Law helps or hinders agency staff?

Early in 2014, there was a significant volume of debate about changes proposed to the Worker Dispatch Law by Prime Minister Shinzo Abe’s administration.

The current law—which was introduced in 1986 and last amended in 2012—concerns temporary and despatched workers who have an employment contract with a worker despatching agency, but who work under the direction of the agency’s client company.

According to the law as it stands, employers cannot hire the same despatched workers in the same job for more than three years. The logic behind this is that any position open for more than three years should be considered a permanent job. The exceptions are jobs that require special skills and fall into 26 designated categories.

The primary aim of the proposed change to the law is the abolition of the time limit for jobs outside the 26 categories. This would mean no one despatched worker in any position could be in the same job for more than three years. But the proposed revision seems odd for a number of reasons.

First, although at times keeping high-performance despatched workers in their assigned jobs indefinitely would benefit employers, the revision to the law means they cannot do so.

Even now, the three-year limitation is often circumvented, with employers sufficiently changing the job description and requirements to state that the despatched worker is doing a different job, thereby avoiding both losing staff every three years and having to change jobs for despatched workers to permanent positions.

Second, the change neither encourages employers to create permanent positions, nor does it make it easier to maintain a stable workforce of despatched staff.

Regardless of performance, many of the staff now in the 26 designated categories—particularly those in IT-related roles and doing skilled secretarial or translation work—will have to be released after three years.

Third, and most important, the revision does not address the areas to which most permanent jobs have been lost: part-time and fixed-term employment.

All too often, the Worker Dispatch Law is associated with a decline in Japan’s lifetime employment. For example, the 2012 Employment Status Survey by the Ministry of Internal Affairs and Communications indicates that almost one-third of the men in the working population are in non-permanent work, while the same may be said for over half the women.

But these statistics fail to reveal that most of the non-regular work is part-time and fixed-term, while the ratio of the workforce engaged as despatched workers is only about 3–4%.

This shows that the major change to the country’s employment structure has come not from Japan’s shift away from the lifetime employment paradigm but, rather, from the increased number of part-time and fixed-term employees.

As the current proposed changes stand, it is not clear how the new law might address these major issues, while there is a risk that it might even further complicate the status of despatched workers and despatch agencies.

Now, let us turn to a perhaps more pertinent workforce issue: the participation of women. This has recently been in the spotlight, thanks to the Abe administration’s stated goal of having 30% of senior positions filled with women by 2020. Women account for the majority of non-regular workers and over two-thirds of despatched workers (a small ratio compared with part-timers and fixed-term staff).

Proposed changes to the law thus might do well to focus on ways of enabling women to balance family and career, and give them avenues not only to exit the workforce but to re-enter it in a meaningful way.

The irony is that the current rules governing despatched workers often make it much easier for employers to decide on hiring employees with family constraints, and gaps in either employment or experience. This has the potential to enable employees to acquire the new skills needed to gain regular employment.

Certainly any changes to the Worker Dispatch Law should be aimed at creating more opportunities, rather than less. Moreover, changes regarding the hiring of staff should encourage employers to commit to the long-term—as opposed to the restricted—hiring of staff.