Human Resource Management Keiichiro HAMAGUCHI

Chapter 3 Section 6 Trade Union and Labor- Management Consultation

(1) Enterprise Unionism Trade unions are established within an individual enterprise. They bargain collectively with a single employer. Collective agreements are concluded at the enterprise level. Industry-level collective bargeaning is very rare.

(a) Enterprise Unions Enterprise unions organize both blue- collar and white collar workers, but normally exclude non-regular workers. Interests of regular and non-regular workers differ. Employment security of regular workers are sustained by instability of non-regular workers.

(b) Predominance of Enterprise Unionism Trade Union Law does not require enterprise unionism. But almost all unions in Japan are enterprise unions. This is explained by historical background. Under the long-term employment system, most efficient mechanism is enterprise unionism.

(2) Legal Framework of Trade Unions (a) Plural Unionism Trade Union Law does not require majority support of workers to enjoy statutory rights. There is no minimum number of members. Multiple unions may exist in a single company with full-fledged right to bargain and act collectively. Large companies usually have cooperative dominant unions and radical minority unions.

(b) Union Shop Agreements Union shop agreement requires the employer to dismiss non-member or seceder. But this does not apply to members of another union (Mitsui Warehouse Harbor Express case).

(3) Collective Bargaining (a) Employer’s Duty to Bargain Collectively If an employer refuses to bargain collectively with union without proper reasons, it constitutes unfair labor practice. Labor Relations Commission may issue remedial order. Unlike exclusive representation system in US, minority unions enjoy full right to bargain collectively.

(b) Decentralized Collective Bargaining and Shunto Most collective bargaining takes place at the company level. This decentralized system enables employers and unions to adapt changes. But it lacks universal impact across the industry. To compensate this, industrial federations and national confederation have set the goal for wage increase and coordinate company-level negotiations (Shunto = spring wage offensive). Under Shunto system, strong unions lead, other unions follow.

(4) Collective Agreement (a) Legal Effects of Collective Agreement Collective agreements have both obligatory effect and normative effect. Normative effect: any portion of individual employment contract which contravenes the standards in collective agreement is null and void, and it is replaced with that standards.

(b) Collective Agreement and Individual Contract In EU, collective agreements are concluded at the industry level, and they set only minimum standards. In Japan, collective agreements are concluded at the company level, and they set actual working conditions. Disadvantageous collective agreement has binding effect on union members (Asahi Fire and Marine Insurance case).

( ｃ ) Extension of Normative Effect of Collective Agreement In principle, a collective agreement applies only to union members. When ¾ of employees in an establishment are covered by an agreement, it applies to non-members (plant level extension). A majority of workers in a region are covered by an agreement, it applies to remaining workers (regional extension) (rarely used).

(5) The Diffusion of Joint Labor- Management Consultation Under the joint labor-management consultation system, employers and worker representatives exchange information and views on management, production, working and living conditions. EU countries have statutory works councils.

(6) Joint Consultation and Collective Bargaining In EU, trade unions are organized at industry level and works councils are established at company level. In Japan, trade unions and works councils overlapped. Therefore, collective bargaining and labor- management consultation are difficult to distinguish.

(7) The Importance of Joint Consultation System Many problems on management and production cannot be decided by negotiation. But business strategy may affect employment and working conditions. The exchange of information (including secret matters) and views in the joint consultation is useful for both employers and employees.

(8) Informalization of Collective Bargaining Usually, joint consultation precedes collective bargaining, and participants and subjects are similar. Joint consultation tends to replace for collective bargaining. In joint consultation, workers representatives are regarded as partners, not as opponents.