Job Security in relation to Japan and India - Assignment Example

Job Security in relation to Japan and Indi Table of Contents Introduction 2 Job Security in India 3 Job Security in Japan 5 Job Security- Comparison between India and Japan 8 Conclusion- concepts of convergence or divergence in industrial/employment relations 11 Reference 13 Bibliography 15 Introduction The project seeks to make a comparative analysis of the conditions of job security in India and Japan. For this purpose, the project studies the employment conditions in the two countries respectively. The employment laws prevailing in India are found to be protective towards the employees. The laws allow lay-offs or retrenchment of workers only with the permission of the government1. In spite of these efforts undertaken by the governments, the larger establishments in the nation began to demonstrate lesser demand for labour while the enterprises which were not covered by the legislations did not show any decline in labour demands. Looking at the labour conditions in Japan, it seems that the labour practices in Japan are distinctly different from the rest of the developing nations. Since the 1950s the labour markets in Japan has demonstrated a variety of distinctive features, the most noted of them all is ‘lifetime employment’. This practice is especially beneficial for workers as they are hired directly from schools and retained in the organization till the age of 55 years. The age has recently been revised to 60 years. The lifetime guarantee does not demand any contract to be signed by the worker and is estimated to cover more than one-third of the entire workforce. Instead of recruiting blue collar workers and managers at their mid-career levels, organizations prefer to promote their workers from within2. This illustrated the attempts made by the governments and organizations towards safeguarding the jobs of workers in both nations. However, the extent to which they have been successful would be explored in details in the present study. However, it must also be accepted that the external shocks which organizations are confronted with impacts employment levels considerably with the firms undertaking downsizing strategies and restructuring their employment policies. Job Security in India The industrial relations laws have always been shaped by the Indian Government. Some of the laws worth mentioning in this context are the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and Industrial Disputes Act, 1947. One of the distinctive features of the industrial relations law in India is that it does not provide any provision for the trade unions to be recognized as agents of collective bargaining. The mere registration of the union under TUA does not make an independent and legitimate representative of the workers in the organization. According to the industrial relations law, the government has a complete power to intervene in the disputes that arise in organizations. The laws clearly indicate high employment security for employees in the Indian organizations. As per the amendment of the Industrial Disputes Act, 1947, the polices of retrenchment, closures, layoffs were considered to be illegal if it had not been done on the basis of prior permission from the government for all organizations employing more 300 workers. In 1982, this coverage was extended to firms employing more than 100 workers. The permission for retrenchment or closures was granted in very few cases and even involved potential punishment in the form of large fines or even sentences for the employer3. According to the main points with regards to obtaining employment security in organizations; it is important to mention that employers are required to take permission from the government before retrenchments, lay-offs, closure or even the level of compensation that is mandatory for employees. The laws clearly indicate proper job security standards for the employees. This is the reason why the laws have been interpreted by employers as unreasonable restrictions which would pose serious threat to the economic viability of the enterprises. The allegation is that the law grants arbitrary powers to the government to dismiss their appeals. Thus it is highly difficult to terminate employees without proper and supportive evidence from his employment4. The biasness of the laws towards preserving the security of employees and workers has called for different strategies by employers to mitigate the impacts of the laws. In order to escape from the law, employers have been devising ways to farm out the regular productions to the outside sources. There has been an increasing tendency towards hiring labourers through contractors who supply the labour pool in the disguise of job contracts or contracts for services. Certain blatant methods have also come up where employers force their employees to change their names and reshuffle employments within the organization. These aspects have been active in shaking the position of workers even against the protective laws. Designations like trainees, learners and improvers have come up. The reason for continuously reshuffling the employees within the organizations is done for the purpose of making them unsuitable and keeping them from gaining the required eligibility in terms of the years of continuous employment needed to qualify for a job. These aspects have weakened the position of employees considerably and they are not in a position to seek the protective coverage of the law since they do not meet the requisite years of continuous experience employment in the organization. In the case of the white collar workers, the description of the job responsibilities and designations happen to be so confusing and so complicated and manipulated that they can be projected as exempt categories of employment in the organization. According to a unionist in a pharmaceutical company, the telephone operator was called as the communication officer and the accounts clerk was named as the payroll executive. The aspects like an attractive designation, a tie and a visiting card has been so attractive for the employees that they have lost out on their position of attainment of job security in organizations. There has been a dramatic shift of employment from the organised to the unorganized sector through the process of sub-contracting and other employment practices in which employees do not have a direct employment relationship with the organizations even though they might be working within the office premises. The above aspects have not only burdened the employees within lower salaries and poor working conditions but have taken away their job securities substantially. It is seen that although the labour regulations were generally intended to bring about labour welfares and improve their job securities, research indicates that the strict regulations have resulted in more number of closures, lower amount of investments, and lower outputs in the organized sector. Eventually the labour demand in the organized sector has reduced which has offset the bargaining power of workers in the sector. This has resulted in declining job securities and opportunities in the organized sector and an eventual expansion of the unorganised sector (see 3). Job Security in Japan Corporate restructuring and a rocky struggle has predominantly engaged the Japanese economy since 1990. This has been the prime factor behind the emergence of much speculation regarding the future pillars of Japanese management and employment. The major part of the attention has been focussing on the two pillars which are lifetime employment and senior plus merit in terms of promotions and wages, which is termed as ‘nenko”. However, the role of unions has been found to be undermined in this context. This is primarily because the stability of the industrial relations in the nation has secured a stable for the unions too and not confronted with much threat5. In Japan the terms of employment is generally found to be higher than most other nations. The government provides them with longer tenures in jobs which necessarily mean that their need to change employments is reduced considerably. One of the basic advantages of long term employment in terms of job securities is that it provides coverage for employees against the business cycle conditions fluctuations and external shocks. Instead of job hiring and firing the employee is required to work for longer hours as and when the conditions require6. The terms of employment by the organizations are also complimented with mandatory retirement schemes in which the average age of retirement is set at 60 years. Not only are the company based pensions provided during the time of retirement, the companies also have a program of re-employing retired employees on part time or full time basis. In addition to this the organizations also arrange for employment opportunities in subsidiary units for employees moving towards their retirement age. This throws enough light on the conditions of job security for employees in Japan. In Japan the academic year begins from April and ends in March which is also synchronized with the financial year. Since this is also the phase when the internal transfers take place, there is less insecurity among employees to lose their jobs. Most establishments allow internal mobility between different establishments which also proves an impetus for employees to find jobs of their suitable profiles. In other words such mobility allows greater job security for them. The Labour Union Act, 1949 in Japan empowers the trade unions of organizations in the nation with considerable powers to promote the status and well being of workers and taking them to a position of equal standing with their employers in terms of bargaining and defending their positions7. However, Japan has been demonstrating declining role of the trade unions. The rate of unionization of trade union activities has also been seeing a fall recently. Along with the decline in the number of manufacturing industries and the increase in the number of service industries the rate of unionization has fallen considerably. Furthermore the percentage of non-regular workforce has also been increasing and only 3 percent of this workforce account for the union strength. JILPT, which is a government policy institution, has indicated that the austere economic climate facing the organizations the trade unions have been facing difficulty in maintaining high wages. Thus the focus has now shifted from the formal polices to increase wages towards maintaining job securities. Thus it can be said that even though the wages remain at low levels due to the economic downturns, trade unions play an active role in maintaining job security of employees8. Under the Japanese law, although the general rule suggests that employers have the right to dismiss their employees, the court would consider the dismissal as an ‘abuse of rights’ if it is not supported by adequately acceptable reasons. The dismissal might be regarded as socially unacceptable in case it is not supported by proper reasons. Generally it is extremely difficult for employers to convince the courts that the employees’ performance was so poor that he had to be dismissed. Moreover in such case his performance would have to be well documented and elaborately illustrated that his performance was well below the minimum merit required for the position. Also the grounds on which the employees can be dismissed must be stipulated within the work rules of the organization. In such a position it can be said that an employees’ position of job security stands strong as per the Japanese employment laws. The government extends tremendous support towards protecting the jobs of employees which makes it increasingly difficult for employers to dismiss employees at their will9. The job securities of employees are further preserved through the fact that employers are bound to seek voluntary resignation from their employees before dismissing them. Although it is not a legal requirement, but employers might offer some amount of money for their employees to make them resign voluntarily. However, this involves high risks and the employer might get into trouble anytime. Even if the employer has been running at losses for long, it is difficult to dismiss employees as cost cutting strategies without producing acceptable grounds for the court to accept. Job Security- Comparison between India and Japan The labour law in India clearly indicates that they are immensely focussed towards the betterment of labour welfare and strengthening their job security in the organization. The main similarity between the labour legislations in the nations is the protective element in them towards attainment of job security and labour welfare. However, the difference lies in the fact that in India the restrictive laws has generated illegal practices by employers and weakened the position of the workers. However, in Japan the position of workers has been strengthened considerably. This has been predominantly possible because of the system of lifetime employment of workers introduced in the Japanese legislations. Not only does the law protect the employment of workers till they retire in the organization but also provides them with a secure position in the same. Also the economy does not demonstrate the generation of illegal or wrong practices by the employers. In fact the Japanese employers themselves have devised re-employment strategies for their employees on part time or even full time basis. Moreover, workers moving towards their age of retirement are also allowed to work in subsidiary units of the organizations. The above aspects throws light on the fact labour security is better and higher in Japan than in India. The facilities of internal mobility backed by the synchronization of the financial year with the academic year are some of the other factors which have been effective in strengthening the position of workers in Japan. The strict nature labour regulations in India has also generated and triggered the growth of the unorganized sector. On account of the nature of labour legislations in India the unorganized sector has emerged. However, the case in Japan is different. The organized sector does not suffer any threat on account of the biasness of labour legislations towards workers. That is why the unorganized sector works as an independent entity and does not show any kind of illegal practices10. The Japanese labours legislations are so protective that it does not give arise to employers resorting illegal standards. In fact workers who are employed in the non unionized sector are not likely to feel as if they are not protected by the courts. The labour legislations are framed in such a way that it is immensely difficult to remove a worker from his employment unless and until he is willing to do so. The Japanese culture has aimed to promote the social consensus that the dismissal of employees must be considered to be the last option for employers. The idea would be to develop a moral pressure on the employee with the consensus of other members in the organization to make hi resign voluntarily. Employees must be encouraged to quit rather than dismissed forcibly. This is found to be especially effective in Japan as the society is knit together completely11. The significance of union activities in the two nations is found to differ considerably. In Japan the unions are generally found to be organized along the enterprises. This has led to the accusation that they are extremely docile and are least representative of the employee’s interests12. However, the role of the unions in India is found to be much more active. The laws provide tremendous power over the unions as registered organizations representative of the employee’s interests and well being. In such a condition the worker’s bargaining power is found to immensely raised and strengthened. Their positions for job security are also strengthened considerably. Thus it can be said that even though the job security of workers is more in Japan, the role of unions are more active and effective in India than in Japan13. Conclusion- concepts of convergence or divergence in industrial/employment relations The labour legislations in India and Japan clearly depict possibilities of convergence. This is because of the fact that industrial relations in the Asian countries have emerged from similar circumstances which also bears resemblance with other developing countries of the world. Both the Japanese and the Indian economy have demonstrated a dualistic economic structure with an industrial sector and a small working class. The state has been the main dominating factor in the industrial sector in both nations. The role of trade unions shows a marked similarity in their approaches towards ensuring and securing safe position of the workers in the organized sector. However, it is imperative to say that the unions in India have been more effective and successful in doing so14. In both nations the governments have played active role in ensuring the security of workers in organizations. This gets reflected through the lifetime employment policies in Japan. Even though there is no such system present in the Indian labour legislations, the law makes it extremely difficult for Indian employers to dismiss their employees without strong and effective reasons. The convergence of the legislations in the two nations gets reflected through the fact that both legislations are biased towards employees and ensures to seek a secure and safe position for workers of the countries. The basic difference between the unions in two nations lie in their strength and position; however, their purpose are the same and attempts to secure the position and well being of workers in the organizations. The starkest similarity which appears between the legislations that shows that the legislations are convergent in nature is the fact that the state plays a dominant role in supervising the cases of workers dismissal from organizations. In very few cases, the courts have granted permission to dismiss workers from their employment easily. 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