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Path to 'equal pay for equal work' in Japan remains unclear despite draft guidelines

The government has released draft guidelines for a system of "equal pay for equal work," encouraging companies to pay non-regular workers bonuses and other benefits that regular employees receive. The move is a step toward improving conditions for non-regular workers, but as the draft guidelines span only around a dozen pages, the cases in which companies can apply them to make clear decisions will be limited. Furthermore, companies are left with broad discretion. As such, equal pay for equal work remains a distant prospect.

At a meeting of the Council for the Realization of Work Style Reform on Dec. 21, Prime Minister Shinzo Abe proudly stated, "We've wanted to introduce a system of equal pay for equal work, and this (draft) calls to attention common labor practice in Japan, not permitting the unreasonable gap in the treatment of regular and non-regular workers."

Abe has put effort into promoting equal pay for equal work as he hopes to encourage companies to use their internal reserves to increase the wages of non-regular workers and spur consumption as a result.

However, it is unclear whether the situation will progress as Abe hopes. A member of the work reform council, Sadayuki Sakakibara, chairman of the Japan Business Federation (Keidanren), told reporters after the council meeting, "The content (of the draft) is appropriate," but stressed, "Allocations can go toward improving the wages of non-regular employees after productivity is increased." Regarding the possibility of increasing compensation packages for non-regular employees without lowering the wages of regular employees, Sakakibara said, "We cannot say that in general terms."

Companies have displayed various responses to the draft guidelines. A representative of one major beef bowl (gyudon) restaurant chain that has over 100,000 part-time employees, commented, "If we were to pay bonuses to part-timers, the burden on the company would be too great." A supermarket with about 36,000 part-time workers, meanwhile, commented, "Judging how part-timers contribute to business performance is difficult and unrealistic."

At the same time, a representative of another major supermarket chain commented that the chain had already independently taken such measures as increasing the base pay of non-regular workers and correcting disparity in welfare packages. Another official at a major distributor said of the new guidelines, "There were many items which we have already implemented and it wasn't as big a deal as we had feared."

However, there are some businesses like convenience stores consisting only of an owner and part-time workers, with no regular workers with whom comparisons can be drawn, and these businesses are not covered by the guidelines. A source close to the government commented, "Not all non-regular workers are covered by the draft guidelines." An official at one convenience store commented, "There are no references (to our kind of situation), and we don't know how to respond.

From an employee's perspective the draft guidelines contain many vague points. The statement that non-regular workers should be paid bonuses commensurate with their contribution to business performance is significant, but some companies take in factors other than contributions to business performance, while others decide to pay a set amount. It therefore remains unclear whether bonuses will be paid to all non-regular employees.

The draft guidelines also request that temporary workers be treated the same as regular employees at the companies to which they are dispatched. But as a condition, the guidelines request that they be subject to transfers as well, rather than being judged solely on the content of their work. One labor union official was wary of improvements in the treatment of temporary workers being left by the wayside, commenting, "Cases in which temporary workers get the same treatment as employees at the places where they are dispatched, right down to transfers, are limited."

Workers had strongly requested stipulations on severance pay, but these were not included. Some government officials had argued that non-regular workers should receive severance pay, but a Cabinet Office official commented, "Severance pay carries various meanings, such as the delayed payment of wages and contributions to the company over a long period, and it was difficult to define its position." There are also concerns in the business world about the large costs involved, and the possibility that the draft guidelines will go a step further in the future are extremely slim.

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