Human Resource ManagementKeiichiro HAMAGUCHI

Chapter 3Section 7

Regular Workers and Non-regular Workers

(1) Overview

• Japanese workforce is divided into 2 groups: regular workers and non-regular workers.

• Regular workers enjoy stable employment from entry to mandatory retirement and seniority-based wages.

• Non-regular workers are less protected and paid.

• The number of non-regular workers in Japan is steadily increasing.

　 all men women

　 regularnon-regular

regularnon-regular

regular non-regular

1985 83.6 16.4 92.6 7.4 67.9 32.1

1990 79.8 20.2 91.2 8.8 61.9 38.1

1995 79.1 20.9 91.1 8.9 60.9 39.1

2000 74.0 26.0 88.3 11.7 53.6 46.4

2006 67.0 33.0 82.1 17.9 47.2 52.8

(2) Restrictions on Dismissals and Fixed-term Contract

• Dismissals of regular workers are strictly limited (doctrine on abusive dismissals).

• Fixed-term contracts are terminated when reduction of workforce is required (function as a shock absorber).

• Despite some Supreme Court decisions on refusal to renew repeatedly renewed fixed-term contract, they are less protected than regular workers (four requirements on collective redundancy).

(3) Part-time Workers

• Part-time workers are defined as workers with shorter working hours than ordinary workers.

• But there are “quasi-part-timers” who work full time (part-timer as a status).

• Part-timers are paid on hourly basis and get few bonuses or retirement allowances.

(a) Wage Difference between Regular Workers and Part-timers

• LSL prohibits discrimination against women on wage (Art.4).

• But there is no general principle of equal pay for equal work (or work of equal value).

• Even if part-timers and regular workers perform the same work, the wage disparity is justified by the difference in their obligations (to overtime orders or transfer orders).

• Regular workers’ wage is determined by internal labor market, part-timers’ wage is determined by external labor market.

(b) Wage difference between Regular Workers and Quasi-part-timers

• When female non-regular workers and female regular workers perform equal work, wage difference exceeding 20% cannot be justified (Maruko Crossing Signal Company case).

• 2007 revised Part-time Work Law introduced equal treatment of particular part-time workers (in the same employment management and contractual status as regular workers). This means equal treatment between regular part-time workers and regular full-time workers. It may apply to only 4-5% of all part-time workers.

(4) Dispatched Workers

• The number of dispatched workers has been steadily increasing.

• There are 2 types of worker dispatching business: regular employment type and registration type.

• Dispatched workers have triangular relationship with workers dispatching agency (employment contract) and client company (direction).

　 permanent registered total

1990 128,197 382,070 510,267

1995 142,717 469,339 612,056

2000 272,843 1,113,521 1,386,364

2001 298,561 1,449,352 1,747,913

2002 338,594 1,791,060 2,129,654

2003 375,406 1,986,974 2,362,380

2004 421,200 1,844,844 2,266,044

2005 455,782 1,933,982 2,389,764

(5) Contract Work Arrangement

• In contract work arrangement, workers work in the client company, not under the direction of the client company but of the contracting company.

• In manufacturing sector, many abuses of contract work arrangement exist (in which client company directs the workers of contracting company).