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Business, labor give nod to Abe’s call for new overtime cap

  • March 14, 2017
  • , Nikkei Asian Review , 4:10 am
  • English Press

Prime Minister Shinzo Abe on Monday asked the heads of the nation’s leading corporate and labor federations to limit overtime to less than 100 hours a month during busy seasons, his government’s main thrust so far in seeking to change how Japan works.


Abe met with Sadayuki Sakakibara, chairman of the Japan Business Federation — commonly known as Keidanren — and Rikio Kozu, president of the Japanese Trade Union Confederation, or Rengo.


Before the talks at the prime minister’s office in Tokyo, the business and labor leaders drafted an agreement on overtime limits. The document called for an annual cap of 720 overtime hours, or an average of 60 hours per month, if workers and management agree to it in separate contracts

These contracts allow employers to skirt a statutory cap on overtime of 45 hours a month and 360 hours a year.


However, the text drew the line for overtime during busy seasons, such as December or the March fiscal-year end, at 100 hours a month. The exception for these times has proven a sticking point in the debate on limiting overtime.


Both the business and labor leaders suggested they could agree to Abe’s call to aim for less than 100. “We take the prime minister’s request seriously,” Sakakibara told reporters after the meeting.


“This is one of the biggest reforms in the 70-year history of the Labor Standards Act,” said Kozu.

The sub-100-hour threshold is expected to be unveiled at a meeting Friday of the government’s council on work reform as a proposal with the blessing of both business and labor. By the end of this month, the government will create an action plan on work reform that will also include steps to improve conditions for part-timers and other “nonregular” workers.


The aim is to submit relevant bills to the parliament sometime this year, with the new standards to take effect in the fiscal year beginning April 2019.


The draft agreement between the business and labor federations also includes the adoption of a legally binding period of rest between consecutive work shifts.  The two sides also see eye-to-eye on reviewing the overtime caps five years after the changes are put in place, in part based on the number of certified deaths from overwork — or karoshi.  


The new rules would apply to construction, trucking and other industries that were previously exempt from overtime limits, though the government is negotiating a grace period with the business community.

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