Big firms approve pay raises

Carmakers, electrical manufacturers and other major domestic corporations on Wednesday offered to give their workers mandatory annual pay raises in response to their labor unions’ demand in this year’s wage hike talks.

Their replies were perceived as satisfactory to labor unions at these companies, most of which had demanded automatic annual pay raises–known as teiki-shokyu, or teisho–amid the protracted recession.

Their offer came at the peak of this year’s annual labor-management wage hike negotiations.

Meanwhile, the leading corporations’ responses to requests for greater seasonal bonuses–usually paid twice a year–were mostly disappointing to their organized labor.

For example, Toyota Motor Corp. declined to fully accept the union-demand level of bonuses, meaning it has refused to do so for two consecutive years. Such was also the case with responses from management at electrical manufacturers.

Earlier, Japanese Trade Union Confederation (Rengo) President Nobuaki Koga said teisho wage hikes should be treated as a lowest limit acceptable to member unions in this year’s wage hike bargaining.

Annual wage hikes negotiated between labor and management consist of a teisho automatic pay raise, and what is known as beisu appu–simply, be-a–or an increase in the base wage scales adjusted to the age of individual workers and the length of their continuous employment.

On Wednesday, Toyota offered to pay annual bonuses equivalent to five months’ basic pay plus 60,000 yen, compared with its union’s demand worth five months’ basic wages plus 100,000 yen. The fall below the union-demanded level for two straight years was the first since 1982, when Toyota Motor Co. and Toyota Motor Sales Co. were merged to create the current Toyota Motor Corp.

This seemed to reflect a projected operating loss to be incurred by Toyota and its massive recalls, according to analysts.

Meanwhile, Nissan Motor Co. fully accepted its union’s demand equivalent to five months’ base pay, and Honda Motor Co. 5.7 months’ basic wages.

Nissan also offered to increase its average monthly pay for young employees by 200 yen in consideration of the financial circumstances surrounding them nowadays, compared with its labor’s demand of 1,000 yen. The carmaker also pledged to give its workers a teisho automatic pay raise.

Prior to this year’s annual wage hike bargaining, Rengo said it would strive to gain teisho hikes, instead of demanding be-a increases in the base wage scales laid down by corporations in each industry. With Rengo’s basic wage hike policy, labor unions at most major corporations demanded only teisho raises.

In the initial stage of this year’s negotiations, management at major corporations took a hard-line stance, even hinting they would refuse to give workers teisho pay hikes. In the end, however, corporate executives accepted the labor side’s demand for teisho raises in the belief that doing so is necessary to maintain their employees’ morale, according to a Mitsubishi Electric Corp. official in charge of labor affairs.

Another probable factor behind their offer was the slight sign of an economic recovery, as shown by an improvement in industrial production, an analyst said.

Last year, some electrical manufacturers imposed a freeze on their teisho pay raises in the wake of wage hike bargaining. As circumstances stand today, however, no major corporation is seeking to do so.

But this does not necessarily mean that the long-running practice of labor and management treating teisho increases as a given will go unchallenged. During this year’s wage hike talks, in fact, management at some top-ranking corporations told their unions that they wanted to reconsider the amount of teisho hikes in future negotiations. This shows corporate executives likely will continue discussions with labor over the propriety of treating teisho raises as a matter of course, according to analysts.