Japan’s House of Representatives passed a bill last week that would revise its Worker Dispatch Law. Currently, the law imposes a three-year limit on the use of temporary workers, after which time the company must hire the worker on a permanent basis or terminate the contract — with the exception of 26 jobs requiring special skills, such as interpreters. The new bill would abolish that limit, but would also obligate staffing agencies to support the career enhancement of temporary workers by providing training and to work to transition them into permanent employment.
“The abolition of the three-year limit on the use of temporary workers is good news for staffing firms and buyers of contingent labor,” said Fiona Coombe, director of legal and regulatory research, Staffing Industry Analysts. “However the government also needs to address the regulations that make it difficult to terminate the contracts of permanent employees; otherwise this will worsen the effect of a two-tier workforce and increase labor segmentation, which is not good for the labor market as a whole.”
The bill now moves forward to House of Councillors. If ratified, it is expected to go into effect Sept. 1. It is seen as a victory for Prime Minister Shinzo Abe’s Liberal Democrat Party (LDP).
The Worker Dispatch Law came into effect in 1986, limiting the use of temporary employment for professions that require higher levels of expertise. The limit was mostly removed in 1999 and was further relaxed in 2004, in order to allow the manufacturing industry to hire temporary staff. Japan’s Health, Labour and Welfare Ministry recommended further relaxing the restrictions  in January 2014.