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Same work, different pay: Supreme Court to rule on 2 cases of employee wage gaps

Mitsunari Suzuki, left, and Osamu Yamaguchi lament their cut in pay despite doing the same work they did as regular employees for over 30 years, in Yokohama's Naka Ward, on April 30, 2018. (Mainichi)

TOKYO -- Japan's highest court is due to pass down a ruling on two cases surrounding the wage gap between regular and non-regular employees on June 1, in what will become the first ruling on the Labor Contract Act's prohibition of "unreasonable differences" between the two types of employment.

Three plaintiffs in one of the two cases before the Second Petty Bench of the Supreme Court are employees of Yokohama-based transport company Nagasawa-Unyu, who are suing their employer for post-retirement wage differences. They were re-hired as non-regular contract employees after reaching retirement age, and even though they were performing the same duties before turning 60 years old, their pay was significantly cut -- something they could not accept.

Mitsunari Suzuki, 64, and Osamu Yamaguchi, 63, were both veteran cement truck drivers for Nagasawa-Unyu with 37 and 31 years of experience under their belts, respectively. Ahead of the court's decision, they told the Mainichi Shimbun that lowering the pay of employees after retirement age is not something that should be socially acceptable, and rehired workers are forced to accept the conditions by the companies.

Article 20 of the revised Labor Contracts Act, which went into effect in 2013, states that if the labor conditions of an employee with a fixed-term contract are different from those of a counterpart employee without a fixed term (a regular employee) under the same employer, then "it is not to be found unreasonable, considering the content of the duties of the workers and the extent of responsibility accompanying the said duties, the extent of changes in the content of duties and work locations, and other circumstances."

Suzuki departs from the company in his truck as early as 5 a.m., driving his 14-ton vehicle mainly around Kanagawa Prefecture. He has driven the same cement truck for over 10 years, even before he reached the set retirement age, and stated strongly, "The work I am doing is absolutely identical to before retirement."

According to a ruling by a district court, Nagasawa-Unyu informed the labor union to which the men belonged in 2012 that the company's re-hiring policy was such that while their monthly special allowances of 70,000 yen to 80,000 yen, which were paid in accordance with the size of their vehicles, would be totally cut after they turned 60, and allowances would cease for housing and family, their commission pay would be raised such that their pay would remain around 75 percent of the amount before retirement.

Through negotiations between the company and the labor union, some changes were made to the conditions, but the contract remained largely the same, and in the case of Suzuki, his annual income dropped from some 5 million yen to approximately 3.7 million yen.

Suzuki and the others filed a lawsuit in 2012. The Tokyo District Court in May 2016 sided with the men, stating, "Creating a difference in pay for exactly the same work is unreasonable in the absence of special circumstances." However, the Tokyo High Court overturned the decision of the lower court in November of the same year, ruling, "Pay cuts after employees have reached retirement age are socially accepted," and struck down the men's request for compensation.

The Tokyo High Court concluded that a pay cut of around 20 percent of an employee's pre-retirement salary was "not unreasonable," but both men are insistent that due to the cut in their special allowances, their overtime pay was also dropped to two-thirds of the original figure. Suzuki and Yamaguchi said they would have liked the high court to consider not the total amount of money, but rather the differences in the wages and allowances carefully when handing down the decision.

The Supreme Court is expected to decide whether or not the wage gap is "unreasonable" by using the total amount of wages and allowances or by each type of compensation individually.

The other case set for a ruling by the Supreme Court is unlike the three retired but rehired men from Nagasawa-Unyu, and was filed by a single contract employee. The plaintiff is suing distribution company Hamakyorex Co. based in Hamamatsu, Shizuoka Prefecture, over a gap in six different allowances, such as a housing allowance, between regular employees and contract workers.

(Japanese original by Naotaka Ito, City News Department)

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