TRADE UNIONS IN JAPAN

Current development and future

challenges
 Major Trade Union types

Industrial unionism is a labour union organizing method through

which all workers in the same industry are organized into the
same union—regardless of skill or trade—thus giving workers in
one industry, or in all industries, more leverage in bargaining
and in strike situations.

An oil workers' industrial union, for example, would include

those involved in exploration, extraction, storage, refining,
transport, and other areas associated with oil or
petroleum industry. 
 Major Trade Union types

“Enterprise Union”-
• It is a union exclusively representing all the employees from a
single enterprise or company.
• An enterprise union has all the features of the corporate
community and exist as a separate institution that competes
with the company organization.
• With this union, the democratization of employees are
assured to protect employee interest by exercising influence
on management.
 Major Trade Union types

• USA, Germany follow Industrial Union

– German has only 8 industrial union
(1. Construction, Agriculture, Environment;
2. Mining, Chemicals, Energy;
3. Education and Science etc.)
• Japan follow Enterprise Union
• Bangladesh also follow Enterprise Union
• UK follow occupation union having 200-300 unions
 The distinctive feature of Japanese Trade
union organization
• Trade union membership - 9 million 981 thousand
(2017)
• Union density – 17.1% (i.e. less than one in every
6 workers is a union member)
– The definition of union density is "the proportion
of paid workers who are union members".
• Japan ranked second behind the united states among
OECD nations in absolute members.
Union members and union density in OECD
countries in 2013
 Total number and average size of
enterprise unions
• Japan trade unions are incredibly small and are
dispersed unevenly throughout the country.
• As of 2017, total number of unions are 24,465 and
average member is 408. For this reason, Japanese
trade unions can not exercise any collective power.

Average size of
Enterprise
Unions in Japan
Connected divisions of Enterprise towards
National Level

National level Regional level

RENGO RENGO

Industrial Federation
Industrial Federation Branch

Enterprise Union Enterprise Union Branch

Japans biggest National Center is JTUC, consisting 72

Federations.
 Functional Characteristics and Limitations of
Japan’s Trade Unions
• Centrally coordinated ‘Decentralized Bargaining’ which
means collective bargaining is conducted at the company
level. For example, pay increases are handled by integrated
industry-based offensives, making for unique mechanism.

• Wage formation by Spring Offensive ‘SHUNTO’- is the

formation with which industrial unions are asked to
participate under a leadership conducted in every spring to
seek wage increases.
– In the last two decades of stagnation in economy, the disparity in
management capacity among Japanese companies have grown so
much that led shunto to face major turning point.
 Network formation for enterprise union collective
bargaining

• Consolidated network for enterprise union collective

bargaining- have been formed at every level from the
micro (companies) and the meso (industries and
regions) to the macro (nationwide/trans-industry).
Stagnating wages since mid ‘90s
 The biggest policy challenge: Break away
from deflation
• Wage levels in Japans as a whole peaked in 1997 and
have been in a downward trend ever since.

• Not only the government but also labor and

management felt that deflation was to blamed for the
prolonged stagnations for the Japanese economy.

• In autumn 2013, the government set up a “Tripartite

Conference to ‘Achieve a Virtuous Economic Cycle”
with a view to creating an environment in a form that
involved the labor side.
Raise the minimum wage:
 Joint consultation system as a channel of
communication
• One feature of industrial relations in Japan is the joint
consultation system, i.e. standing bodies for discussing
various managerial issues between labor representatives
and corporate management.

• The penetration rate for joint consultation system stands at

39.6% in enterprises with 30 or more employees, with
system in place at 83.3% of companies with trade unions
and 19.9% of companies without trade unions.
 Current situation of Labor-Management
communication
• “Survey on labor-management communication”-
1. Nearly 90 percent of the companies consider that labor
management communication is ‘important’
2. As for the evaluation on current status of labor-management
communication, two thirds of the companies answered that
it is ‘good’.
3. Both companies and employees place the most importance
on ‘personal relationship at the workplace’ for
communication.
4. Workplace meeting held on three main areas:
Improved business operation
improved working environment
Better personal relationship at workplace
 Industrial Relations and Productivity

• Improving the productivity of industry was an urgent issue

for the reconstruction of post war Japanese economy
• In 1955, the tripartite ‘Japan Productivity Center (JPC)’
was established. It was the beginning of the productivity
movement in Japan.
• ‘Three Guiding Principle of the productivity movement’
was adopted at the first conference of JPC, May 20, 1955.
The Three Guided Principle of the Productivity
Movement in Japan (1955)

• Expansion of employee –Full employment based on

flexible allocation of labor.
1.

• Cooperation between management and labor –

Participatory management practices at enterprise level
2

• Fair distribution of fruits of productivity –

Institutionalization Japanese style wages formation.
3

Relationship of mutual trust between management and labor

 ‘Three Pillars’ of the traditional Japanese
Employment System
1. Lifetime employment:
– Long-term employment until mandatory retirement
– Annual recruitment of new grads
– Government policies to encourage firms to keep people
employed.
2. Seniority-based Pay and Internal Promotion
– Compensation based on ability, experience, family need
– Skill formation as a basis of internal promotion
3. Enterprise Unionism
– Cooperative IR/HR
– Flexible and moderate wage formation under
decentralized collective bargaining
 Outcome of the traditional system

• According to the historical analysis of the Japanese

employment system, the shift from spot labor markets
to long-term employment was initially driven by
efficiency consideration.
• The long term employment enabled the firms to
accumulate higher humane capital.
• It contributed to achieve greater productivity
 Changing Environment

• Demographic Change
Decreasing and rapidly again population
• Economic stagnation
Japan as the lost one
• Growing Uncertainty of the firm
Bankruptcy, Corporate reform, M&A etc.
• Unstable Economy with big structural changes
Low growth with big fluctuations
Changing industrial and occupational structure
Rapidly growing irregular employees
 Re-evaluation of the traditional system

• Since, mid 2000s, employees as well as corporate

executives are re-evaluating the traditional system
• The ratio of workers supporting lifetime employment and a
sense of unity with the firm is increasing
• The top executives are again taking employees as the most
important stakeholder of the firm
• Thus, hybridization of the new and traditional employment
system is going on in Japan.
Japanese trade unions at crossroads; Phases of
union decline:
Loss in overall union membership (two phases of union decline)

2. Decreasing absolute number of

1. Decreasing of union density unionized workers

• From the late 1970’s • Absolute number of

onwards, the over union unionized worker peaked at
density rate in Japan has just under 12.7 million
trended downward,
in1994
 Falling below:
• After that it has continued
 30%, 1983
to fall at an ever-increasing
 25%, 1991
rate.
 20%, 2003
Japanese trade unions at crossroads; Causes of
union decline

• Major causes includes

1. Reduced pace of new unionization
2. Change in employment structures
3. Change in workers awareness
4. Declining population
5. Stagnated economy
 New trends in the late 2000s
Union membership has fallen remarkably since the last
1990s. However, the pace of the decline has been slowing
down since the 2005.
Progress in the organization of part-time
workers
 From decline to rebirth: Coping with globalization
corporations are crossing the border
Half of the listed companies are operating overseas
 Enterprise unions in MNCs are discussing with the
management on Global CSR
Global framework agreement between AEON group and global
unions

AEON is Japan’s largest retailer and aims to be Asia’s number one regional
retailer. AEON employs 420,000 staff and is present in 13 countries.

The agreement confirms the commitment of AEON to its staff and to the
core labor standards of the ILO. There is a commitment to continuous
social dialogue to improve workers’ welfare and to bring a social dialogue
to the anticipated expansion of AEON in Asia and globally.

AEON Basic Principles are to pursue peace, respect people and contribute
to the local community based on the idea of customer first.
 Enterprise unions in MNCs are discussing with the
management on Global CSR
(A case of Toshiba: From the CSR report 2017 of Toshiba corp.)

Policy on Labor-management relations

Toshiba supports the principles of the Universal Declaration of Human
Rights, the United Nations Global Compact, and the OECD Guidelines of
Multinational Enterprises, and works to ensure that its employees have
fundamental labor rights.
In the labor agreement concluded with the Toshiba Labor Union, Toshiba
stipulates that the Labor Union has the three right of labor (the rights to
association, the right to collective bargaining and the right to act
collectively)
 Enterprise unions in MNCs are discussing with the
management on Global CSR
(A case of Toshiba: From the CSR report 2017 of Toshiba corp.)

Relationship with Toshiba Union

Toshiba maintains a good relationship with the Toshiba Union, which
represents their employees. Management and union representatives
periodically negotiate and discuss employees working conditions and other
matters.
 
At the Toshiba Group Labor-management Congress held every six months,
Toshiba discusses the Toshiba Group’s business policies with
representatives of the Association of Toshiba Group Unions with which the
labor unions of Toshiba and Toshiba Group companies in Japan are
affiliated.