Measures to Combat A Shrinking Workforce

On 24 September 2015, Prime Minister Shinzo Abe fired off what he called the "three new arrows" of Abenomics: promotion of economic growth, child-rearing assistance to push up the low birth rate, and social security measures to increase nursing facilities for the elderly. 

Shortly thereafter, he announced a new policy: "ichi-oku so-katsuyaku shakai" ( literally "all 100 million taking active parts in society") or "promoting dynamic engagement of all citizens" as translated by the English media.  The policy aims to promote a society whereby every one of Japan's 100 million citizens including children, women and the elderly, can contribute to the family, the community and the workplace.  This includes making the workplace a friendlier place for working mothers.

A year and a half down the track, let's take a look at some of the reforms that have taken place as well as the further reforms being proposed to combat Japan's shrinking workforce. 

Childcare and Family Care Leave Law

Traditionally in Japan, the burden of childcare and family care falls on the shoulders of the wives and daughters in the family.  Many women leave the workforce in order to attend to these duties.  One of Prime Minister Shinzo Abe's priorities has been to encourage these women to rejoin the workforce and to discourage female workers from leaving it. 

The Childcare and Family Care Leave Law has recently been amended to make it easier for workers to take childcare and family care leave and to help more workers back into the labour market afterwards by allowing more flexibility in the system. 

On 24 September 2015, Prime Minister Shinzo Abe fired off what he called the "three new arrows" of Abenomics: promotion of economic growth, child-rearing assistance to push up the low birth rate, and social security measures to increase nursing facilities for the elderly. 

Shortly thereafter, he announced a new policy: "ichi-oku so-katsuyaku shakai" ( literally "all 100 million taking active parts in society") or "promoting dynamic engagement of all citizens" as translated by the English media.  The policy aims to promote a society whereby every one of Japan's 100 million citizens including children, women and the elderly, can contribute to the family, the community and the workplace.  This includes making the workplace a friendlier place for working mothers.

A year and a half down the track, let's take a look at some of the reforms that have taken place as well as the further reforms being proposed to combat Japan's shrinking workforce. 

Childcare and Family Care Leave Law

Traditionally in Japan, the burden of childcare and family care falls on the shoulders of the wives and daughters in the family.  Many women leave the workforce in order to attend to these duties.  One of Prime Minister Shinzo Abe's priorities has been to encourage these women to rejoin the workforce and to discourage female workers from leaving it. 

The Childcare and Family Care Leave Law has recently been amended to make it easier for workers to take childcare and family care leave and to help more workers back into the labour market afterwards by allowing more flexibility in the system. 
 
Childcare Leave

	Before 1 January 2017	After 1 January 2017
1.    Fixed-term employees eligible for childcare leave	2.    A fixed-term employee had to meet the following conditions to be eligible for childcare leave: 3.      (i)            The employee had been with the company for at least one year; (ii)           The employment relationship between the employee and the company was expected to continue after the child reached one year of age; and (iii)          It was not clearly anticipated that the employee's employment agreement would expire and not be renewed on or before the child reached two years of age. 4.	5.    The conditions that a fixed-term employee must meet to be eligible for childcare leave have been simplified and relaxed: 6.      (i)            The employee has been with the company for at least one year; and (ii)           It is not clearly anticipated that the employee's employment agreement will expire and not be renewed on or before the child reaches one year and six months of age. 7.
8.    Children for whom childcare leave can be requested 9.	10.  An employee's children and adopted children 11.	12.  This has been expanded to include children taken in by the employee for a trial period in preparation for adoption.  (In Japan, there is typically a trial period before a child can be formally adopted) 13.
14.  Time off for child sickness / injury	15.  Could only be taken in whole days.	16.  Can now be taken in half days.

 
Family Care Leave

	Before 1 January 2017	After 1 January 2017
Family Care leave	Could only be taken on a single occasion for up to 93 days.	Can now be taken in up to 3 instalments totalling 93 days per family member requiring care.
Fixed-term employees eligible for family care leave	17.  A fixed-term employee had to meet the following conditions to be eligible for family care leave: 18.    (i)            The employee had been with the company for at least one year; (ii)           The employment relationship between the employee and the company was expected to continue beyond the 93rd day after the day on which the leave was to commence; and (iii)          It was not clearly anticipated that the employee's employment agreement would expire and not be renewed on or before the day falling one year after the 93rd day.	The conditions that a fixed-term employee must meet to be eligible for family care leave have been simplified and relaxed: (i)            The employee has been with the company for at least one year; and (ii)           It is not clearly anticipated that the employee's employment agreement will expire and not be renewed on or before the day falling six months after the 93rd day.
Family members for whom family care leave can be requested	(i)            Employee's spouse or domestic partner; (ii)           Employee's parents; (iii)          Employee's children; (iv)          Parents of the employee's spouse or domestic partner; and (v)           Employee's grandparents, siblings and grandchildren residing with and dependent on the employee.	An employee's grandparents, siblings and grandchildren no longer have to be residing with and dependent on the employee for the employee to take family care leave in respect of them.
Time off for family care	Could only be taken in whole days.	Can now be taken in half days.
Shortening prescribed working hours	The number of days that an employee worked shortened working hours for the purpose of family care would be taken away from the 93-day total that the employee could apply for family care leave.	An employee can now work shortened working hours for the purpose of family care for up to 93 days per family member requiring care, to be taken 2 or more times over a 3-year period starting from the date of the first application for shortened working hours, and this is now in addition to 93 days of family care leave per family member.
Exemption from overtime work	Not available.	Employees are now eligible to apply for an exemption from overtime work until the family care needs end.

 
Further reforms proposed to the Childcare and Family Care Leave Law

As mentioned above, traditionally it is the female workers who take childcare and family care leave.  However, the Government is considering introducing a new rule, starting from October 2017, that employers must encourage individual workers, particularly fathers, to take childcare leave.  The Government is aiming to lift the percentage of fathers taking childcare leave from 2.65% in 2015 to 13% by 2020.  This is seen as a move to ease the load off female workers and to enable female workers to ease back into their jobs after taking a period of maternity and childcare leave.

The legislative revision also aims to extend the maximum length of childcare leave to two years and introduce a new type of childcare leave for caring for children not yet in elementary school.

Highly skilled professional foreigners to be eligible for permanent resident status after 1 year in Japan
At the other end of the spectrum, the Government is also trying to encourage more highly skilled professional foreign workers to join the Japanese workforce.  Traditionally, Japan has very strict immigration laws that limit the number of foreigners in Japan.  An amendment to the law that allows highly skilled professional foreign workers to become eligible for permanent residency in Japan after staying as little as 1 year has come into effect since 26 April 2017.

As a general principle, foreign workers living in Japan under a valid work visa must have lived in Japan for at least 10 years before being eligible to apply for permanent residency.  A "points-based preferential treatment for highly skilled foreign professionals" system was introduced in 2012 to allow highly skilled individuals who could accrue 70 points based on factors such as academic background, work experience, professional qualifications, income and Japanese language skills to fast track their permanent residency eligibility to 5 years.  The latest amendment has reduced this to 3 years and has also introduced a 1-year fast track path for those reaching a score of 80 points.

It is too early to comment on whether Prime Minister Abe's policy of "promoting dynamic engagement of all citizens" is a success or failure.  What is clear though is that the traditionally conservative Government is now taking active steps to combat Japan's shrinking workforce.

Peter Godwin has extensive experience advising international companies on a range of employment matters. As Head of Dispute Resolution in Asia, he has particular expertise of advising clients on managing contentious cross-border employment matters and mitigating risk. Peter is consistently ranked in the top tier of independent legal directories for Employment and Disputes work, and is renowned for his strategic and commercial approach to complex and sensitive contentious employment matters. Peter advises various clients on their employment matters across a number of industry sectors including financial institutions, professional services firms, auto manufacturers, government entities and energy companies. 

Peter can be contacted on +81 3 5412 5412 or by email at peter.godwin@hsf.com