Supreme Court rules New National Theater Chorus member and INAX Maintenance contracted-out workers are ‘workers’

Statement by
National Confederation of Trade Unions (Zenroren) Secretary-General ODAGAWA Yoshikazu

April 13, 2011

A member of the New National Theater Chorus and a contracted-out maintenance worker at INAX Maintenance each won a landmark Supreme Court ruling on April 12. Pointing out that they should be protected by the Trade Union Law, the top court quashed the Tokyo High Court’s rulings that denied their worker rights saying that they are individual contractors receiving singer’s performance fees or outsourcing fees. In giving the ruling, the Supreme Court reinforced judicial precedents as well as the Central Labor Council’s view by shining light on these people’s actual jobs under contracts for outsourcing work, thus reaffirming that they do jobs as workers.

The National Confederation of Trade Unions (Zenroren) welcomes the Supreme Court ruling and pays its respect for the plaintiffs’ tenacious struggle to win this lawsuit.

In the New National Theater case, the Tokyo High Court upheld a Tokyo District Court decision to deny these contractors are not workers protected under the Trade Union Law. Having turned down the lower court decision, the Supreme Court said the plaintiff should be recognized as a worker under labor laws and remanded the case to the Tokyo High Court for examining if there weren’t any unfair labor practices on the part of the New National Theater.

In the INAX Maintenance case, the Tokyo High Court rejected the Tokyo District Court ruling that recognized the plaintiff as a worker protected under labor laws. The Supreme Court quashed the Tokyo High Court decision and recognized that the plaintiff, a customer service engineer, has been working for the company on an individual work contract as a worker protected under the Trade Union Law, adding that it is unfair for INAX Maintenance to reject collective bargaining. With this, the Tokyo District Court decision became final.
These Supreme Court rulings were based on the recognition that (1) the worker is incorporated into the company’s organization; (2) the work contract is unilateral; (3) compensation is paid for work provided; (4) the worker assumes the responsibility to fulfill the terms of contract; and (5) the worker is bound by the company’s chain of command.
In its “New Directions for the Japanese-Style Employment System” published in 1995, the Japan Business Federation (Nippon Keidanren) made labor mobility its main direction, encouraging employers to increase the use of more contingent workers or try to avoid labor laws and regulations by treating workers as independent contractors even though they are working on the same conditions as other employees. As a result, an estimated 1.2 million people are treated as independent contractors, who are not protected under labor laws, according to documents compiled by a Health, Labor and Welfare Ministry study group on labor-management relations.
Independent contractors are workers but are excluded not only from the social insurances and the labor insurance but also from worker protection under labor laws. Left without basic labor rights, they are forced to work under unstable conditions. We strongly oppose imposing on workers labor contracts that exclude them from the application of Article 28 of the Constitution that guarantees the workers a right to negotiate with the employer on an equal footing.
The recent Supreme Court decision is significant in that it recognized that certain individual contractors should be treated as workers protected under Article 3 of the Trade Union Law that provides for broader definition of such workers than the Labor Standards Law. These rulings in the New National Theater case and the INAX Maintenance case, as well as the earlier Supreme Court ruling in the CBC (Chubu Nippon Broadcasting Company) Symphony Orchestra case (1976), show that there is an emerging trend that opposes denying the rights individual contractors’ as workers under labor laws when they are actually hired as workers.
We believe that this trend will help stop the employers’ tendency prevailing throughout the country to deny certain workers basic labor rights on the pretext that they are working on outsourcing contracts or as individual business owners. We believe that it will help society accept the principle that treating workers as workers is unavoidable and that building labor relations through the trade union is essential.
We emphasize that independent business owners actually working as workers are guaranteed the three labor rights under Article 28 of the Constitution and call for the right of association to be exercised for improvements in the working conditions.