Precedent backs (nearly) equal pay for equal work

In 2012, Japan had 51.73 million workers, of which 33.3 million were regular employees, or seishain, according to the latest survey by the Ministry of Internal Affairs and Communications. Contingent, or nonpermanent, workers (including part-timers, haken dispatch and shokutaku semiregular employees) numbered 18.43 million, over 35.5 percent of the workforce.

When I first began studying labor law in graduate school over a decade ago, contingent workers (hiseiki rōdōsha) were a peripheral phenomenon, but today they form a central pillar of Japan’s workforce.

So what’s wrong with being a contingent worker?

First of all, most have temporary or fixed-term contracts, which translates into roughly zero job security. Despite it being mandatory, many employers fail to enroll their contingent employees in Japan’s shakai hoken health and pension scheme. This raises anxiety among workers about what will happen when they get ill or old.

The biggest problem, however, is wage differences between nonpermanent and seishain employees. For example, these days we see ever more supermarkets and food companies employing low-wage shop managers, posts that were once held exclusively by seishain. They make, say, ¥900 an hour with no bonus and no severance pay. Their responsibilities and hard work are on par with those of the seishain they work with, but there the parity ends. Today, contingent workers make Japan’s industrial world go round.

But is this situation fair or even sustainable?

Labor law says little about discrepancies between the conditions of seishain and contingent workers. Article 3 of the Labor Standards Law prohibits discrimination based on “social standing,” but courts have already interpreted this phrase to exclude employment status. Article 8 of the Part-time Worker Labor Law, enacted in 1993, prohibits discrimination, but “part-timers” affected by the law are limited to those who have open-ended employment, do the same jobs as seishain and are dealt with the same manner as ordinary workers. (Pāto in Japanese has a far broader meaning than “part-time” in English and often includes full-time temporary or other contingent employment.) Few if any part-time workers satisfy such conditions, making the law little more than e ni kaita mochi, or “rice cakes in a painting,” as the saying goes. (In other words, like “pies in the sky,” you can’t eat ‘em.)

The most famous legal challenge to disparities between the two types of workers came in the mid-1990s. Twenty-eight women working on recurring two-month contracts for an auto parts company mustered their courage, unionized and challenged their wage disparity with their seishain colleagues in Nagano District Court. Despite flimsy legal grounding, they asked the court to order the employer, Maruko Keihoki Co., to pay wages lost due to pay that was far less than their seishain coworkers, despite the fact they worked the same production line, did the same job and clocked in on the same hours and days.

Seishain regular workers were paid a basic monthly wage that increased in line with seniority, while the “two-monthers” received daily wages amounting to 60 percent of the average of their seishain coworkers. The plaintiffs asserted that getting lower pay for the same work violated the principle articulated in Article 90 of the Civil Code called kōjo ryōzoku, or public order and morality.

Leading labor law scholars sounded off against the claim, saying Japan has no legal principle of equal pay for equal work and that the court should refuse redress. The claimants’ chances looked dim.

On March 15, 1996, however, the gods smiled down on the Maruko Keihoki 28, with the court ruling that “although equal pay for equal work cannot be considered itself a requirement of public order and morality, the principle is reflected in the two pay-parity provisions (Articles 3 and 4) of the Labor Standards Law and should be a universal value of a society that treats all as equal under the law. Any wage disparity that violates this principle goes beyond the legitimate discretion of the employer and therefore violates public order and morality.”

The judge then ruled that any wages falling below 80 percent of the equivalent for seishain must be repaid to the plaintiffs. This arbitrary threshold baffled commentators, as the court was in effect saying wage disparity is wrong on the one hand, but that 20 percent was fine and dandy.

Maruko Keihoki appealed and the parties settled in what is rightly considered a complete victory for the plaintiffs. The deal included a change from daily to monthly wages, repayment of the disparity in wages, summer and winter bonuses equal to those of seishain staff, and identical severance packages upon leaving the company.

This was the first ruling to recognize wage disparity between the two types of workers as a violation of public order and morality, or kōjo ryōzoku. Despite the mixed message, it is hard to overestimate the impact this verdict has had on later rulings.

The plaintiffs had no specialized labor law knowledge and they fought while caring for their families. Their unifying gripe was the injustice of doing the same work and hours for two-thirds of the pay of their colleagues. Their simple rejection of this indignity inspired them to fight on.

An uplifting addendum to this anecdote is that the seishain at Maruko Keihoki fought arm in arm with the plaintiffs. One regular worker said: “We were astonished when we heard the wages of these women who work right next to us. We thought it was unacceptable and that we had to fight alongside them to rectify it.”

This labor union brought together regular and irregular staff in the fight for equal pay. Lest we forget, this landmark victory was born of worker solidarity that transcended employment status.

by Hifumi Okunuki

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