Japan: Life-Time Employment
Yonatan Reshef
School of Business
University of Alberta
Edmonton, Alberta
T6G 2R6 CANADA
F It is often said that only 30%-33%
of all employees in Japan enjoy LTE
F The Japanese workforce consists of well-protected regular
employees (about 70% of the workforce), and less-protected non-regular employees
F The legal protection
against arbitrary discharge is offered to all employees with indefinite period
contracts irrespective of the size of the company or union membership
F The jurisprudence
governing dismissals is based not upon collective agreements but on a general principle of
the Civil Code
- This principle reflects the social norm that employment relations, once established,
should not be unilaterally broken by the employer; employment should be secured at all
cost and dismissal should be the last resort
HRM/IR Flexibility Based on
Employment Security
- Decentralized (firm-level) collective bargaining provides
flexibility in adjusting working conditions and work rules
- Seniority-based pay system
is being transformed into a system of compensation based
on job performance
- Shunto/company unions
- the unique system of annual pay negotiations enables the
parties to quickly respond to changing market conditions
- Employee deployment
blue-collar workers - through job-rotation system, these workers are
expected to develop various skills, and are encouraged to display their potential ability
to improve production processes and product quality
white-collar workers - career development through systematic transfer is the
norm
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