Historically, Japan has been slow to embrace temporary work. In the past, Japanese workers took up lifelong contracts with companies in exchange for long working hours and strong job security.
The rise of the use of non-regular - encompassing limited-term contracts, part-time work and temporary agency work, and dispatched work - stems from the transformation of Japan's labor markets in the economic boom of the 1980s, when employers began to hire interim workers to cut down on the vast personnel costs associated with traditional lifetime employment.
In 2009, the Ministry of Health, Labor and Welfare disclosed that non-regular accounted for approximately 34% of the entire labor market - more than double compared to 1984. Among non-regular workers, 6.2% is temporary dispatched workers, or 'haken workers', a figure that had tripled in the past ten years. The drastic increase was mainly the result of the deregulation of temporary dispatched work after the economic recession in the 1990s.
"Past revisions to the worker dispatch law have basically eased the regulations on the dispatched-worker industry to promote labor liquidity," an editorial in Asahi claimed.
However, the international economic downturn has had a dramatic effect on the Asian economy's temporary workforce. The government revealed last year that more than 180,000 non-regular employees were fired in the six months to March 2009 - and this form of employment also declined by 360,000 year-on-year in the final three months of last year.
Many companies have cut short-term jobs and hours to remain profitable in an economy struggling with deflation and a decline in exports. Although this has undoubtedly had a positive impact on Japan's overall unemployment rate - which was recorded at 4.9 per cent in January 2010 – questions have been raised about its social implications.
Unlike European countries, Japan does not fully protect atypical workers, whereas fulltime employees generally enjoy more opportunities of promotion, seasonal bonuses and other basic benefits such as unemployment insurance. Dispatched labor market members often become an easy target for exploitation and a market-controlled transaction item, according to the Haken Work Network:
"Japanese employers came to take workers only from the viewpoint of cost. We need a system to provide justice equally for all workers."
In December, the health and labor minister Akira Nagatsuma suggested Japan may ban manufacturers from hiring temporary dispatched workers with less than one year contract period in an effort to encourage employers to recruit more full-time employees.
This disclosure is the culmination of the Democratic Party of Japan's (DPJ) election pledge last summer that it would drastically reform the country's labor policies. Prime minister Yukio Hatoyama specifically criticized the practice of adjusting payroll size in line with production.
The investment firm Nomura issued a summary report into the temporary staffing services sector following the DPJ's election win last year. The organization predicted the new administration will aim to tighten regulation of the Japanese labor market by granting regular employee status to non-regular workers, establishing equal treatment for dispatched employees and by allowing temporary workers to notify their relevant enterprise after a fixed period that they are their employer.
And yet, these restrictions may bring about more problems than they solve, according to the research done by Reuters Japan in February 2010 – approximately 80% of large corporations in Japan said this regulatory change does not motivate them to employ more regular employees nor convert current non-regular to regular status. Several indicate they have the intention of employing seasonal workers directly in the short-term and allocate their production site overseas in longer-term solutions.
In a letter to Mr Nagatsuma, Ben Noteboom, CEO and chairman of the executive board of Randstad, the world's second largest HR services provider, explained that "temporary work is often an engine for job creation". Mr Noteboom highlighted that between 2003 and 2006 669,000 jobs were generated through non-regular agency employment, which is equivalent to 7.5% of total job creation.
He said: "Temporary dispatched work enhances and promotes the social acceptance of part-time and temporary work as a career option. In Europe temporary dispatched work is no longer seen as part of the problem - on the contrary, it is now perceived as part of the solution for a better functioning labor market."
The Randstad-FujiStaff research center has translated several research documents, such as the SEO-Randstad report Mind the Gap (2007) and Eurociett's More work opportunities for more people, into Japanese to illustrate the role of temporary work in the labor market.
Offering a potential solution to Japan's labor market problems, Mr Noteboom cited the European Union's flexicurity model, which sets minimum conditions for non-regular workers on pay and other social securities, while also maintaining the freedom for temporary agencies to operate.
This view is supported by Tsuru Kotaro, senior fellow at the Research Institute of Economy, Trade and Industry, who suggested that assigning blame on the dispatch services that place workers in temporary employment could exacerbate joblessness.
"In order to properly respond to the current situation, the government needs to develop both a short-term and long-term vision," he said.
"I would like to propose a Japanese version of the flexicurity approach that revolves around the following three words: security, training, and flexibility," he added.
The recession has raised many questions in Japan about the vulnerability of temporary workers and the viability of the government's labor policies. Japan in the next few months will decide whether the future development of agency work is of the utmost importance to a well functioning labor market.
