Three amigos on a mission to protect your rights

The only people who tend to know what I’m talking about when I say the words “labor relations commission” are unionists, labor or corporate lawyers and labor-law scholars. These panels are government enforcement bodies that lack the glamour and fame of the courts, the cops and even the Labor Standards Office, and sound about as dull as dish water. This is a shame, because in actual fact, they do some amazing work. Let me explain.

A labor relations commission is a governmental panel tasked with arbitrating between a labor union and management and providing redress when unfair labor practices have taken place (e.g., union-busting, refusal to negotiate and other violations of the Trade Union Law). Each prefecture has a labor commission and their job is to stabilize industrial relations and protect labor unions.

For any particular case, the labor commission consists of three members: a scholar or lawyer who plays the central and most powerful role of public commissioner (kōeki i’in), the labor-side commissioner (rōdōsha i’in) and the management-side commissioner (shiyōsha i’in). What distinguishes these commissions from the courts — even labor courts — is the fact that only one of the three commissioners is neutral. The three commissioners work together either to resolve any dispute between a labor union and management or to judge whether unfair labor practices have taken place. If they have, the panel will order management to take corrective measures.

Unfair labor practices, including various forms of discrimination against strikes or other union activities as well as expressions of animosity toward the union, are covered by sections 1-4 of Article 7 of the Trade Union Law. Section 1 covers discriminatory treatment against union members or strikers, such as demotions, firings or any other kind of tangible damage. This is called furieki toriatsukai (disadvantageous treatment). Section 2 addresses any refusal to engage in good-faith collective bargaining, or dankō kyohi. Section 3 forbids interference in the running of a union (shihai kainyū), including insulting or defaming the union, discouraging employees to join or encouraging members to resign from the union and the setting-up of “sweetheart unions.” Section 4 covers any discriminatory action taken against an employee for testifying at a labor commission or for being a member of a union suing there.

After a union or worker petitions its local prefectural labor relations commission for redress from unfair labor practices, the three-member panel then conducts an investigation — often including witness testimony — and then decides whether unfair labor practices were committed.

If the verdict is “yes,” the commission will issue an order (meirei) for the company to take all necessary corrective measures to restore the workplace to the status quo that existed before the violation. For example, if someone was fired for striking, then the commission would order management to not only reinstate the employee but also pay all the back wages lost from the time of the dismissal through to the day of reinstatement. If, on the other hand, management had refused to engage in collective bargaining, then the commission would order the employer to negotiate in good faith. Sometimes, the commission will even order the employer to post a public apology, admitting guilt and pledging never to repeat the offense.

If either side is unhappy with the verdict of the prefectural labor commission, they can appeal to the Central Labor Commission in Shinbashi, Tokyo. If they are unsatisfied with that verdict, the only remaining option is to sue the government in court.

The Tokyo Labor Commission handled 804 petitions during the seven years between 2008 and 2014. Of these, 378 were settled prior to a verdict.

Cases can last up to 18 months. They used to routinely take about two years before the Trade Union Law was amended in 2005 to speed things up.

In 2012, franchise owners of FamilyMart stores formed a labor union and requested collective bargaining with the company. The convenience store chain refused to negotiate, stating, “These are independent managers who own franchise stores, so they have no reason to form a union.” The union took the case to the Tokyo Labor Commission, which on April 16 this year recognized the rōdōsha (worker/employee) status of the franchise owners and ruled that FamilyMart had committed unfair labor practices by refusing to negotiate collectively.

Okayama Labor Commission had reached a similar decision on March 20, 2014, regarding 7-Eleven store franchise owners.

“This ruling is extremely unjust,” 7-Eleven Japan commented on the Okayama Labor Commission’s ruling. “It is in no way hyperbole to say this judgment will damage the public good. . . . We will seek an appropriate decision from higher authorities, as this decision flies in the face of the franchise-system business model.”

Management in both cases appealed, and they are both currently being investigated by the Central Labor Relations Commission.

The Tokyo Labor Commission used the following reasoning in coming to the decision to recognize the franchise owners as rōdōsha:

There are some franchise agreements in which the franchisee can be said to be providing labor to the franchiser, so the franchise contract itself is not enough to disqualify the franchise owners as rōdōsha under the Trade Union Law. (Note that the definition of rōdōsha differs substantially under different labor laws, while the definition is considered broadest, encompassing the most people, under the Trade Union Law.)

The rōdōsha status of the union members (franchise owners) in this case should be determined based on a comprehensive consideration of five elements:

a) their relationship to the business organization (FamilyMart);
b) the unilateral or uniform nature of the contract details (i.e., Is it FamilyMart that decides the terms for all franchise owners, who then either take or leave them?);
c) Is remuneration for labor provided?;
d) Is the relationship based on requests for work?; and
e) Are the franchise owners forced to spend a certain amount of time in the store and provide labor in response to what are, in the broadest sense, work orders?

The panel then came to the following conclusions based on the points above:

a) The FamilyMart system would fail to function without the labor provided by the union members (franchise owners), meaning that they are essential to the organization’s operation;
b) uniform contracts with the members are a necessity due to the demands of having a unified image and system for FamilyMarts around the country;
c) the money received by the members corresponds in effect to remuneration or something akin to remuneration for labor provided;
d) the members would have reason to fear refusal of contract renewal if they failed to follow instructions, guidance, advice or recommendations from FamilyMart, making it difficult for them to say no; and
e) the members in effect bound to stay at the store for a certain period of time and to provide labor in accordance with what are, in the broadest sense of the word, instructions and orders from FamilyMart. 

In addition:
f) Members have limited opportunities to make managerial decisions and manage the earnings of the company, meaning they don’t have clear ownership of the business.

The Tokyo Labor Commission used the above criteria to determine that the franchise owners had rōdōsha status with regard to FamilyMart and, therefore, had the right to collective bargaining, meaning FamilyMart is obliged to negotiate.

Although not well known, the labor commission system is extremely important to labor unions, in as much as its raison d’etre is to protect unions and their rights. There are also no court costs and unions rarely need to hire a lawyer to help them pursue cases.

There is, unfortunately, a lot of paperwork that must be prepared and exhibits that must be submitted. However, if the union has solidarity and the resolution and determination needed to see it through, the process can be well worth all the trouble. Patience here is definitely a virtue, as labor commission cases, like court cases, can tend to drag on.

My hope is that more workers will learn about the labor relations commissions, how they function and how they work to protect our union rights.

Hifumi Okunuki teaches at Sagami Women’s University and serves as executive president of Tozen Union. She can be reached at Labor Pains appears in print on the fourth Monday Community Page of the month. Originally published in The Japan Times.