LECTURE MEMORANDUM ON LABOR POLICY (WINTER 2008 HAMAGUCHI)
Chapter 5: Industrial Relations Policy
In the past, this area was the main policy issue in labor law. More than half of studies were dedicated to this field. However, it has been reduced to mere small part of labor law policy. It became out-of date theme. In the future, however, this theme must be one of the most important areas, particularly employees’ representation system, because it is crucial in the proper operation of employment contract policy.
Section 1: Trade Union Policy
(1) Trade union policy in pre-war era
The first legislation concerning trade union in Japan was Public Peace Police Law in 1900. The objective of the Law was to restrain the political activities of the people who opposed to the regime and to restrict trade union activities. Article 17 of the Law prohibited to “seduce or incite others”“in order to let others join ･･･ an organization which aims at collective action concerning of work or remuneration”, “ in order to let him refuse an offer of employment with the view to organizing a strike” and“in order to compel the other party to agree to the conditions of remuneration”. The Law did not prohibit the existence of trade union literally. However, it actually banned almost all activities of trade unions. The Law suppressed even moderate trade union leaders who followed American Federation of Labor in US. It made them go to radical socialism.
After the World War I, Japanese government set up Relief Work Council as a consultative organ of Minister for Home Affairs in 1918. Mr. Tokomani, the Home Minister, consulted how to harmonize capital and labor. In 1919, the Council reported that trade unions should be developed naturally and that article 17 of Public Peace Police Law (de fact ban on trade union activities) should be deleted. The government declared at the Diet that it would no longer prevent establishment of trade unions. This generous policy reflected the establishment of ILO in 1919. However, deletion of the article 17 was not carried out at this time.
In 1920, the government set up Temporary Industrial Council as a consultative organ of the Cabinet. Both Ministry of Home Affairs and Ministry of Agriculture and Commerce drafted bills for Trade Union Law. Both drafts were discussed in the Council but it could not decide which draft should be adopted. Opposition parties also submitted their proposals for Trade Union Law. It was one of the focal point in Japanese political debate.
Social Policy Bureau was set up at the Ministry of Home Affairs to deal with labor and social administration in 1922. The Bureau began to draft Trade Union Law on the basis of European trade union legislations, in particular following the German model.It published the draft and consulted it to Administrative Council in the Cabinet in 1925. The draft was very progressive one, which did not require official permission to establish trade union, prohibited dismissal of workers on the ground of union membership, recognized validity of collective agreements,exempted trade unions from civil liability of labor dispute. It means that even if a trade union carries out strike and it causes damage to the employer, the union is not liable for the damage. Trade unions and many academics supported the draft. But employers opposed the draft fiercely. Other ministries, such as Ministry of Industry and Commerce, Ministry of Agriculture, Ministry of Finance, Ministry of Post, Ministry of Railways and the Military, also opposed the draft of Social Policy Bureau. Administrative Council modified the original draft completely. Based on the modification, the Wakatsuki Cabinet submitted a bill for Trade Union Law in 1926. The bill lost the progressive character in the original version.It required trade unions legal personality andthat it should be organized by professions or industries, it also prohibited confederation of trade unions, made trade union liable for the damages caused by labor dispute, and even authorize Minister to order the dissolution of trade union. This bill admitted abstract right to strike, but actually made it impossible. While trade unions turned to opposition, employers continued their fierce opposition. At last, the bill was shelved and discarded in the House of Representatives in 1927. At that time, however, article 17 of Public Peace Police Law was deleted.
In 1929, Hamaguchi Cabinet declared the establishment of social policy as one of its objectives and set up Social Policy Council as a consultative organ of the Cabinet. The Council reported that Trade Union Law should be enacted in the form of original progressive version. The government published a new draft for the Law, which resembled the original version but had no provision on prohibition of dismissal of workers on the ground of union membership. Again, employers developed a nation-wide opposition movement.They criticizedthat the draft would be destructive to family-like master and servant relations. The government completely modified the draft, which showed substantial regression. In 1930, the government submitted the modified bill to the Diet. The bill somehow passed through the House of Representatives, but it was shelved and discarded in the House of Lords in the end.
In short, pre-war Japan had no legislation on trade unions at all.
(2) The enactment of Trade Union Law
Immediately after the surrender in 1945, Japanese government decided to make law on trade union responding to new labor situation. GHQ ordered reforms including promotion of organization of trade unions. The government set up Labor Legislation Council and consulted on trade union legislation in October. The Council carried out the drafting work very swiftly and reported almost perfect draft bill in November. The first Trade Union Law in Japan was adopted in the Diet in December 1945, just 4 months after the surrender.
Many people would assume that the legislation was largely influenced by American labor law under the supervision of GHQ. But actually, the 1945 Trade Union Law was substantially inspired by German labor law model. Prof. Suehiro of TokyoUniversity was appointed as a drafter of the bill in the Council, and he drafted it according to German labor law theory which was intimate for him. Therefore, it resembled pre-war drafts of trade union law.
The Law left the organization of trade union free will of workers. It did not require official permission or license, but it required its notification to authority. It prohibited employer to dismiss or to discriminate workers on the ground of union membership. It was also prohibited to make non-membership or withdrawal from union a condition of employment (yellow dog contract). It exempted trade unions from civil liability and even criminal liability (in case of justifiable act) of labor dispute such as strike. It does not mean that unions are exempt in case of violence or injury. It just means that unions are not indicted for intimidation or menace. It gave collective agreement not only obligatory effect (rights and obligations based on contract) but also normative effect. Normative effect of collective agreement nullifies the provisions in individual employment contract which do not fulfill the standards in the collective agreement, and replaces them with the provisions in collective agreement. So it is impossible to treat an individual worker less favorably than other workers. The Law extended the normative effect to non-members in the establishment when the union organized at least three-quarters of the workers in the establishment. It even extended the effect to non-members in the region when the union organized “majority” of the workers in the region. The last alternative has been hardly utilized because of enterprise-wide organization of Japanese trade unions.
The 1945 Trade Union Law was applied to all workers irrespective of public or private sector. Then all public servants (except for police, fire-fighting and prison officer) enjoyed not only the right to organize but also the right to bargain collectively and even the right to strike. But this system was reversed a few years later.
(3) McArthur’s letter and reversal of the system in public sector
The labor movement led by radical communist group carried out many disputes. At last in 1947, they planned so-called “February 1st general strike” by public sector trade unions such as railway workers, post and telephone workers, teachers and civil servants. On the day before the planned general strike (January 31 in 1947), General McArthur decided to ban such a strike and later he issued so-called “McArthur’s letter”.
The letter stated that “all government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.･･･The employer is the whole people”. Thus, public sector workers were deprived of their right to bargain collectively and to strike entirely. But he suggested that railway workers would be exempted from this treatment.
Japanese government immediately issued Government Order No.201 which prohibited collective bargaining and dispute action by all public sector workers irrespective of their status. Existing collective agreements in public sector were declared null and void. In a word, extreme trade union movement in the public sector dug their own grave.
After that, National Public Service Law was revised to incorporate the above-mentioned provisions in Government Order No.201. And Public Corporation Labor Relations Law was enacted based on the McArthur’s letter. At first stage, the law was applied to only national railway and monopoly of salt and tobacco. Afterwards, post and telecommunications, forest and other government enterprises were included.
Labor disputes were strictly prohibited for both groups. Banned were not only to “engage in strikes, slowdowns or any other acts hampering the normal course of operations” but also to “conspire to commit instigate or incite such prohibited conduct”. Employees who have committed such acts “shall be dismissed”. Public servants were also denied their right to bargain collectively. But workers in public enterprises were allowed to bargain collectively with their employers without resorting to dispute acts. They are in the middle area between private sectors and pure public servants.
In 1980s, National Railways and Telephone and Telegraph were privatized. Japan Post was also privatizedin 2007 thanks to Koizumi reform. The middle area is shrinking.
(4) 1949 Revision of Trade Union Law
The 1949 revision of the Law was completely inspired and directed by GHQ. It began with GHQ’s handing a draft to the officials of Ministry of Labor in January 1949. In February, Ministry of Labor published a tentative draft, which contained provisions on unfair labor practice and bargaining unit system. These are unique characteristics of American labor law system, which do not exist in European labor law tradition. The intention of GHQ was to introduce this American system into Japanese labor law.
Under the bargaining unit system, only one trade union is designated as a single bargaining union in the certain bargaining unit and the collective agreements concluded by the bargaining union are applied to all employees within the bargaining unit. Faced with oppositions from trade union side, bargaining unit system was abandoned in the March draft. It was introduced into only Public Corporations (afterwards deleted).
In contrast, provisions on unfair labor practice were maintained in adopted Law. The 1945 Law already contained provisions on prohibition to dismiss or to discriminate workers on the ground of union membership and to make non-membership or withdrawal from union a condition of employment. But these acts were only punished and not remedied. The 1949 revision introduced administrative remedial procedure by Labor Relations Commission for such acts. The new Law also defined “to refuse to bargain collectively with the representative of the workers employed by the employer without proper reasons” and “to control or interfere with the formation or management of a trade union by workers or togive financial support in defraying the trade union's operational expenditures”as unfair labor practice.
Upon receiving the complaint, the Labor Relations Commission investigates and holds a hearing on the merits of the complaint. If it finds that an unfair labor practice has been committed, it issues a remedial order. If the employer is dissatisfied with an order by the Local Labor Commission, he/she may seek administrative review by the Central Labor Commission.
In 1952, some minor revisions were conducted. But in almost half century, the Law had few revisions which touched the main construction of the Law. And another type of employees’ representation system has been developed recently.
(5) ILO Conventions and Basic Labor Rights
The basic ILO Conventions in the area of industrial relations are Convention No.87 concerning Freedom of Association and Protection of the Right to Organizeadopted in 1948 and Convention No.98 concerning the Application of the Principles of the Right to Organize and to Bargain Collectively adopted in 1949. Article 2 of the Convention No.87 provides that “workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to join organizations of their own choosing without previous authorization.” Article 3 of the Convention stipulates that “workers' and employers' organizations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organize their administration and activities and to formulate their programs,” and “the public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof.”
The provisions in Public Corporation Labor Relations Law disqualified those unions which accepted as members, or elected as leaders, workers who were not employed by one of the public corporations. The unions in the public sector suffered from the government policy of refusing to bargain with unions whose leaders had been dismissed because of prohibited strike action. The unions appealed to ILO agencies, including the Committee on Freedom of Association and the Committee on the Application of Conventions and Recommendations. They insisted that Japanese Law violated the Convention. After the long lasting struggles, the Japanese Government abolished the provisions which contradicted Convention No.87 and ratified it in 1965.
Legal Text:
Trade Union Law
Order for the Enforcement of the Trade Union Law
Labor Relations Adjustment Law
Order for the Enforcement of the Labor Relations Adjustment Law
ILO Convention No.87 concerning Freedom of Association and Protection of the Right to Organize
ILO Convention No.98 concerning the Application of the Principles of the Right to Organize and to Bargain Collectively
ILO Recommendation No. 91 concerning Collective Agreements
ILO Convention No. 154 concerning the Promotion of Collective Bargaining
ILO Recommendation No. 163 concerning the Promotion of Collective Bargaining