Labour market regulations, flexibility & digitalisation

Committee:
Human Resources
status:
Some progress
Published:
The future prosperity of Japan in an increasingly globalised world hinges on ensuring a highly skilled, diverse and competitive workforce that can support its ageing population and drive its economy. Key to this are ongoing policies that allow more flexible approaches to working, greater female participation in the workforce, new ways of sourcing foreign labour and use of automated processes and artificial intelligence where meaningful and appropriate. The EBC strongly urges the Japanese Government to place focus on achieving greater productivity in the workplace and flexibility for both employees and employers.

Recommendations

  • Encourage companies to create ongoing lasting policies to allow greater numbers of employees to continue to take advantage of flexible ways of working, including remote working from home, by providing government guidelines to support this. Overcoming workplace cultures that place value on physical presence over outcomes gains is a key focus area.
  • Introduce employment legislation and support that encourages the creation of a competitive workforce based on merit and performance. Adequate protection of employees is required, but employers also need a legal framework within which to remove under-performing workers, and whose skills may not be transferable. The same shall apply for corporate re-structuring with clear rules on how to compensate affected workers.
  • Introduce legislation to speed up court procedures in labour disputes. Long court procedures lead to legal uncertainty and slows down corporate investments. The efforts of the Japanese government to digitalize court procedures to accelerate decisions are much welcomed by the EBC.
  • Continue to actively promote the uptake of technology that contributes to boosting productivity in the workplace, including incorporating digitalisation and artificial intelligence into daily operations, while considering the interests and well-being of the human workforce.
  • Increase and improve the infrastructure necessary to support greater work-life balance, by ensuring sufficient child-care facilities to support female participation in the workforce and male participation in the home. Further promotion of office part-time jobs for working parents.
  • Consider implementing a policy that grants remote work privileges to employees who meet predefined criteria, such as child-care obligations.
  • Encourage companies to set up child-care facilities by offering them identical or similar financial contributions to those given to public day-care centres.
  • Remove the spouse special income tax credit (haigusha-tokubetsu-kojo). The EBC believes that even with an increase of the threshold this will not solve the issue. The situation is similar for the threshold for health insurance and pension.
  • Encouraging universities to enable their students to engage in internships during their university years can significantly enhance the connection between business and academia. This collaboration provides students with practical experience and insights into the skills that are in demand in the job market. The EBC Human Resources Committee supports the idea of promoting internship and vocational programs for university students, reflecting the changing needs of businesses. By sharing experiences from European best practices, such as the German dual education Vocational Education Training (VET) programs, the EBC is willing to support government initiatives in this area.Amend the employment legislation to expand the “highly skilled system” to include employees who earn less than the current system regulating highly skilled professionals, while keeping adequate protections of employees. People with high skills and high motivation want to work based on output instead of work hours.
  • Promote job-sharing for blue-collar as well as white-collar office positions to provide more opportunities for parents to balance work life with home responsibilities.
  • The transition from membership-based and seniority-based employment to merit-based specialist hiring, including support for mid-career hiring, is crucial for fostering a competitive workforce. The EBC Human Resources Committee is encouraged by the trend among major Japanese companies to move towards performance and merit-based pay schemes and personnel evaluation systems. This shift aims to boost motivation and productivity, leading to greater mobility of workers and better matching of transferable skill sets and experiences in the external labor market. Supporting job-based promotions and careers rather than the traditional route based solely on age and length of service is highly welcomed.