Prime Minister Shinzo Abe has ordered relevant Cabinet ministers to review the practice of long working hours, and to begin to study a system that enables a variety of working styles, at a joint meeting between the Council on Economic and Fiscal Policy and the Council for Industrial Competitiveness on Tuesday.
In the face of a shrinking working-age population brought about by a low birthrate, the government hopes to activate the labor market and promote economic growth.
‘A results-based system’
“To grow sustainably, we need flexible styles of working so that all citizens can display their abilities to the maximum extent,” Abe said at the meeting, where he called for a review of the labor system to enable working styles that are adapted to people’s circumstances, such as raising children or caring for infirm family members.
Private-sector members of the councils called for a new labor management system that meets the prerequisites of the Labor Standards Law based on results, not working hours.
Specifically, certain highly skilled employees who want to work independently would be given individual discretion over their working hours and how to carry out their jobs.
Companies could award compensation based on achievements in predetermined job duties.
The system is envisioned to apply to workers earning at least ¥10 million per year and who want to participate. Companies would strive to understand working conditions in detail and be aware of workers’ health to prevent unreasonable workloads.
A system similar to this already exists. Known as the “Japanese version of the white-collar exemption,” it allows employees making over a certain income level to freely determine their working hours in exchange for eliminating overtime pay.
The first Abe administration wanted to introduce this system, but backed off after it was criticized as being tied to wage restraints.
“I would like you to investigate a framework for a new working-hours system that befits work styles evaluated based on results, not time,” Abe said at the meeting.
In addition, the Health, Labor and Welfare Ministry proposed utilizing flextime, which allows workers to choose when they begin and end work, as well as telecommuting, in which employees work from home without coming into the office.
Since such systems could not be applied in all cases, the government also intends to examine further working styles that are not bound by limitations on working hours.
Other proposals made at the meeting included promoting men’s work-life balance, making it compulsory to take paid leave and expanding job training for irregular employees.
The government’s interest in reforming the labor market has been spurred by the relentless decline in the working-age population due to the low birthrate.
Lifetime employment, where workers stay at the same company until retirement, is the mainstream in Japan.
In this system, salaries increase as workers accumulate years of service. In many cases, workers must work long hours or be reassigned to other workplaces at the convenience of the company.
Entrenchment of uniform working styles makes it difficult for women to work, as their actual availability for work duties is sometimes limited by child-rearing or nursing-care responsibilities.
Without a variety of working styles to choose from, environments that are friendly to women, young people, the elderly and other workers cannot be created, which makes it difficult to achieve sustained economic growth.
The government intends to make activating the labor force a pillar of its new growth strategy, expected to be compiled in June.
“We need a system that makes it easy to manage working time and time for living, but it’s important to establish conditions so people aren’t compelled to work long hours,” Hisashi Yamada of the Japan Research Institute said.