Final Report(japan)

Closing the Representational and Organizational Gap in MSEs A Case study in Japan Reported by Naoko Otani

Introduction This is a report of a case study of Federation of Workers‟ Union of the Burmese Citizens in Japan (FWUBC) in the third phase of closing the representational and organizational gap in MSEs. FWUBC is an individual-based union. All members of FWUBC are Burmese and it is going to organize Burmese workers in Japan so far. Majority of them work in restaurants in Tokyo and the area near to Tokyo. According to the statistic1, there are around 10,000 establishments in restaurant sector in Tokyo. (96%) of them are establishments employing less than 29 workers. 76% of them employ less than 9 workers. Thus, the restaurant sector is characterized as MSEs. The second or third majority of Burmese workers in Japan work in manufacturing sector in Gunma and Tokai area in which automobile manufacturers and suppliers are concentrated. There are two types of trade unions in Japan. One is enterprise-based and the other is individual-based. Enterprise-based unions are majority. In general, enterprise-based unions organize regular employees. On the other hand, individual-based unions have been established partly because the number of irregular workers has been increasing and partly because labour-management relations have been individualized. Organizing irregular workers is fairly under way2. For instance, the estimated unionization rate of part-time workers is 4.8% in 2007. Aiming at strengthening collective bargaining powers of SME/MSE workers and irregular workers, the national center RENGO establishes local unions under its local organizations in which workers can individually join. There seems to be many challenges for individual-based unions in terms of functions and operations including human and financial resources. This case study tries to find out what kind of problems MSE workers have at work and what kind of challenges individual-based unions confront with in practice.

1. Legal status of Burmese workers in Japan According to FWUBC, some of Burmese workers have already acquired a long term residential status by being recognized as refugee and others are asking for it. Briefly, I take a look(look) at the legal status of Burmese workers in Japan. Many of Burmese apply for asylum as refugee after entering into Japan3. If the Immigration Bureau recognizes them as refugee, they acquire a long term residential status4. They are MIC "Establishment and Enterprise Census" RENGO-RIALS (2009) draws factors that unions organize irregular workers by interviewing. 3 According to a trade unionist who support FWUBC’s activities, if a refugee applies for asylum in the validity period of his/her visa, he/she has an advantage over the permission of working. 4 There are cases that they acquire the status of residence of "Designated Activities”, if the Immigration Bureau does not accept them as refugee. For detail, refer to 1 2

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permitted to work in the country if they have the a long term residential status. However, in fact it takes considerable time to recognize as refugee5. In principle, the Immigration Bureau does not permit to work for foreign workers while it is in process to examine whether or not they are refugees. Obviously, the foreign workers face on problems over how to sustain their lives. According to trade unionists of JAM, the Immigration Bureau verbally responds to their question that it will not punish an employer who employs foreign workers applying for asylum as refugee6. This verbal statement is not authorized. In practice, employers easily dismiss Burmese workers due to no residential status even if they are asking for asylum as refugee. Speaking in relation to the Labour Standards Law, which regulates the minimum standards of working conditions, foreign workers, who are employed in the country, are covered by the law even if they do not have the authorization for employment.

2. Horizontal mapping (1) Methodology Interviewing is conducted by 15 FWUBC members. 25 unorganized Burmese workers respond to the questionnaire. (2) Results of interviewing 1) Profile of respondents  Gender Gender Female Male Total

Frequency

%

6 19 25

24 76 100

Concerning gender, we have more male respondents than female ones. It could reflect that there are less female interviewers. 

Age Age 20-29 years old 30-39 40-49 Over 50 Total On average

Frequency 6 7 11 1 25

% 24 28 44 4 100 37.9 years old

http://www.tfemploy.go.jp/index_en.html and http://www.immi-moj.go.jp/english/index.html 5 For example, a leader of FWUBC is in process of deliberation by the immigration bureau for more than five years. 6 If a management employs a foreign worker without the authorization for employment, it is punish according to the immigration law. 2

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Educations level Education level Primary Intermediate Secondary Vocational Tertiary Total

Frequency

%

1 2 15 0 7 25

4 8 60 0 28 100

Household size Number of Household members in Japan (%)

Number of household members overseas

0 person 1 2 3-4 5-7 8-12

4 3 6 2 1 0

2 1 2 7 3 3

Number of household members who earn an income in Japan (%) 4 3 6 1 0 0

Number of household members who earn an income overseas (%) 6 2 1 0 0 1

N.A.

9

7

11

15

Total

25

25

25

25

On average

1.3

4.3

1.3

1.7

At the first workshop, we decided to modify a question related to the household size in the context of the actual situation of migrant workers and refugees. The number of household members in Japan is 1.3 persons on average. Some respond to this question that he does not have any household member in Japan if he lives alone while others respond that there is one household member if he lives alone. 

Sector Sector Restaurant Manufacturing Others N.A. Total

Frequency 14

% 56

8 1

32 4

2 25

8 100

There are two main sectors in which respondents work ( for ). (14) respondents work in restaurants. 8 respondents work in manufacturing sector. 8 people working in manufacturing sector are all male.

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Type of employment Employment type Part-time worker Temporary agency workers Trainee Not identified Total

Frequency

% 17 4 3 1 25

68 16 12 4 100

In interviewing and analyzing, we tried to identify in which type of employment an interviewee works as far as possible. Respondents work as part-time worker in restaurant sector while respondents work as temporary agency worker and trainee in manufacturing sector. The type of employment is relevant with the extent to which workers easily lose their jobs. Regular workers are employed under the contract of employment without term in general. On the other hand, irregular workers, such as part-time worker, contract workers and temporary agency workers, are employed under fixed-term employment contract. Managements employ irregular workers to make labour costs variable. They are first to be dismissed in downturns. In addition, employers are not imposed to contribute social insurance and employment insurance for irregular under some conditions while they are obliged to contribute the insurances if they employ regular workers. A “trainee” is a worker in the system of Industrial Training and Technical Internship Program for foreigners7. A trainee could stay in Japan with trainee status residence for three years. In terms of wage, a “trainee” is employed as trainee in the first, so that an employer should not pay the payment more than minimum wage rate. As a “trainee” is regarded as a worker in the second and third year, an employer should pay wage more than minimum wage rate. The aim of the program is originally to transfer foreign workers technologies and skills on-the-job-training. However, despite the aim, it is reported that employers, especially MSE employers, abuse the program for employing trainees as cheap labour in fact. 

Type of job

Restaurant Job type Frequency General helper 5 Washing 4 Hall staff 4 Not identified 1 Total 14

Manufacturing % Job type Frequency 35.7 Trainee 3 28.6 Lower skilled 4 28.6 Higher skilled 1 7.1 100.0 Total 8

% 37.5 50.0 12.5 100.0

In restaurant sector, women work as hall staff while men work in kitchen. At the second workshop, a couple of participants complain that they do washing dishes in kitchen of a restaurant even if they have educations at university in Burma. At the same time, they indicate that the vocational and educational program should be improved and open to migrant workers. On the other hand, an interviewee could have training to attain a high qualification as welder since an employer provides training program to him. He explains that an employer gives such an opportunity to him because young Japanese do not want to work as welder any more, 7

http://www.jitco.or.jp/english/ 4

otherwise the employer could not continue his business. His wage is relatively high because of the qualification. However, he feels that he will lose the job as an assembly manufacturer is going to insource in order to secure jobs for its own employees. 2) Employment situation  Employment contract Employment contract Verbal Written None N.A. Total

Frequency

%

4 5 14 2 25

16 20 56 8 100

In terms of employment contract, the majority of respondents do not have any employment contract with employers. This fact makes respondents be afraid that it would be easy to lose their jobs. According to the law, an employer should have a written employment contract with an employee. Even if the law regulates employers‟ obligation, employees are disadvantaged without employment contract especially in case of labour dispute. Given this fact, FWUBC encourages members to take a note about with whom they meet and what are explained on working conditions when they have interviewing with a management8. 

Length of service

Hourly wage: yen

Correlation between length of service and hourly wage 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0

2

4

6

8 10 12 Length of service: year

14

16

18

20

On average, the length of service is 3.4 years. There is a great difference from a month to 17 years and 8 months. The important point is that no matter how long they work in the same jobs, their wages do not seem to increase. Possibly, it is partly because they are irregular workers. It could also be taken into consideration that seniority payment is not usual in MSEs compared to large enterprises. At any rate, irregular workers cannot easily access to educations and training done by companies in general. Unless they participate in any educations and training program, there are possibilities that they are fixed in low wage job.

According to RENGO-RIALS (2007), MSE workers do not know workers’ rights protected by the labour laws compared to workers in larger sized enterprises. 8

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Would it be easy to lose your job? Easy to lose a job Frequency Yes 18 No 6 N.A. 1 Total

% 72 24 4

25

100

18 interviewees respond that it would be easy to lose their jobs. Three of them are temporary agency workers and have lost their jobs. 18 interviewees raise the reasons why it would be easy to lose their jobs as follows. - Dismissal because of downturn in volume of order (2 persons) - Because of temporary agency worker (3 persons) - Undocumented/foreigner (5 persons) - No official contract (3 persons) - Part-time worker (2 persons) - Three years contract - Trainee - Depend on chief 

Remuneration Hourly earnings 500-599 yen 600-699 700-799 800-899 900-999 1000-1199 Over 1200 N.A. Total On average

Total Frequency 1 2 0 2 5 7 4 4 25

4 8 0 8 20 28 16 16

Restaurant Frequency % 0 0.0 0 0.0 0 0.0 1 7.1 5 35.7 4 28.6 1 7.1 3 21.4

Manufacturing Frequency % 1 12.5 2 25.0 0 0.0 0 0.0 0 0.0 2 25.0 3 37.5 0 0.0

100

14

8

%

973.9 yen

100

947.9 yen

100

1009.4 yen

The average hourly earning is 973.9 yen. It is higher in manufacture than in restaurant sector. This difference seems to result in the difference of working hour between these two sectors (see Diagram “Working hours per day”). The fact is that the lower wages are in restaurant sector, the longer hours workers have to work for in order to maintain their lives.

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Earnings per day 4000-4999 yen 5000-5999 6000-6999 7000-7999 8000-8999 9000-9999 10000-11999 Over 12000 N.A.

Frequency

Total

% 1 2 0 1 3 2 7 4 5

4 8 0 4 12 8 28 16 20

25

100

On average

9506.3 yen

More than Minimum wage rate Yes No N.A. Total

Frequency

% 15 5 5 25

60 20 20 100

In terms of minimum wages, (5) respondents give answers that their wages are less than minimum wages. In examining data one by one, four of them seem to receive hourly wage more than statutory minimum wage rates9. It is not sure which minimum wage they suggest. Rather, it is more serious that three trainee workers receive wage less than the minimum wage rate. They respond that they work in over one year. Even if they are trainee workers under the system of Industrial Training and Technical Internship Program for foreigners, employers should pay wage more than the minimum wage rate. 

Working hour/day Working hour Total per day Frequency 5 hours 2 72 86 92 103 113 126 N.A. 1 Total 25 On average

% 8 8 24 8 12 12 24 4 100

9.5 hours

Restaurant Manufacturing Frequency % Frequency % 2 14.3 0 0.0 0 0.0 2 25.0 2 14.3 3 37.5 2 14.3 0 0.0 1 7.1 1 12.5 2 14.3 1 12.5 4 28.6 1 12.5 1 7.1 0 0.0 14 100 8 100 9.7 hours

9.1 hours

On average, working hours a week is 9.5 hours. Respondents in restaurant sector work for They are two types of the statutory minimum wages, which are local minimum wage and industry-specific minimum wage. In terms of local minimum wage, the highest hourly rate is 766 yen in Tokyo and Kanagawa prefectures while the lowest hourly rate is 627 yen in Miyazaki, Kagoshima and Okinawa prefectures. 9

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longer hours than in manufacturing sector. According to Monthly Labour Survey by MHLW10, regular workers work for 8.3 hours per day on average. Compared to this data, the 9.5 hours is at high level. Working day per week 4 days67N.A. Total

Frequency

% 11 11 2 1 25

44 44 8 4 100

On average 3) Problems at work  Do you encounter problems related to your work? Categories of problems Yes (%) Job security 8 (32) Wages and benefits 5 (20) Working hours 12 (48) Social security/health insurance 3 (12) Health and safety 9 (36) Relationship with employer 10 (40) Others 6 (24)

5.6 days

No (%) 5 (20) 16 (64) 6 (24) 13 (52) 11 (44) 12 (48) 11 (44)

N.A.(%) 12 (48) 3 (12) 7 (28) 9 (36) 5 (20) 3 (12) 8 (32)

Total(%) 25 (100) 25 (100) 25 (100) 25 (100) 25 (100) 25 (100) 25 (100)

The half of respondents cites working hours as problems related to their work. As mentioned above, it is assumed that long working hours is related to lower wage. In actual, some participants point out that they have to work for long hours because their wages are relatively low at the second workshop. However, only five respondents cite wages and benefits as problem in the questionnaire. It might be because that they do not expect anything as long as they are irregular workers, foreign workers, unqualified etc. Ten respondents cite relationship with employer as problem related to their work. Three of them had been fired at the moment of interviewing. Presumably, employers‟ behavior is prone to be bossy 11 . There might be cultural and language barriers between employers and respondents.

MHLW stands for Ministry of Health, Labour and Welfare One of FWUBC leaders explains his experience. He works in a caterer’s shop. The owner told to employees that it would not pay lamp sum as business conditions was getting worse. According to him, there was an atmosphere in which it would be wrong for employees to go against the owner. Usually, employees did not argue anything. But a occasion took place. A new head of chef publicity argued to the owner that it could afford to pay lump sum to employees. He recognized that the owner made a profit as he was even busier than usual. Such chef ’s response changed the atmosphere and others. Eventually, lump sum was paid to employees. 10 11

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Who do you approach to seek help when you have work-related problems? Whom to ask help Frequency (M.A.) % Co-worker 3 24 Employer/owner/supervisor Union NGO Church Others N.A.

2 2 0 0 10 9

8 8 0 0 40 36

4) Potentials for representation/organizing  What do you think would encourage you to consider being organized? Interviewees give answers below. - Collective bargaining more effective - Capability to help workers. - Capability to stop exploitation. - Capability to get help - If FWUBC protects workers - If FWUBC represents for me in case of any problems occurring at work 

What do you think would encourage your co-workers to consider being organized? Interviewees give answers below. - Raising working conditions - Helping each other - Standing for co-worker - Helping with sympathy - If a trade union protects workers - If FWUBC union represents for me in case of any problems occurring at work

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Which problems or issues at work would be a good organizing theme? Interviewees give answers below. - Preventing unpaid wages - Cooperation and mutual understanding - Less paid - Capability to stop exploitation - Teaching workers' right - If wage cannot be paid regularly, if an employer oppresses employees

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What do you think would be most appropriate form of organization for you? Interviewees give answers below. - An organization able to help me - The government (3 persons) - FWUBC - We should know the main aim of a particular organization. - Trade union

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Would you consider being a union member? To join in a union Frequency Yes No N.A. Total

% 16 3 6 25

64 12 24 100

If no, what would make you consider? Interviewees give answers below. - I don't want to give up my freedom to others - I am a qualified welder. The owner is kind to me. - Because the decisions are made by manager and boss.

(3) Recommendations for organizational strategies: FWUBC At the second workshop, these points are recommended. - Recruiting the unorganized by face to face is more needed. - Periodically providing opportunities members and the unorganized to understand what a trade union is. - Periodically providing opportunities members and the unorganized to inform the labour laws and health and social insurance. It is important to know workers‟ rights in order to protect by themselves. - Supporting members and the unorganized for stable employment. It is necessary to provide a model of employment contract in the mother tongue. It is considerable to implement free job placement services. - Sharing experiences between each other on how to respond to and solve problems at work. - Issuing a bulleting - Strengthening the fiscal base of the organization (from Japanese trade unionists‟ point of view) - Democratically operating the organization - Building networks with other trade unions, lawyers and doctors, etc.

3. Vertical mapping (1) Manufacturing sector There is a lot of literature on manufacturing industry, especially automobile and electronic producers. In terms of SMEs/MSEs, the disparities compared to large enterprise were discussed from viewpoint of dual structure from the end of WWII to the 60s and 70s. To reduce the disparities, various measures were taken. The 80s and 90s, many of them explore why production system including industrial relations in Japanese automobile industry make profits 12 . Asanuma (1997) focuses on supplier system of production system. It explores relationships between final product manufacturers and primary subcontractors to draw that it is efficient for the system to share risks and create incentives of subcontractors to improve their technologies in long-term relations. Ueda (2004) points out that transaction based on the long-term relations has been weakening under globalization. It also shows that processing unit cost is considerably decreasing in SMEs/MSEs. Assemblers and larger subcontracts are 12

See Womack et al. (1990), Coriat (1991), e.g. 10

accused to flow mold drafts outside the country without noticing to subcontractors in the early 2000s. Exposed to the changing transactional relationships, one of measures taken by SMEs/MSEs is to cut labour costs by employing irregular workers, such as contract workers, temporary agency workers and trainees. (2) Restaurant sector

Trends of market size in restaurant sector

(mil,yen)

160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 Source: Foodservice Industry Research

The number of restaurant and the share of joint-stock companies 900000

30

800000

25

700000 600000

20

500000 15

400000 300000

10

200000

Restaurant

100000

% of joint-stock companies

5

0

0 1978

1981

1986

1991

1996

2001

2004

Source: "Establishment and Enterprise Census"

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The share of part-time workers by industry (2007) Total Manufacturing Wholesale and Restaurant and retail hotel Part-time workers (%) Source: MHLW

19.6

13.9

32.1

48.9

The market size of restaurant sector has been shrinking and the number of restaurants has been declining since the late 90s of recession period. On the other hand, the share of joint-stock companies increases. This means that independent restaurants frequently close their business because the management bases are fragile (Oda:2005). Presumably, independent restaurants are prone to be smaller. In reflection of the competition for low prices, the share of part-time workers is higher from other sectors.

Conclusion In light of results of horizontal and vertical mapping and the workshops, these are pointed out to prepare a draft action plan especially in terms of policy framework. - Raising the minimum wages sharply. In setting the minimum wage rate at the council of minimum wage, how much wages are revised in enterprises with less than 30 employees is referred to as critical indicator13. This means that wages in MSEs are affected by the minimum wage. Additionally, the level of minimum wage is less than the level of welfare benefits. - Improving the occupational training and education programs. The present subsidy system of occupational training and education is employer-oriented. Although individual workers can receive educational and training benefits, there are restrictions to apply for them. The present system was built on the presumption of long-term employment. The situation has been changing. Especially, irregular workers increase. They do not have enough opportunities for training done by management. - Frequently providing opportunities for workers to know the labour laws and workers‟ rights in way of user-friendly. - Strengthening of penalties for employers against the labour laws and increasing the number of labor standard inspectors - Expanding coverage for unemployment insurance, health insurance, social insurance and livelihood protection and applying them without exceptions - Having a stronger network with lawmakers in order to improve refugees and migrant workers‟ situation in Japan. Various measures are required (e.g. for improving Japanese, providing apartments without discrimination)

Employers assert that the extent of wage increase in 1-19 employees sized enterprises should be taken as indicator in setting the minimum wage while trade unions insist that the extent in 1-99 employees sized enterprises should be taken at the national council of minimum wage. 12 13

Reference: Asanuma, B. (1997) “Nihon no Kigyou-Soshiki Kakushinnteki-Tekiou no Mekanizumu Tyouki-Torihiki-Kankei no Kouzou to Kinou ” Coriat, B. (1991) “Penser a l‟envers. Travail et organisation dans l‟entreprise japonaise” Oda, K. (2005) „Hennka-suru Gaisyoku-Sangyo no Yasai-Riyou‟ “Gekkann Yasai –Jouhou” RENGO-RIALS (2007) “The 13th Questionnaire Survey on Work and Life of Workers” RENGO-RIALS (2009) “Hiseiki-Roudousya no Soikika Tyoisa-Houkokusyo” Ueda, H. (2004) “Gendai-Nihon no Tyuusyou-Kigyou” Womack, J. P. et al. (1990) “The Machine that Changed the World”

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Appendix

Union density by Industry Estimated union density 2007 2006 ％ ％ 18.1 18.2 2.7 2.9 12.2 15.3 21.3 20.4 25.2 25.5 59.4 56.8 20.1 21.7 26.8 26.8 10.6 10.2 50.3 49.7 2.8 2.6 4.1 3.7 8.5 8.6 23.1 23.3 40.7 44.9 6.2 5.5 44.0 50.0

Industry

Total Agriculture Mining Construction Manufacturing Electricity, Gas etc. Information Transportation Wholesales, retail Finance and insurance Real estate Restaurant, hotel Medical, care Education Mixture of services Service

Public Source: MHLW

Union Density of Part-time Workers 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

2.0 2.0 2.1 2.2 2.4 2.5 2.5 2.6 2.7 2.7 3.0 3.3 3.3 4.3 4.8

Source: MHLW

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