Litigating Equal Pay for Equal Work in Japan, 2012–2020

Abstract

Litigation and courts have been important arbiters of labour policy reforms aimed at redressing Japan’s growing social inequality. This article considers seven lawsuits brought by non-regular workers, who sought to use Article 20 of the 2012 Labour Contracts Act to gain equal pay for equal work. All seven cases reached Japan’s Supreme Court amid Abe Shinzō’s 2018 labour reforms. The Court’s interpretations reaffirmed employer discretion in categorising employees as a reasonable principle, albeit one which limits the law’s power to redress wage inequality. However, the Court also found the non-provision of various minor benefits to be unreasonable. These outcomes evince a pattern in which litigation marginally transforms reformed labour policy into institutional support for greater equality of compensation and benefits between workers of different statuses. More than advancing equal pay for equal work, the outcomes of these cases support recent government-industry campaigns to boost productivity by encouraging increased use of job-based treatment and diversifying Japan’s employment system.

Key Words:

• Equal pay for equal work
• inequality
• Japan
• non-regular employment
• Work Style Reform

Acknowledgments

The authors are grateful to anonymous reviewers and the editor for perceptive comments and suggestions for improving the article.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Fugōri is officially translated as “unreasonable.” “Irrational” or “illogical” are also viable English equivalents. Unless otherwise noted, translations from Japanese are those of the authors.

2 One source, plaintiff M, worked as a research assistant for one of the authors, who met plaintiff M before her case had achieved notoriety. He hired her because she seemed familiar with the laws and litigation around these issues, and especially because she had quit her work at a medical university and needed a job with flexible hours.

3 Hamaguchi (2011, 2013) defines regular employment as a “membership” contract that assumes an unlimited nature of work and deference to managerial prerogatives in exchange for the protection and benefits they enjoy. Building on T.H. Marshall’s idea of industrial citizenship, Imai (2021) argues that regular employment in Japan constitutes “company citizenship” where privileged access to seniority wages and benefits amount to a particular form of status in return for meeting managerial demands for flexibilities.

4 The Equal Employment Opportunity Law (EEOL) was a classic example. The government established the EEOL in 1985, primarily to meet international obligations as a signatory to the United Nations Convention on the Elimination of All Forms of Discrimination against Women. The EEOL established no new rights for women, but it provided incentives for managers to create new employment classifications to justify differentiated treatment for female employees (that is, to evade the EEOL) (see Upham 1987). The Revised EEOL of 1997 established stronger rights but mandated no penalties for violations. The second revision in 2006 addressed only older forms of discrimination (such as height, weight, or strength requirements) which had already been replaced by purposeful mis-classification and various forms of managerial gatekeeping as the main barriers to equal opportunity, promotions, and equal pay for equal work by employed women. Another revision, in 2014, eliminated menstrual leave and prohibitions on night work for women in the name of “equality.” These are telling details.

5 One justice, Uga Katsuya, dissented on grounds that regular employees who transferred in from the parent company received retirement pay despite working fewer years for TMC than the plaintiffs. He argued that if one of the reasons for providing retirement pay is to reward the employee for their years of service, the plaintiffs deserved to be paid. Uga also agreed with the High Court’s decision that there were no substantive differences in job duties between the regular and non-regular kiosk staff. In addition, two justices appended opinions to the decision stating that companies should show respect for the spirit of Article 20, as well as the new EPEW legislation, by conducting collective bargaining aimed at achieving balanced treatment among workers (see Inoue 2020; Seiryu 2021).

6 Workers on the new general track performed limited tasks, were not eligible for promotion beyond a certain low rank, and were subject to transfers only within the workplace but not to locations requiring a change of residence, even though they were provided with a housing allowance.

7 Imai (2021, 314) argues that the decisions of the Supreme Court reflect the enduring assumptions of “company citizenship” in the Work Style Reform legislation, which served to legitimate a large gap in treatment.

8 While the re-regulation of labour laws aimed to close the pay gap, significant inequalities remain. Kawaguchi (2014) shows that the revised Part-time Labour Act, in effect in 2008, not only did not positively increase the part-time workers’ wages but expanded the wage gap between regular workers for particular occupations. Using individual data on wages between 2005 and 2015, his 2018 study confirmed a wage penalty of 18% for both male and female fixed-term non-regular workers compared to permanently employed regular workers, even after controlling for relevant variables including education, job tenure, occupation, job rank, and workplace. And the gap expanded further when bonus payment was taken into account (Kawaguchi 2018). Nagase (2018) uses individual data from a panel survey between 2002 and 2012 to show that statutory change in employment from a regular to a part-time position results in a 17% wage penalty for women and 15% for men. The implication is that when wage penalty is a result of a change in employment status reflected in the changes to job and/or responsibility, labour reform that aims to close the pay gap by aligning pay to jobs/responsibilities is unlikely to bear fruit.

Additional information

Funding

This work was supported by the Japan Society for the Promotion of Science under Grant-in-Aid for Scientific Research (KAKENHI) [number 19H01561: “Evaluating Work Style Reform: A Workplace-centered Study of Policy Outcomes,” 2019–2021.].