Employees who are so underutilised as to be in effect “unemployed” reached a peak in Japan directly after the Lehman shock, and there are probably still 250,000 employees in that category in 2013, according to Daiwa Research Institute. This would double the current official unemployment total of 200,000 if Japanese companies were able to “release” these employees to the labour market. The major electronics companies have all been in the news recently for announcing their intention to cut jobs inside and outside Japan.
- Panasonic is targetting a 46,000 person reduction, of which 14,000 will be domestic, largely from the Sanyo subsidiary.
- Renesas: 19,000 reduction, 7446 through “early retirement”
- Sony: 18,000, of which 3000 are in Japan
- NEC: 7,000 within Japan, 3,000 overseas
- Sharp: 8,500. Last year 2960 left through early retirement
- Fujitsu: 9,500 in Japan and overseas, including 1600 through the disposal of the semi conductor business
Which still leaves another 150,000 or so ‘unemployed’ employees. As the Nikkei Business points out, on paper Japanese employment laws are actually not that restrictive. Out of the 40 OECD member countries, Japan is 8th in terms of having the least protective employment laws, after the US, Canada, UK, New Zealand, South Africa, Australia and Ireland.
It is possible to implement redundancy programmes, if four conditions are met (need to reorganise personnel, attempt made to find alternatives to redundancy, rational reasons for selection of those who were made redundant, appropriate/fair process followed). However in practice it is only Japan’s smaller companies that carry out redundancies. The blue chips still cling to the unspoken lifetime employment ideal, and find all kinds of euphemisms for encouraging their employees to leave voluntarily.
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