Human Resource Management Keiichiro HAMAGUCHI Chapter 3 Legal

Human Resource Management Keiichiro HAMAGUCHI

Chapter 3 Legal Aspects of Japanese Employment

Section 2 Recruiting and Hiring

(1) Hiring Practice in Japan • Personnel Division, not line managers, is responsible for entire hiring process of regular workers. • Recruiting starts before graduation and students are formally hired on April 1 st (regular hiring of new graduates). • Hiring via schools for high school graduates. • Hiring directly for university or college graduates.

• Japanese companies hire new graduates from the viewpoint of potential and future possibility, not for specific jobs (New graduate is blank slate). • Important is his/her personality (to get along with colleagues), not major field of study. • Mid-career hiring has been rather rare, but recently increasing. • Hiring throughout the year and hiring of secondary new graduates are introduced recently. • Non-regular workers are recruited at any time by line managers through simple procedure.

Hiring process of regular employees 1 Employer’s recruitment of workers ↓ 2 Applications for the job by the workers (Submission of the necessary documents) ↓ 3 Administration and taking of employment examinations Decision whether they have been passed ↓ 4 Notification of the tentative decision to hire Submission by the workers of their written undertaking and personal references ↓ 5 Diagnosis of the workers’ health ↓ 6 Ceremony marking the entry into the company (normally on 1 st April) Delivery of a written appointment to the job

(2) Freedom of Hiring and its Limitation • Employers have freedom of hiring. • They are not forced to conclude any contract (except for quota for the disabled). • They are free to recruit workers based on any criteria (except for sex and…). • Supreme court confirmed employers’ freedom of hiring based on belief (Mitsubishi Plastics case). • Strict regulation on dismissals affects this interpretation.

(a) Quota for the Disabled • Disabled Person’s Employment Promotion Law set quota for the disabled (1. 8% for private sector, 2. 1% for public sector). • The system does not compel the employer to conclude an employment contract. • It only collects levy from employers who fail to meet the quota.

(b) Equal Opportunity on Recruiting and Hiring (based on Sex) • Sex was allowed as an employment criteria until recently (Male-only or femaleonly recruitment was prevalent). • 1985 EEOL did not ban discriminatory recruitment (only imposed endeavor obligation). • 1997 EEOL prohibited discrimination except for positive action.

(c) Equal Opportunity on Recruiting and Hiring (based on Age) • Age has been the most important employment criteria until now. • Japanese human resources management relied on age criteria in many areas. • 2001 revised Employment Measures Law imposed endeavor obligation, which has lots of exemptions. • 2007 bill for revision of EML will prohibit age limit in recruiting and hiring in principle (under the discussion in the Diet).

(3)Transitional Period (a) Tentative Hiring Decision • College students begin job-seeking very early (more than half a year before graduation). • Companies give “tentative hiring decision”. • What is the legal character of “tentative hiring decision”? • Supreme Court held that employment contract has already established (Dai-Nippon Printing case). • Cancellation of tentative hiring decision needs “objective reasonableness and social acceptability. ”

(b) Probationary Period • New graduates are employed as probationary workers for 1 to 6 months. • Work rules usually state that company can dismiss probationary workers if found unqualified. • Supreme Court held that the criteria for dismissals of probationary workers is whether “objectively reasonable and socially acceptable. ”

(4) Freedom of Hiring and Restriction on Dismissals • Japanese law permit employers broad discretion on hiring. • But once employment relationship is formed, dismissal is strictly limited. • Restriction on dismissals is extended to probationary period or even period of tentative hiring decision. • Employer’s broad discretion on hiring is offset of restriction on dismissals. • If labor mobility increases in Japan, equality principle will become important.

(5) Career Development (a) In-house Vocational Training • Large manufacturing companies carried out in-house vocational training course from pre-war era. • Authorized joint vocational training schools run by SMEs also provided many core workers. • Due to rapid increase in higher education, the number of trainees decreased.

(b) OJT Plan Developed within the Firm • In-house training at Japanese firms is characterized by OJT. • New recruits are assigned gradually from easy tasks to difficult ones. • Individual workplaces are responsible for OJT. • 4 -5 years superior acts as an instructor and gives man-to-man guidance (Elder System). • Middle managers and supervisors are responsible for implementing OJT.

• Advantages of OJT: • Long-term employment outlook encourages workers to make selfdevelopment efforts through their work. • Work attitudes oriented to achieving maturity make them multi-skilled. • OJT instructors are trained in TWI. • Mutual cooperation among workers is fostered. • Production control system is compatible with OJT.

• However, OJT is not suitable for midcareer employees, who have already acquired skills outside the firm. • Companies begin to rethink the human resources development.

(c) Equal Treatment on Education and Training (based on sex) • 1997 revised EEOL clearly prohibited any discrimination against women in education and training except for positive actions.