Human Resource Management Keiichiro HAMAGUCHI

Chapter 2 Section 3 Historical Development of Industrial Relations

(1) Industrial Relations in pre-war era

(a) Early Labor Movement in Japan Weaker tradition of trade unionism (than Europe). Ironworkers Union (first craft union) was formed in 1890s but failed because of repression of employers and government Public Police Peace Law (Article 17) prohibited unions’ activities. There existed only individual wage bargaining.

(b) The Establishment of Works Councils in Japan Labor disputes surged after Russo- Japanese War. Government enacted Factory Law in Employers opposed the legislation and argued “paternalism.” Labor disputes surged again after WWI. The Japanese Federation of Labor was formed in 1919, demanding legal rights.

Government declared it would not prevent moderate unions. Government established Cooperation Association to promote harmonious industrial relations. Cooperation Association proposed works councils legislation. Employers refused to recognize independent unions but compromised on works councils. Works Councils prevailed in large firms. Employers recognized bargaining right for only works councils, excluding trade unions.

(c) The Penetration of Employer Paternalism in Japan Large companies began to refrain from dismissals in 1920s. Trade union movement shifted from large companies to small and medium sized companies. Large firms fired union leaders and kept loyal workers.

Workers covered by works councils (640,000) outnumbered union membership (380,000) in From early 1920s to mid-1930s, employers learned to maintain reputation. Workers learned to appreciate employment security. Workers’ interest shifted from class solidarity to company membership.

(d) Labor-Management Relations during World War II in Japan Industrial Patriotic Front (Sampo) movement covered 4.8 million or 70% of total workforce. Government shifted its stance from tolerating moderate unions to dissolving them. Sampo covered all employees, both white-collar and blue-collar workers. Many workers experienced joint labor- management consultation in Sampo councils. Sampo contributed post-war enterprise unions.

(1)Industrial relations in Post-War Era

(a)Post-war Democratization in Japan Under the governance of GHQ, labor movement exploded under the slogan of “democratization of management.” Many workers (both white-collar and blue- collar) formed enterprise unions. Radical unions carried out “production control.” Many collective agreements stipulated “joint management councils.”

(b) Employers’ Counteroffensive and Eventual Settlement GHQ policy shifted from encouragement to discouragement of radical labor movement. Nikkeiren organized counteroffensive against labor. Rationalization caused by deflationary policy provoked protest of unions. Severe labor disputes took place between 1949 and Radical union leaders lost. Second unions became new enterprise unions. Japanese style industrial relations established.