Dodgy labor practices

Big-name firms using dodgy labor practices

No, this is a picture of Mike Moore talking to the CEO of Nike. It's got very little to do with the content of the article below, but it'd be interesting to see what would happen if Mr. Moore's was involved in this case. More companies might be following Canon's lead.

Thanks to K. for the heads up on the article. I'm not much of an activist myself, but it was a good read...

Some of Japan's biggest manufacturers are skirting labor laws in a practice that allows them to avoid responsibility for the safety of "subcontracted" workers.

The system also leaves the workers vulnerable to low pay and sudden dismissal.

These companies have been repeatedly warned by prefectural labor bureaus to change their hiring practices, but many offenders have not complied, the sources said.

For the past two years, prefectural labor bureaus around Japan strengthened checks into labor practices at factories and plants. Bureau officials said they were especially concerned about the practice of major companies using "fake subcontractors" to fill their work force.

Ordinarily, subcontractors are independent corporate entities that produce parts for the company commissioning the work. Those subcontractors are responsible for the training and safety of their employees.

However, the "fake subcontractors" do nothing more than dispatch workers to the commissioning company.

In the last fiscal year, prefectural labor bureaus found 358 of the 660 companies investigated were using that system to gain workers.

The problem is that these workers are neither employees of the company where they work nor workers dispatched by a temporary staff agency.

The ambiguous status of these workers means that it is unclear who is responsible for their safety. They can also be fired at the whim of the commissioning company.

The companies where the workers perform their tasks give the instructions to those workers, not the so-called subcontractors.

Legal revisions allowed manufacturers to use workers from temp staff agencies from March 2004. And labor bureau officials have repeatedly instructed the companies to convert workers from the fake subcontractors to those from temp staff agencies.

Those instructions have largely gone unheeded.

Companies are obliged to offer full-time positions to workers from temp staff agencies who have worked for a certain period of time. If the companies use the workers from the fake subcontractors, they never have to give them full-time positions.

Among the companies warned by the prefectural labor bureaus are Canon Inc., Hitachi Ltd. as well as subsidiaries of Komatsu Ltd. and Matsushita Electric Industrial Co.

Canon sources said the company would set up an in-house committee from today to stop using the fake subcontractors for workers and to change their status to employees from temp staff agencies.

Canon currently employs about 15,000 workers from subcontractors and an additional 7,500 or so from temp staff agencies. The combined figure matches the total number of full-time Canon workers of about 22,000.

Canon sources said the company also plans to hire several hundred workers from the subcontractors and dispatch workers as full-time employees.

Analysts said the moves by Canon could influence other major companies. Canon's chairman, Fujio Mitarai, is head of Nippon Keidanren (Japan Business Federation), the nation's most influential business organization.

The workers dispatched by the fake subcontractors are in a very weak position.

Most are between 20 and their mid-30s. They receive almost no bonus money and little in the way of raises. Their pay is about half of what full-time company employees receive.

In addition, many of these workers are not registered with the social welfare system, meaning that once their contracts end, they have little possibility of collecting unemployment benefits.

Canon's subsidiary in Oita Prefecture operates a huge factory where about 4,000 workers are from fake subcontractors. That number is about three times the number of full-time employees at the subsidiary.

Sources said the Oita subsidiary received instructions last summer from the Oita prefectural labor bureau to improve its labor situation, but the situation had not been rectified.

(IHT/Asahi: August 1, 2006)