This article investigates the content and decision-making process of the institutions and policies for employment in Japan, “kaiko-kisei (employment protection regulation)” in particular. Very few readers of this journal are likely to have even a rough image of the expression, “kaiko-ken ranyo no houri (abuse of dismissal right)”, that stands at the center of the policy debates over “kaiko-kisei”. The difficulty in transparency increases when one goes into the details of relevant institutions and differences and conflicts in “professional” views and opinions. “The Roudo Seisaku Shingikai (Labour Policy Council)” has long been the central stage and the core of the decision making process. It is a fixed and closed institution, in which the predominant effort has been to align the interests of parties involved. For most Japanese, the issues at stake in the regulation of employment rights, “kaiko-kisei” in particular, are near and important. However, very few readers of this journal are familiar with the details involved in the regulatory process.
Readers will justifiably ask how the theoretical discussion in the first half of the article corresponds to the “kaiko-kisei” in reality in the second half. To answer this question, it is essential to obtain a clear and precise picture of the essence of the actual institutions and policies at stake. Quite often we hear phrases such as “kaiko-kisei” and “kaiko-ken ranyo no houri”, but we fall in deep trouble when we try to understand the precise details. Readers will share, I believe, my long standing puzzle: “is there a common understanding among legal experts, such as judges and labor law scholars?”
Section V is the core of the paper, in which I ask why the relevant situation for so long has been maintained without serious reevaluation.
It is of absolute necessity, in understanding the details of the situation, to start and develop an open discussion with a wide spectrum of participants. As a premise, it is important to ask the government (not the Health, Labour and Welfare Ministry which has left the issues unattended) to investigate, review, re-design and restructure both the regulatory structure itself, and the policy making process. It should focus on the “kaiko-kisei” as a critical issue of EBPM (evidence-based policy making) which the government has promoted as a basic policy for the last five years.
The “kaiko-kisei” is central to the employment policy. Employment policy is central to economic policy, and has a direct impact on a wide variety of economic activities and human life. It significantly influences the vitality and growth of the economy. It reduces the liquidity and dynamism of the labor market, exacerbates resource misallocation and slows the pace of productivity increase in the entire economy. Recognizing that salient favoritism in such words as “kakusa (gap)”, “taitou (equal basis)”, “stability”, “hoshou (security)”, “fair”, and “equal” may be a major cause of the long-lasting “stagnancy” of the Japanese economy, we should squarely address the problem.
