Ironic "equality" achieved by lowering benefits for full-time employees

The Supreme Court's high-profile ruling on equal pay for equal work legislation was handed down in October.

In a ruling in three cases (Tokyo, Osaka, Saga), the Supreme Court ruled that the working conditions of contract workers are different from those of full-time employees in five categories, including special work allowance and sick leave, as "unreasonable".

It was ordered that dependents' allowance, New Year's work allowance (special work allowance), holiday pay for the New Year's period, summer winter vacation (special leave), and paid sick leave be provided to non-permanent employees.

As for the benefits already determined by the Supreme Court in its 2018 ruling that "they must be paid to non-permanent employees," they include commuting allowances, full-time allowances, housing allowances, service rewards, and overtime premiums paid to full-time employees. 

As a result of these and other rulings by the Supreme Court, it is almost certain that non-regular employees will also be required to take advantage of the benefits, leave, and welfare programs paid to full-time employees.

The law on which this series of lawsuits was based is Article 20 of the Labor Contract Act, which prohibits working conditions that are found to be unreasonable, taking into account the differences between the working conditions of part-time and full-time employees, the nature of the job, the scope of the change in assignment, and other circumstances.

The Supreme Court's decision says that the individual nature of the benefits and "what the purpose of providing them is" should be examined, and then the differences in job duties and other factors should be taken into account.

It is unreasonable not to provide alimony to non-permanent employees, even if their duties are different from those of full-time employees, as long as their contracts are renewed and "they are expected to continue to work reasonably well", decision says.

In other words, in light of the purpose, "as long as the reality is the same, the company should pay, and it doesn't matter what the job description or the weight of the responsibility is.

As for the housing allowance, the company had appealed several High Court decisions ruling that it was unreasonable not to provide it to non-permanent employees, but the Supreme Court decided not to accept the appeal, and the "pay" by the High Court decision was confirmed.

In theory, it is reasonable to assume that the purpose of the allowance is to subsidize the cost of living, and in light of the "purpose" of subsidizing the cost of living, we conclude that the need is the same for non-regular employees, and that non-regular employees should be paid regardless of their job description.

The same logic applies to the granting of other benefits and vacations.

Many companies are now struggling with deteriorating business performance due to the corona disaster, and some may not be able to afford to increase the treatment of non-permanent employees.

A likely scenario would be a review of benefits for full-time employees to reduce or eliminate them. In other words, the move is an attempt to justify "equal pay" for equal work with non-permanent employees by eliminating benefits for full-time employees.

When it comes to the legislation of equal pay for equal work, which is part of the reform of the work style, the original goal of the country should have been to eliminate the disparity by raising the treatment of non-permanent employees in Japan, where the wage gap is larger than in Europe and the United States, and to create a virtuous circle in the economy by raising the wage level.
However, coupled with performance pressures from Corona, the "equal pay for equal work" legislation could become a negative legacy, depending on the future situation.