Supreme Court gives contradictory rulings in lawsuits

Unions will increase movement for equal treatment

Japan’s Supreme Court gave rulings in five separate lawsuits over a ban on unreasonable discrimination in working conditions against term-fixed workers under Article 20 of the old Labor Contract Act on October 13 and 15. (Four of the five suits were filed by Zenroren member unions.) In its ruling on the Japan Post case on October 15, the Supreme Court supported the plaintiffs’ claim that it is unreasonable for the employer to discriminate against term-fixed workers in the allowance for dependent and souse support, extra pay for work during year-end and New Year holidays, a right to paid sick leave, and the right to paid summer and winter holidays, and allowances for work on weekend. But in the case of Osaka Medical and Pharmaceutical University, the court on October 13 annulled a high court judgment, which called on the employer to redress the gap for a part-timer who have long worked as administrative secretary to a laboratory in the university and rejected the plaintiffs’ claims.

The Supreme Court ruling in the Japan Post case can be a step forward toward eliminating discrimination against contingent workers in benefits and the holiday system in all business establishments. But the major cause of the gaps in treatment between contingent workers and permanent workers is differences in the basic pay, bonuses and retirement benefits. Unless the growing disparities are rectified, the principle of equal treatment will not be achieved.

There are more than 21,200,000 contingent workers in Japan. They account for 38 percent of all employed workers, and rectifying the gaps and realizing equal treatment is a pressing need. In international labor standards, equal pay for equal work is part of basic human rights, for which Zenroren will increase its efforts. We will make every effort to rectify the gaps in working conditions, including basic pay and bonuses, and realizing the principle of equal treatment by taking advantage of the progress marked by the recent court ruling.

Below are 2 separate Zenroren’s comments on the Supreme Court ruling in the lawsuits filed by Zenroren-affiliates.

Convinced of a significant step forward won by Japan Post workers over Article 20 of the Labor Contract Act, we will further develop the movement to demand rectification of disparities

Kurosawa Koichi
Secretary General
National Confederation of Trade Unions (Zenroren)
October 16, 2020

The First Petty Bench of the Supreme Court (Presided over by Justice Yamaguchi Atsuya) on October 15 gave a ruling on three lawsuits filed in Fukuoka, Osaka and Tokyo by term-fixed workers complaining about the unreasonable differences in working conditions between them and permanent workers. The court recognized that it is unreasonable for Japan Post to maintain unequal treatment between permanent employees and term-fixed employees in allowance for dependent and spousal support, extra pay for work during year-end and New Year holidays, holiday benefits for the New Year period, the right to paid sick leave, and summer and winter holidays. The Supreme Court ruling that the current gaps in the above stated allowances and holidays are illegal marks a milestone in the struggle to achieve equal treatment not only for 180,000 contingent postal workers but also for 21,000,000 contingent workers in Japan. Zenroren expresses its deep respect for the Postal Industry Workers Union which has won the victory and wants to share the pleasure of winning the great achievement with all workers in the country.

It is very significant that the Supreme Court ordered the employer to pay family benefit to contingent workers by saying, “Contract employees also have dependents to support. If they are expected to work continuously, it is reasonable for them to be entitled to family support allowance.” Contingent workers account for 40 percent of all workers in Japan. The ruling will have an unfathomable impact on a growing number of households headed by a couple who are contingent workers or single-parent households. The ruling also said that considering that the paid sick leave is intended to ensure that workers can continue to be on the payroll by providing life security and enabling them to concentrate on recuperation from illnesses or injuries, term-fixed hourly-wage workers should be entitled to paid sick-leave if they are expected to work continuously. The court’s recognition that permanent workers and contingent workers are equally at risk from diseases and that both have a right to recuperate from non-occupational injuries or illnesses is tantamount to recognizing that all contingent workers have equal rights. It is also important that the Supreme Court has rejected the company’s appeal against Tokyo and Osaka high courts’ decision recognizing extra pay for work during year-end and New Year holidays, allowance for work during the New Year holiday period, and a right to summer and winter paid holidays, while ruling that it is illegal to differentiate housing allowance for contingent workers.

But the Supreme Court did not rectify the rulings of the Tokyo and Osaka high courts that differences between permanent workers and contingent workers in the payments of summer- and year-end bonuses are not unreasonable. That’s just as the top court ruled on October 13 in the lawsuit filed by contingent workers at Osaka Medical and Pharmaceutical College. Regarding basic pay, bonuses, and retirement benefit, which are the biggest part of disparities between different types of employment, the Supreme Court ruling has fully supported the employer’s arbitrary arguments and reversed the progressive part of lower court rulings. This is unacceptable. It also shows that the present law on equal pay for equal value of work is defective. We will make effort to further increase the movement to resolve this problem.

In Japan Post, there are also 154 term-fixed employees who are demanding an end to their unequal treatment. We will continue to support their struggle to win and also demand an end to such disparities for 180,000 term-fixed postal employees.

The Act on Improvement of Personnel Management and Conversion of Employment Status for Part-Time Workers and Fixed-Term Workers will go into effect for all business establishments from April 2021. Zenroren is engaging in the movement to end discrimination against contingent workers. Convinced with the major step forward achieved by postal workers, we will work to make known to people how important the trade union movement is. Zenroren is determined to increase common action with broad sections of the people to further develop the movement to correct the disparities that militate against contingent workers.

Our movement to win rectification of discriminatory treatment of contingent workers cannot be stopped by reactionary court rulings

Kuroasawa Koichi
Secretary General
National Confederation of Trade Unions (Zenroren)
October 14, 2020

The Supreme Court’s Third Petty Bench (presided over by Justice Miyazaki Hiroko) on October 13 ruled that not paying bonuses and other benefits to contingent workers does not constitute any unreasonable disparity. This was in a case filed by a contingent employee at Osaka Medical and Pharmaceutical University. The Supreme Court’s Third Petty Bench (presided by Justice Hayashi Keiichi) on the same day gave a similar ruling that failure to pay retirement pay and other benefits to contract workers at Metro Commerce (subsidiary of Tokyo Metro) does not represent unreasonable disparity.

These are rulings that flatly reject the pressing demand of workers for the rectification of disparities and perpetuate such unequal treatment of contingent workers. Full of indignation, we strongly protest at the rulings.

In the case of Osaka Medical and Pharmaceutical University, the biggest issue was payment of bonuses, which should be paid also to contingent workers. The Supreme Court supported non-payment of bonuses, which are paid to all permanent workers, by misapplying the labor ministry’s guidelines, which give the framework that whether to pay bonuses or not can be determined based on the workers contribution of job performance. In each government agency, it has been agreed that bonuses should be paid to contingent workers. A Cabinet Bureau of Personnel Affairs survey shows that more than 90 percent of contingent workers in the government agencies receive bonuses. In local governments too, bonuses are paid to term-fixed temporary employees. The Supreme Court ruling distorts the trend of paying bonuses to contingent workers as well as permanent employees, which is absolutely unacceptable. Regarding payment of wages to workers who have non-occupational injuries or diseases, the Supreme Court accepts the difference between contingent employees and permanent employees on the grounds that it is a system premised on maintaining and securing the employment of permanent employees. We must point out that both decisions were made in disregard of the social efforts being made to promote the rectification of the gaps.

In the case of Metro Commerce, payment of the retirement benefit was the biggest issue. Permanent employees are entitled to retirement benefits if they have been in service for more than three years, but term-fixed workers are not, even if they have been on the payroll for a long period. The high court concluded that the term-fixed workers can receive retirement benefits after comparing them with the permanent employees by using the guidelines as reference. The Supreme Court, without judging on the matter in line with the framework shown by the high court, said, “…it can’t be called unreasonable disparity because their respective expected jobs have certain differences. The top court decision affirms the existence of gaps by arguing as if the contingent workers were to blame for failing to use a system of promoting contingent workers to permanent employees just as in Osaka Medical and Pharmaceutical University. The Supreme Court decision is absolutely unacceptable because it dismisses all gaps on the grounds that there are certain differences in jobs in the present conditions, in which there are systems of arbitrarily using manpower.

The latest Supreme Court rulings in the cases of discriminatory treatment of contingent workers drew the greatest attention since the June 1, 2018, top court decisions in the Nagasawa Un-yu (hauler) case and the Hamakyo REX (outsourced distribution business) case. Tomorrow (October 15), the Supreme Court will give a ruling in the lawsuits filed by contingent workers demanding Japan Post redress the unequal treatment. Law change has relegated Article 20 of the Labor Contract Act to Article 8 and Article 9 of the Act on Management of Part-Time and Fixed-Term Workers and to Article 30, paragraph 3, of the Temporary Staffing Services Law. Although the social situation has changed a great deal since the Labor Contract Act’s Article 20 was enacted, the fight to demand rectification of the gaps in treatment between contingent workers and permanent workers does not end.

Zenroren is determined to help further broaden cooperation with the people in order to further develop the movement calling for ending disparities that are detrimental to the contingent workers.