The Formation Process of Mutual-Trust-Based Industrial Relations in Japan

Chiaki Nagumo
2019 Japanese Research in Business History  
This study has examined, through the oral history method, with what kind of language and logic management officers and union officials persuaded negotiating partners and workers into the construction of mutual-trust-based industrial relations, presenting three case studies. The following three points have been revealed. (1) At Ishikawajima Heavy Industries and the NKK Kawasaki Steel Works, labor-management consultation bodies had been established in its' own thinking, at early stage. On the
more » ... y stage. On the other hand, the Tokyo Kinzoku Federation promoted a labor-management consultation system based on the basic principles of the Productivity Movement. (2) Ishikawajima Union tried to persuade its members into the construction of co-operative industrial relations, stressing workers' merits. Personnel and labor management officers at the NKK Kawasaki Steel Works had been sharing their survey data with workers and having discussions with them based on such data on the understanding that scientific data was objective information crucial for constructive discussion. (3) At small and medium-sized companies, not only trade unions but employers were distrustful to the Productivity Movement. Therefore, the Tokyo Kinzoku Federation had to persuade both sides. For that purpose, it provided occasions for education and discussion with regard to productivity improvement and the labor-management consultation system. Keyword: mutual-trust-based industrial relations, labor-management consultation bodies, Productivity Movement, logic of persuasion, oral history 51 Until recently, the following three points have been pointed out as the characteristics of the "Japanese-style employment system" in industrial relations textbooks: lifetime employment, the seniority wage system and company-based unions (for instance, Shirai 1978). 1 As factual investigations have proceeded, however, it has been revealed that lifetime employment is in fact a practice of long-term employment based on an implicit agreement that employees will not be dismissed until the retirement age unless some serious financial crisis occurs. In addition, the seniority wage system is, in practice, a regular pay raise system applied not only to white-collar but also to blue-collar workers (for instance, Yashiro 2014). This system provides incentives for employees to acquire firm specific skills. However, in order for this system to function, mutual trust between management and labor and implicit rules to prop the trust are indispensable (Shimanishi et al. 2012 ). In addition, company-based unions consisting of both blue-collar and white-collar workers and mutual-trust-based industrial relations suit each other. At work sites where technological innovations and productivity growth have taken place continually, company-based unions have helped flexible redeployment, secured long-term employment even for redundant workers and contributed to workers' skill improvements through a wide range of on-the-job training. Moreover, as exemplified by QC circles' activities, the Kaizen movement has spread among companies. Historically, the trade union movement had been very aggressive and bellicose until the early 1950s even in Japan. Then, co-operative industrial relations were formed gradually over the high economic growth period. It was during the period of stable growth after the oil crisis that such industrial relations became prevalent (Kikkawa 1998; Takeda 2004) . During the high economic growth period, large-scale employment adjustments were hardly implemented because of business growth and flexible workforce deployment. So, workers formed expectations for long-term employment. In addition, the Nihon Seisansei Honbu (Japan Productivity Center, hereafter) was established in 1955. With its "three productivity principles" -that is, "maintenance and expansion of employment," "cooperation and consultation between labor and management" and "fair distribution of results" -it promoted the introduction of a labor-management joint consultation system. As Figure 1 indicates, the number of industrial disputes was on an increasing trend until 1974. During the period, there were many cases in which disputes escalated into strike action, or factory closure, lasting more than twelve hours. Sometimes, moreover, large-scale industrial disputes of historical significance such as the Mitsui Miike Dispute broke out. After the oil crisis, however, the number of industrial disputes began to decline and large-scale disputes ceased to take place. That was a period in which the Japanese economy stagnated, and companies were forced to take employment adjustments including temporary transfer, temporary release from work and hiring freeze. The union side accepted the companies' wage restraint policy and, in many cases, consented to voluntary retirement programs on the understanding that the high rate of wage increase in the previous period was a factor putting pressure on companies' financial conditions. Consequently, the employment of regular employees at large-scale companies was ensured and mutualtrust-based industrial relations were reinforced (Takeda 2004). The above explains the formation process of mutual-trust-based industrial relations. Yet, such cooperation would not have been realized however much trade union leaders wanted it, had they failed to persuade both management and workers (union members) into it. Shimanishi et al. (2012) elucidate the role the Labor Department of the Japan Productivity Center played for the construction of the co-1 Moriguchi (2013) points out seven factors which characterize the Japanese-style labor management, maintaining that the pre-condition of such elements is "labor-management cooperation."
doi:10.5029/jrbh.36.50 fatcat:fjqh5i6alffgpi5zchintqmyge