No.25,Jan.1999

Breakup and Privatization of Japan's Gigantic Railway
Company and Thoroughgoing Discrimination in
Employment in the New Companies

By Takao Miura

On April 1 1987, they privatized Japan National Railways (JNR) and divided it into six regional passenger companies and one nationwide freight company.

They carried out the breakup and privatization of the JNR on the ground that the corporation had accumulated deficits that amounted to some twenty-five trillion yens; that it had failed to cope with a rapid change taking place in the traffic system such as motorization, due to its unitary form of management and operation applied throughout the country.

They divided the JNR into six regional passenger companies and one nationwide freight company. In doing so, they handed over the JNR's assets and rolling stock as they were to the newly established companies. They also transferred trains without a moment's stop.

However, in relation to JNR employees, they enacted a law to once dismiss all the personnel and make a new contract.

Process of the Division and Privatization and inconsistencies during twelve years Contradictions Surfaced Twelve Years Later

1. The JNR had a history of 116 years. After the Second World War, it played an important role in the nation's recovering from the war damage by transporting "people and goods." In 1950 it made up 59 percent of Japan's total volume of passenger traffic (the number of people / kilometers.) As for freight traffic (tonnage / kilometers) it shared 50 percent.
   
   But as they pushed ahead with the policy to promote the car industry and road construction, road traffic made a rapid increase. In 1987, the JNR's passenger transport volume decreased to 22 percent of the total, and its freight traffic also dropped to 4.5 percent.
   
   In 1959, construction work on Tokaido Shinkansen (bullet trains) Line started. The JNR raised the construction fund on borrowed money. Shinkansen service has expanded to include Sanyou, Tohoku, and Joetsu Lines. Due to the decrease in transport volume and steep rises in plant and equipment investment, the JNR's debt jumped up to some twenty-five trillion yens. Saying that in such circumstances the State could not run the JNR on its own account any more, the government decided to privatize the corporation.
   
   
2. Twelve years have passed since the JNR's "breakup and privatization." Following is the present situation:
   (1) Tokyo, Nagoya and Osaka are Japan's three major cities. These three cities with their large population are the center of Japan's economy. They set up three regional passenger companies that covered these three major cities: East Japan Railway Co., Central Japan Railway Co., and West Japan Railway Co. (JRs.) Their annual ordinary profits amount to some two hundred billion yens.
   
   Passenger-railway stations are the places that have the biggest traffic among other places in the city. Each JR has made use of this favorable geographical condition to expand its commercial service industry such as running hotels and restaurants. The three JRs aim to gain more profits from it.
   
   (2) Railway companies (JR) in three islands, namely, Hokkaido, Shikoku and Kyushu faced difficulties in management from the very beginning due to the development of road traffic and decrease in population. This is why the Japanese government invested 1,200 billion yens to set up a fund for stable management. They put 18 percent of the fund's profit into running the companies. This did not solve the financial difficulties, and in 1996 they raised train fares by seven to 18 percent.
   
   (3) The Japan Freight Railway Co. forms a nationwide traffic network, but it does not possess track, so it rents track from other railway companies to run freight trains. It pays about 20 billion yens a year for the rental charge. This amount makes up more than 10 percent of the company's annual income.
   
   (4) The JNR's "breakup and privatization" have resulted in creating three companies on Japan's main land with big profits on one hand, and three island companies and one freight company in financial difficulties on the other. All these companies give top priority to the market mechanism in their management, and adopt a policy of reducing cost through cutting personnel. Consequently the number of staff who is supposed to protect safety and service is decreasing.

Attacks by Dismissing 90,000 Employees and Dividing Workers

Now I would like to refer to the fact that the "breakup and privatization" led to a massive dismissal of workers.

On the ground that the personnel expenses suppress the finance, the company authorities have carried out management improvement plans several times. In 1986, the JNR had some 290,000 workers. From 1986 to 1987 about 90,000 workers including retired employees left the JNR. In April 1987, the privatized JRs started operating with some 200,000 workers.

Then trade unions existed, which opposed the "breakup and privatization" policy, saying that it would deprive the population of their means of transportation, and that it would mean selling out of the Japanese people's common property.

In 1982, the National Railway Workers' Union (Kokuro), Nihon National Railway Motive Power Union (Doro), All Japan Facility Workers' Union (Zenshiro) and Japan National Railway Locomotive Engineers' Union (Zendoro) stood up in the struggle against the "breakup and privatization" policy. The Railway Workers' Union (Tetsuro) was the only union that supported the policy.

However, as the JNR authorities gave favorable treatment to the trade unions that supported the "breakup and privatization" of the corporation, by securing employment and better labor conditions, all the unions except Kokuro and Zendoro turned round to support the "breakup and privatization."

Doro, Tetsuro and Zenshiro formed the "Union Council on the JNR Reform" and started to cooperate with the JNR authorities in promoting the corporation's "breakup and privatization." They launched attacks on Kokuro and Zendoro members. With the aim of getting the members to leave these unions, they set up nearly eighty new unions. Some workers, who suffered so much and felt distressed by such attacks, even committed suicide.

In 1986, Kokuro had a membership of 160,000 and Zendoro, 2,400. But in April 1987, Kokuro's membership decreased to 35,000 and Zendoro had only 1,400 members. The cause of the decrease was that the authorities carried out propaganda that the newly established companies would refuse to employ Kokuro and Zendoro members. In April 1987, 7,400 workers were left unemployed by the new companies. They sent these workers to the JNR Settlement Corporation for three years. The Settlement Corporation formally helped workers find their jobs again, and about 6,300 workers changed theirs. In April 1990, the Settlement Corporation dismissed 1,047 workers including 965 Kokuro and 63 Zendoro members.

Growth of the Struggle against Discrimination in Employment

The JNR's "breakup and privatization" policy had a secret objective: to make use of it to exclude the opposition forces, that is, Kokuro and Zendoro members, from the recommendation list on the employment to the new companies. This was taken up in the deliberations in the Diet, when they discussed the bill on the privatization of the JNR. The government said that it would not allow any worker left jobless. The Diet adopted a resolution declaring that workers' affiliation to the union would not be the reason for discrimination in employment.

However, the employment ratio of the Hokkaido JR shows that only 28 percent of Zendoro and 48 percent of Kokuro members were employed, while 99 percent of the Union Council on the JNR Reform were employed. The company employed all those who had withdrawn from Zendoro.

Yasuhiro Nakasone who was the prime minister at that time clearly stated in an article of the weekly magazine AERA of December 30 1996 that the aim of breakup and privatization of the JNR was to weaken the JNR's trade union movement.

1,047 workers who were not employed by the JRs claimed relief measures to the Labor Relations Commission, saying that their exclusion from the employment list was unfair labor practice. District Labor Relations Commissions all over the country as well as the Central Labor Relations Commission concluded that there had been unfair labor practice and the JRs were responsible for it. The commissions then ordered JRs to reinstate those workers. The JRs, however, rejected this order insisting that they had no legal responsibility for the problem, and filed an administrative suit calling for the order to be rescinded.

On May 26, 1998, the Tokyo District Court gave an unfair decision to overturn the CLRC order. This decision has met criticism from the Labor Law Society and mass media. The case of Zendoro is still on trial in the Tokyo District Court.

In December 1998, Zendoro filed a complaint with the ILO based on Article 24 of the ILO Charter. Zendoro pointed out that the JRs violated the ILO Convention Nos. 87 and 98, and called on the ILO to advise the Japanese government to take steps to end the discrimination against its members. The ILO has already accepted Zendoro's complaint.

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President of the Japan National Railway Locomotive Engineer's Union(NEU)

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Attacks of Streamlining Carried Forward in the Major
Electrical Companies　and Workers'
Struggle against Them

By Morio Nakayama

Workshops of Japan's electrical equipment manufacturers such as Hitachi　Ltd., Matsushita Electric Industrial Co., Ltd. and NEC Corp. have enterprise　unions organized based on the union shop system. These unions form the　Japanese Electrical Electronic & Information Union, which is affiliated with　the Japanese Trade Union Confederation (Rengo.) Now the JEEIU has the　membership of some 800,000.The JEEIU's action policy is based on the "harmonious labor relations," so that they frequently give precedence to　companies' interests over union members'. They decide on wages, working hours and other principal labor condition in the annual "Spring Struggle." Until 1970's, they fought the "Spring Struggle" by going on strike and other measures, but since 1976 it has become usual that they accept in a single negotiating round the company-proposed low increase in wage without going on strike.

Globalization and Attacks through "Restructuring" Promoting Reduction in Employment and Wages of Electrical Workers

Globalization is the first factor that characterizes the management strategy of electrical machinery companies. They are advancing into Asian countries in search of cheap labor force. This has led to the reduction in domestic electrical workforces. In 1992 electrical workers totaled 2.46 million, but by 1996 the number had decreased by 200,000 reaching to 2.28 million. On the other hand, the number of workers employed by Japanese electrical companies overseas increased by more than 400,000 in the same period, from 820,000 to 1.26 million.

The "scrap and build" method is the second characteristic of the strategy. Electrical machinery companies, particularly those called general electrical equipment manufactures such as Hitachi and Toshiba, have expanded themselves into all fields to produce "from light bulbs to nuclear power." During "bubble economy," they expanded their production facilities and made enormous profits. These surplus production facilities and the stagnation in demand are now major cause of the worsening business conditions of electrical equipment manufactures and the serious economic recession facing Japan. Under such circumstances electrical equipment manufactures are pushing ahead with "restructuring" to gain as huge profit as possible. The main measures they use for this are transforming of production section into subsidiaries and abandoning of subcontractors. This has caused great damage to workers and local economy.

Thirdly, the strategy is also featured by the cut in the "total personnel expenses." This is the biggest task now for electrical equipment manufactures and they are putting most of their energy into it. If they separate the business section converting it into a new company, workers' wages of the newly established company will be 30 percent down compared to that of the parent company (according to the case of Hitachi.) Workers of the parent company would be transferred to the separated company for a definite period (one to three years) according to their age, with their salary guaranteed a hundred percent. But afterwards they would retire from the parent company to be employed by the separated one, where they would have to work under poor working conditions. Companies have also increased the employment of dispatched workers and part timers, while reducing the number of new recruitment. The merits of hiring such workers for the companies are: their wages are lower than those of regular workers; and the companies can employ them as the production increases and end the contract when the production decreases.

Big Wage Differentials between Workers of the Same Age And Between Men and Women Workers

Wages of workers in electrical industry are at a low level, below average of the whole manufacturing industries. Companies intend to further reduce such low wages. Just like the case of other workers in Japan, workers in electrical equipment manufactures are paid based on seniority. Since 1960, companies started to take into account workers' job evaluation and ability for their wages. However, in the past few years the seniority-based portion of the wages has been cut down, while in turn the ability-based portion being increased. This has resulted in the reduction in the wage increase for those of more than forty, especially those in the fifties. Wage gaps between workers of the same age have also widened. To take the example of forty-year-old, regular workers who graduated from senior high school, at Hitachi Ltd., the highest wage is \360,000 a month, while the lowest is \240,000. Such a huge gap comes from the "company's assessment" of workers' achievements, but the assessment is arbitrary because the company does not make public the objective standards for it. This has become one cause of the "voluntary" intensification of labor, and overtime work without payment, which I will mention later. Wage differentials between men and women are also big, as the case of Toshiba shows that for thirty-five-year-old, senior high school graduate men workers the company pays \280,000 a month on the average, while only \230,000 for women workers of the same age and career as men.

Actual working hours of major companies are seven hours and forty-five minutes (the total hours spent at work are eight hours and forty-five minutes including one-hour lunch break.) In these thirty years they have shorten working hours only by fifteen minutes. On the other hand the average monthly overtime work amounts to twenty hours, and 15 percent of the workers work overtime more than forty hours. Long hour working has become usual, especially in workplaces of technological development. Another big and even serious problem is that gratuitous work is now widespread and does not appear in any statistics. That is to say, workers work overtime but cannot claim for it. In our JELC investigation reveals that 20 percent of those who work overtime do not receive payment. Such overtime work without payment is the result of the system many companies apply: companies in their production plan would set the overtime work hours less than the actual hours and would not recognize the surplus hours as overtime work. Recently Sharp Corporation declared no overtime work, but actually workers work overtime and all that has been gained from it goes into the company's pocket.

The JEEIU Deepens Subordination to the Company

It is the Japanese Electrical Electronic & Information Union (JEEIU) who is largely responsible for the worsening conditions of workers in the electrical machinery industry. Many of trade unions affiliated with the JEEIU organize regular workers. However, in their workplaces, the number of part-timers, leased workers and other types of non-regular workers who are not union members, is increasing. In some workplaces, half the workers are non-regular employees. The emergence of these workers with poor working conditions has led to the deterioration in working conditions of the whole workers in the workplace.

Being enterprise union, the JEEIU is obliged to serve the interests of the company. The subordination has deepened even more conspicuously under the present depression. In the 1998 JEEIU regular convention adopted a "new system of employment and treatment." The decision's main point is that it proposes to accept "fluidity" in employment. This would cater to what the companies want to promote: disposal of the middle-aged and elderly workers and the increase of irregular workers. As regard to wages, the JEEIU advocates achievement-based wage system. Achievement will be assessed according to how much workers have contributed to the company. This would also help the company push forward the cut in personnel expenses and the intensification of labor. Such changes taking place in working conditions in individual companies concur with the adverse revision of the Labor Standards Law and the Worker-dispatching Law carried out by the State.

Trade unions' subordination to the companies is due to the company's labor control policies. From 1960 to the middle of the 1970's, electrical workers were very active in the struggle and they went on strike to realize their demands. Then companies introduced wages based on job evaluation and ability. By this, they established a system that workers would achieve more wage hikes by serving individually to the company to be evaluated high, than by fighting to increase the wage level of the whole workers. At the same time, companies started to intervene in the union officers' election to get the union to subordinate the company. Such an intervention constitutes unfair labor practice and is against the law, but has become usual practice in most of the companies. This has resulted in those workers who would act at the mercy of the company being elected to the union leadership.

Fighting Workers of Electrical Industry Develops Solidarity Nationwide to Form "Japan Electrical Labor Conference"

In defiance of the company's domination over workers and the trade union's reluctance to fight, electrical industry workers carry forward the struggle to defend their life.

A great majority of workers are now aware that the present trade unions side not with workers but with the companies. Many workers think it is necessary to take the trade unions back in their hand. In 1988, workers of electrical equipment manufactures voluntarily got together from all over the country to strengthen their trade unions and set up a "Japan Electrical Labor Conference" (JELC.) The move was encouraged with the inauguration of the National Confederation of Trade Unions (Zenroren). The JELC has its members in major electrical machinery manufactures such as Hitachi, Toshiba and Matsushita. The JELC works on 1) promoting exchange of information centered on the publication of a monthly magazine "ELIC (Electric Labor and Industry Correspondence) with a circulation of 5,000; 2) strengthening union activities to improve labor conditions; and 3) supporting labor disputes concerning dismissal and discrimination. At the time of Spring Struggle, the JELC carries out questionnaires in workplaces throughout the country to get the results reflected the union's proposals on workers' demands and made use of in the struggle.

In the face of the above-mentioned attacks of restructuring, the JELC strives to encourage trade unions and workers to fight against them. The JELC is strengthening to fight together with these workers. Through these efforts the JELC has succeeded in getting the number of workers who are intended transferring to the subsidiary company reduced, in holding down the deterioration of working conditions, and in making the mandatory retirement age for part-timers raise.

The JELC has also tackled the tasks that enterprise unions do not take up in the struggle any more. For example, it has succeeded in getting the company to stop forcing workers to work on foot (by taking their chairs away -- this is one of the measures used in the so called just-in-time system) or to pay for overtime work. What made possible for the JELC to achieve these successes is that workers concerned stood up in the struggle with the support of the JELC members and with the cooperation of Zenroren, local centers and militant trade unions in the region. Further, to strengthen solidarity with workers in other countries, the JELC has invited electrical workers from Malaysia, or organized a solidarity tour abroad.

Companies carry out attacks in various forms against workers. For example, they discriminate militant workers from others. Some workers have brought their cases to the court or Labor Relations Commission. Let me cite the case of Mr. Hideyuki Tanaka, a worker at Hitachi's Musashi plant who is a leading activist in defending the rights of temporary workers. The company fired him because he for once refused to work overtime. Over thirty years he has continued his legal battle against the company demanding the withdrawal of dismissal and return to the workplace.

Electrical workers and their trade unions are facing drastic changes at present. First, companies have intensified their attacks and workers are now subjected to substantial dismissal. In such situation, workers cannot but counter the attacks. Second, growing criticism against the bad politics of the Liberal Democratic Party and the advance of the Japanese Communist Party have broken away the conditions for the anti-communist labor control, which used to be prevalent in workplaces. As a result, they have created an atmosphere in the workplace that workers can express opinions freely, and they have improved their right to present demands. In the union officers' election too, the number of votes cast for the candidates who suit the fancy of the company decreases. Convinced by such changes, the JELC members are determined and ready to strive for converting trade unions into ones that defend workers' interests. We also work hard in solidarity with Zenroren to achieve peace and democracy in Japan and improved living conditions for workers.

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Secretary General of the Japan Electrical Labor Conference (JELC)

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Japan Center for Health and Safety of Working People Established

On the initiative of Zenroren (National Confederation of Trade Unions), the Japan Center for Health and Safety of Working People, JCHS) was set up on December 15, 1998. On the dissolution of Sohyo (the General Council of Trade Unions of Japan), they also closed down the Japan Center for Safety of Workers, an organization established under the influence of Sohyo, It is nine years now since Japan lost a national organization to protect workers' life and health.

Under such circumstances, workers and trade unions, along with doctors, medical scientists, lawyers and specialists of various fields, have persistently carried on the struggle to get workers' death from overwork recognized as labor accident and compensation paid for labor accidents. In this struggle, they have achieved certain success. In workplaces, workers' deaths on active service from cerebrovascular disease and ischemic heart disease due to excessive heavy labor are increasing.

Specialists say that every year more than 10,000 workers die of overwork. What is worse, a new feature has arisen about death from overwork. Amid the intense "streamlining" through a workforce reduction and strict quota imposed upon workers by major companies under the prolonged economic recession starting with the collapse of the "bubble economy," suicide due to overwork, that is, workers kill themselves suffering from depression induced by extreme mental exhaustion from excessive labor.

The Survey on State of Employees' Health published by the Ministry of Labor in June 1998 (it conducts the survey every five years) shows that 72.0 percent of the workers complained that they are "physically tired" from the ordinary work (64.6 percent in the previous survey,) 74.5 percent said they were "mentally tired" from the dairy work (70.1 percent in the previous survey,) 62.8 percent said that they felt "strong anxiety, distress and stress" about their job and working life (57.3 percent in the previous survey.) On the question how often they felt that they had not recovered from the fatigue from work on the previous day, 42.7 percent of　the workers answered "sometimes"; 11.3 percent, "very often"; and 4.4　percent, "always," the total figures amounted to about 60 percent of all.　These data clearly showed that workers' labor conditions are becoming　worse than ever.

Since 1996, the Zenroren has redoubled its efforts to establish a national　center to apply the brakes to the tendency of workers' mental and physical　stress steady to increase, and to protect their life and health. This is how the JCHS was set up this time. It will work on:

1) Collection and provision of related materials, publicity and publication of organ paper and bulletin;

2) Study, education, and survey, making proposals, advice and demands on better policies and improved system;

3) Exchange of movement, relief activities and consultation;

4) Efforts to improve related legal system and to achieve democratic operation of the administrative system;

5) Communication, cooperation and joint efforts with organizations and specialists concerned;

6) Communication, exchange of information and cooperation with overseas organizations concerned;

7) Other necessary efforts to achieve the JCHS's objectives.

Rodo Soken had participated in the preparations for establishing the center, and its standing board has decided to join the center as a supporting member organization and continue cooperating with the center in its activities. The JCHS inaugural meeting elected Shinya Yamada (Rodo Soken member, medical scientist and professor emeritus of Nagoya University) as general director along with Migiwa Hosokawa (former professor of Kyoto Prefectural University of Medicine) and Shinya Watanabe (professor emeritus of Shiga University of Medical Science) as advisers.