and “expanding choices of working”, but rooted in an unchanged way of thinking or micro logic of companies to maximise their profits by controlling wages and give a priority only to well-being of their own companies.

    For some years ahead, Japan has been bipolarised with further distorted social distribution. This is mainly a result of corporate behaviour which does not care about how to be seen by others in an adverse wind of economic downturn. However, it would not be possible to “build a new basis of the country” if still remaining unchanged. Employers must thoroughly reconsider what the society, as well as corporate ethics and behaviour, should be.

  2. As regards the social security reform, the Report in the first place emphasises that a potential people’s share should be 50 percent or less, although the relevancy between growth and people’s share has not been scientifically proved. It is not unaccountable or persuasive. The Report proposes cuts in a public portion of social security and further reduction of pension benefits, which only worsen the sense of insecurity about living and future among the public. What we need now is to win back public confidence in the social security system in order to “build a secure, reliable society”. To this end, the Report should have indicated a concrete idea about the overall social security reform not merely focusing on a share, but also adequate benefit levels.

    The Report also stresses that there is an insufficient sense of urgency about a reality that depopulation due to the dropping birth rate is a crisis to the country as whole and calls the private sector, as well as central and local governments, to make possible efforts to respond to the crisis. RENGO could join such recognition. However, a question at the moment is how such efforts could be implemented by individual companies. The JBF should have at least ensured that all its member companies would draw up and adequately implement the Next Generation Development Assistance Plans that will be enforced in April next year.

  3. The Report insists: “there is no more reason for base-up (across-the-board wage increases) to exist” and “corporate performance should be reflected in a lump-sum payment”. However, revision of wages should be done taking into account living, economic and management situations and it does not make any sense to discuss it within the framework of whether or not base-up is necessary. We will remain unchanged in the position to demand base-up to ensure stable improvement of living standards and fair distribution of the fruits of growth. It is a priority to improve monthly wages that are a basis of the wage system. We do not accept an opinion that the fruits of growth are distributed only in lump-sum payments.

    The Report also argues that there is no room for higher wages at the national economic level, which however is inconsistent with the productivity-based principle which employers have been adhering strictly to. Macro economic data show that “it would be possible to increase real wages without increasing prices”. The Report is considered to intend the standardisation of wage control.

    The Report refers to the abolition of industrial minimum wages. They have been serving as a mechanism to put a brake on the expanding wage gaps and ensure fair competition within an industry. Therefore, they are different from local minimum wages in nature and functions and should be further improved and strengthened.

  4. Its words and real intention differ concerning the diversification of employment. The Report emphasises that “companies must establish a framework within which individual workers are able to choose their own ways of working and treated according to their labour”, however for the purpose of “strengthening companies’ competitiveness in search of portfolios of making full use of workers”. While giving the highest priority to a reduction in costs, it does not have any reference to equal treatment but gives insufficient attention to the gap between different employment forms.

    A major responsibility for the rapid increase of workers in atypical employment lies with employers looking for cheap, handy labour. They have removed certain workers out of “human resource development, safety nets and labour-management negotiations” in search for an immediate decrease in labour costs. We would call the JBF to be socially responsible for indicating what it would think the society should be, but not to propose to simply revise that the names regular and non-regular employees go by, which is only an escape from the true nature of the problem.

  5. As regards youth employment, the most serious problem is corporate responsibility for having put off recruiting youths for last ten years, as well as measures to be taken for new graduates and students.

    The Report indicates three basic principles of receiving foreign workers. However, skill development and training for foreign workers is apt to be transformed into unskilled work. Working environments for youth, the aged and women have not been adequately improved nor be consistent with the foreign workers’ policy.

  6. The Report takes the offensive on unpaid overtime work saying: “the administration is strengthening its guidance and supervision over what has not been causing any problem in individual companies”, which “is quite unrealistic incurring the distrust of companies and could be even an obstacle to autonomy of workers, diversified choices of working style, productivity improvement and finally the strengthening of Japanese companies’ competitiveness in the international market”. It is a big mistake if failing to face up to violations of the law at workplace, but recognising unpaid overtime work as a small matter or one of diversified ways of working.

    In the JBF-RENGO high-level meeting held today, RENGO proposed a joint campaign to wipe out unpaid overtime work. The Report holds up a principle of corporate citizenship that companies must be necessarily relied on by the society. Companies must start with observing laws and ordinances.

  7. We understand principles enshrined in the Report that “respecting people should be reaffirmed as a basis of management of Japanese companies” and that “workplace power cannot be achieved in a day and improving employment and working conditions in a long term is an only way to improve skills and working ethics”. However, these principles have failed to be realised for last some years.

    Employers must come back to the management style of respecting people. The first step to this end is to listen to workers’ voices and have an awareness of the problems in common. In this sense negotiations of the Spring Struggle would be an opportunity which should not be missed. Employers have unambiguous responsibility to react to earnest demands of trade unions in good faith.