Response and Evaluation to the Labor Contract Law Revision: Evidences from the RIETI web survey

Author Name TODA Akihito  (Recruit Works Institute) /TSURU Kotaro  (Faculty Fellow, RIETI)
Creation Date/NO. March 2014 14-P-004
Research Project Reform of Labor Market Institutions
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We investigate workers' responses to and evaluation of the change in the Labor Contract Act in 2013 through the result of a web survey conducted by the Research Institute of Economy, Trade and Industry (RIETI). The revised Labor Contract Act (i) stipulates that temporary workers, after five years of work, are allowed to ask employers for permanent status and employers must comply (five years rule), (ii) restricts the rejection of the extension of temporary contracts, and (iii) prohibits unbalanced treatment between permanent workers and temporary workers only due to the length of their contract periods.

The results show that around the half of the respondents do not know the effect of the revision, and, among the other half, the percentage of consent is more than that of non-consent toward each content of the revision. Considering the fact that some workers do not know the period of their contract, it is necessary to notify them of the contents of their labor contract. Regarding the five years rule, some temporary workers are afraid of their contracts being terminated before the end of their five years of employment with the company. Others have an opinion that they should not ask for permanent status after five years of work, which implies that policy should take care of the diversified opinions.