Volume 6 | Issue 11 | Number 0 | Nov 01, 2008
The Asia-Pacific Journal | Japan Focus
The Development and Structure of Japanese Enterprise Unions
John Benson
Trade union history and development
The Development and Structure of Japanese
Enterprise Unions
The rapid industrialization and economic growth
John Benson
that occurred after the Meiji Restoration in 1868
The major reason for writing a paper on Japanese
labour and led to a severe shortage of skilled
transformed many feudal workers to wage
workers. These conditions encouraged the
unionism is that much of the debate assessing
formation of trade unions, although the reservoir
Japanese enterprise unions was set in the
of cheap agricultural labour meant that it would
pre-1990s period when the economy was strong
be some years before a viable union movement
and there was a shortage of skilled labour. Thus,
would emerge. In these early years attempts by
whilst some commentators argued that Japanese
workers to win improvements in wages, benefits
enterprise unions were little more than an arm of
and working conditions by engaging in strike
management, [1] it was difficult to refute the
action frequently met with strong opposition
argument that this form of unionism had resulted
from employers and the government.
in real wage and benefit increases for a
considerable period of time whilst generally
Despite numerous attempts to form unions
ensuring a high level of job security for large
during the 1880s and 1890s, labour remained
numbers of workers. [2] Over the past 15 years or
largely unorganized until the end of World War
so a different economic context has arisen where
I. After this time the trade union movement
wage gains have been harder for unions to
began to develop, although union membership
achieve, where unemployment and irregular
advanced slowly. A number of large-scale strikes
employment have increased, and where
occurred in the 1920s and in the early 1930s. By
globalization has made the market for Japanese
this time over 800 unions had been established,
goods highly competitive. It is time to provide a
although they had recruited less than 10 per cent
more contemporary assessment of this form of
of the workforce. [3] Whilst the majority of
union organization.
unions were organized along industrial or craft
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lines, about one-third of all unions were
alternative mechanisms to improve their wages
organized on an enterprise basis. [4]
and working conditions.
By the mid-1930s, in an attempt to contain strike
Union types and structure
activity and the growing union movement, the
government dissolved all trade unions and
Since the 1950s, over 80 per cent of union
absorbed them into the Industrial Association for
members have been part of an enterprise union
Serving the Nation. The aim of this organization
which has exclusive representation within the
was to control radical elements in the workforce
company, although in some companies a weaker,
and was part of a general crackdown on worker
second enterprise union or industrial-type union
opposition to employers or government. [5] At
also existed. [9]. Nevertheless, most unionized
the enterprise level this body filled the vacuum
enterprises have only one union representing
left by unions and served as a defacto local
employees [10] and this type of union accounts
bargaining mechanism and an employee welfare
for over 95 per cent of all unions. [11] Local
system. [6]
unions may also be formed within the individual
plants of the enterprise, although they are
Following World War II, under US occupation
directly linked to the enterprise union. This
and a new constitution, trade union membership
enterprise-based structure meant that unions
grew rapidly and major industrial action, led by
tended to be found in the larger companies and
industrial
government agencies where organising large
unions,
commenced
almost
immediately. [7] Strikes in the early post-war
numbers of employees was possible.
years were often short and peacefully settled, but
over time they increasingly met stronger
The enterprise structure of Japanese unionism
resistance from employers. Militant industrial
has meant that the major objectives of these
union activists were dismissed and employers
unions have been the pursuit of economic goals
pressed for a more cooperative, enterprise-based
such as job security, increased wages and
union structure. While such unions had existed
improved working conditions; goals that have
earlier, they were now strongly supported by
been traditionally pursued through collective
management in terms of recognition and
bargaining. These goals and the enterprise
provision of facilities. [8] Workers were generally
structure of unions are consistent with the
willing to accept this form of unionism as they
economic activities of companies [12] and can
were not included in the emerging broader social
thus be broadly classified as business unionism.
partnership arrangements and so had few
This form of unionism can be contrasted to
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social-democratic and revolutionary types of
50 industrial union federations. The present day
unions where unions seek a wider role in society
Rengo was formed from an amalgamation in
or oppose antagonistic class interests. By
1989 of the private sector Rengo and unions
adopting such a structure Japanese unions have
belonging to three public sector peak union
been able to maintain a high degree of
bodies. Rengo itself was the product of a merger
independence from the state and have not
in 1987 of unions belonging to five private sector
generally sought corporatist type arrangements
peak union bodies. [16] The amalgamations have
from any of the major political parties. They
taken place as part of an effort to unite the union
have, by contrast, sought and encouraged
movement after many years of division, to
cooperative arrangements with employers as part
provide a single union voice, and to increase
of their broader market-based strategies.
trade union membership. Total unity has not
been achieved, however, and two other smaller
Most full-time, regular workers in a company are
peak union bodies have emerged.
eligible to join the union and this includes front
line supervisors and usually managers up to the
level of subsection head. [13] Until recently,
The number of unions in Japan in 2006 stood at
union membership did not normally extend to
59,019, a decline of over 18 per cent from 1990
part-time employees, many of whom are women.
and 21 per cent from the record number of 74,579
Thus the typical union member in a Japanese
unions that existed in 1984. At this time the total
enterprise union is a full-time male employee
number of union members was 10,041,000 which
and the organizing policies of enterprise unions
represented a decline in membership of 18 per
have served to protect this core group of male
cent from 1990 and 21 per cent from the record
workers. Union officials are drawn almost
membership of 12,699,000 in 1994. This
exclusively from the membership, with some
represented a union density (number of union
senior officials on leave from the company and
members as a percentage of the total workforce)
working full-time for the union. [14]
of just over 18 per cent which is down
significantly from the 25 per cent of workers who
Enterprise unions normally belong to an
were members in 1990 and the peak density of
industrial federation which, in turn, will be
55.8 per cent in 1949. Similarly, all three peak
affiliated to a more general peak union
bodies have lost members in recent years [17].
organization. [15] The major national peak union
federation is the Japanese Trade Union
The fall in union membership and density is
Confederation (Rengo), which is made up of over
graphically illustrated in the chart below.
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firms within the corporate group, [18] while
others have allowed members transferred to
subsidiaries to maintain their union membership
and about a third of all unions have allowed
temporary employees to join. [19] Industrial
union federations have also sought to halt the
declining membership by merging with other
industrial unions and by setting up occupational
type trade unions, unions for agency workers
and more general community type unions. [20]
Rengo has also established ‘regional unions’
where part-time workers can join as individual
members . [21]
What do Japanese unions do?
Declining Trade Union numbers and density, 2000-2006
Source: www.eurofound.europa.eu/. ../tn0706028s_1.htm
The loss of members has sparked a number of
activities at all levels of Japanese unionism. At
the enterprise level, some unions have sought to
Increases in non-regular and part-time workers, 1990-2005
expand their membership by recruiting more
Source: OECD Economic Survey of Japan 2006
women, part-time workers and managers, as well
as workers in subsidiary and subcontracting
Japanese enterprise unions have traditionally
companies. This strategy was seen as essential if
placed strong reliance on collective bargaining at
unions were to maintain membership in the
both the company and industry levels. Collective
wake of an increasing percentage of workers
bargaining is an appropriate mechanism for this
employed on a part-time or temporary basis (see
form of unionism as the key objectives of
graph below). In a small number of cases,
economic rewards and welfare benefits can be
enterprise unions have also extended their
achieved by trading off aspects of work such as
coverage to take in workers from other related
job control, work rigidities and the introduction
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of new work forms and technology.
influence of union federations and that the wage
Underpinning this bargaining has been a tacit
settlements were based on macro-economic
understanding that employment security was
conditions as much as enterprise considerations.
guaranteed. [22] This has led to a dual set of
[25]
employment conditions where workers in
unionised enterprises enjoy ’lifetime
This system remained intact for the next four
employment’ and superior working conditions
decades and was able to deliver real wage and
while their counterparts in non-unionised
benefit increases for most union members, as
enterprises are subjected to the vagaries of the
well as the working population in general.
market.
During the 1990s, with the bursting of the bubble
and the economy experiencing very low growth
Collective bargaining in Japan over wages and
rates and increasing global competition, wage
other monetary conditions developed a unique
settlements became more diverse and local
form in the 1950s. Groups of unions would lodge
enterprise considerations more important. By the
their wage demands and if these were not met
late-1990s the prolonged period of economic
would simultaneously stage repeated, short
downturn led many employers and some unions
industrial actions. This system became known as
to question the relevance of this multi-employer
the spring wage offensive or 'shunto' and led to a
approach [26] and in 2002 Japanese unions were
system of industry and national level
prepared to accept the end of 'shunto' as the
coordination of enterprise wages. [23] Such a
major wage fixing mechanism. [27] The concept
coordinated system was important from the
of a socially acceptable wage has now essentially
perspective of capital as enterprises where strike
disappeared from the Japanese system of wage
action was taking place would not lose market
determination. [28]
share to their competitors and, as the industrial
action was short, it would not threaten the
The demise of 'shunto' meant that the collective
viability of the company. [24] Claims were thus
determination of wages and working conditions
formulated at the industry and national level,
moved to a more enterprise-based system. [29]
with collective bargaining taking place at the
Such an enterprise-focused system had, however,
industry and/or enterprise level around March
been developing from the early 1990s and
each year. Key unions would lead the bargaining
paralleled the decline in union membership and
and set standards that weaker unions could
the economic downturn. Companies had been
adopt. The similarity of wage settlements across
expanding joint consultative arrangements such
enterprises and industries demonstrated the
that by 1997 nearly four out of five unionized
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enterprises had such mechanisms in place. [30]
need to accept shorter working hours and lower
As in earlier years, these activities were
wages. [33]
concentrated in large enterprises. Joint
consultation was further strengthened by the
Industrial action that flows from collective
revised Labour Standards Law (1998) which
bargaining is low in Japan by international
introduced statutory management-worker
standards. Working days lost due to industrial
committees for the revision of working hours.
action have been falling as have the number of
[31]
disputes. The reasons for disputes have also
changed with disputes over wages giving way to
As many companies have experienced financial
disputes over ‘discharge and re-instatement’ and
difficulties over the past decade, unions have
individual disputes over the termination of
been forced to trade wage increases for
employment and the deterioration of
guarantees concerning employment levels.
employment and working conditions. [34] In
Employers have, since about 1999, also sought to
unionised
align wage increases with business performance.
manufacturing companies and government
[32] This has been particularly the case with the
agencies, wages seem to be higher and working
lump-sum bonuses which are normally awarded
hours lower, although the major determinant of
twice a year. While some employers have also
these employment conditions are the demand for
attempted to extend performance criteria to
labour and the economic health of the company.
enterprises,
typically
larger
monthly basic wages, it remains the case that this
wage component remains strongly linked to age
The development, structure and strategies of
and length of service. There also appears to be
trade unions
greater diversity in scheduled hours of work,
although overall unions have not made any
What factors can explain why Japanese unions
major gains in this area in recent years. The
have adopted this enterprise focus? The first
increased diversity in hours of work may be
explanation is that the structure of Japanese
partly a result of increased enterprise bargaining
unions is a product of certain historical
following the demise of shunto as a national
traditions. This can be seen in the high levels of
system but is also due to the 2001 Social
trust and collective identities that exist in the
Agreement on Employment between Rengo and
modern Japanese company which can be traced
Nikkeirein, the then peak employer body, which
back to the Tokugawa period. [35] The strong
committed the parties to maintaining
hostility of management towards industrial
employment while recognising that workers may
unionism was important in establishing, the
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dominance of enterprise structures. However, as
Moreover, this was seen as a way to more closely
stated earlier, only a third of all unions were
align the interests of workers with those of the
organized along enterprise lines in the 1930s, and
company. This led to employers providing
since the 1950s, it is likely that other factors are
resources for the enterprise unions, and these
more important.
unions, with some guarantees of job security,
were prepared to work with management to
The second explanation for Japanese enterprise
ensure the success of the company. Thus, while
unionism relates to the political context and the
external influences were important, employers’
degree of liberalization and autonomy granted to
strong support for this type of enterprise
worker organizations. The industrial unions that
unionism proved decisive
developed during the US occupation had
continuation and growth of this form.
in ensuring the
increasingly engaged in industrial action that
was strongly resisted by employers and the state.
Employers’ strategies cannot, however, be
This occurred at a critical juncture of economic
divorced from the environment in which they
and political events which encouraged the state,
operate. This leads to a fourth explanation of
the US occupation authorities and employers to
Japanese union structure; the economic contexts
restructure unions along enterprise lines. At the
of competition and lately globalization. Japanese
same time, the productivity movement was
firms operate, and have done so for many years,
emerging in Japan with its underlying principle
in a highly competitive domestic market.
of sharing enterprise gains between employers,
Through the keiretsu structure Japanese
workers and consumers. This was accepted by
companies have a high degree of vertical
workers as a means of ensuring job security, and
integration and are usually focused on a
served to reinforce an enterprise union structure
particular industry. This industrial structure has
since productivity programs could be developed
resulted in intense competition between firms. In
most effectively at the enterprise level.
turn this competition has led to an emphasis on
market share, which can be achieved by a unique
This explanation leads to a consideration of the
product, a focus on quality (and to a lesser extent
role of employers in shaping union structure.
price), and improvements in productivity. All of
Japanese employers promoted enterprise unions
these are company-based objectives that are
in an attempt to overcome the ‘excesses’ of
assisted by a union structure in which collective
industrial and ideologically based unionism that
bargaining frameworks are enterprise based.
they viewed as responsible for the wave of
These activities were embraced by the leaders of
strikes in the late 1940s and early 1950s.
the ‘new’ enterprise unions who saw wider
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industrial and ideological issues as not part of
What then is the future of Japanese enterprise
their responsibilities. For this group of union
unions? The present climate provides a clear
leaders, industrial or ideological concerns would
indication of the weakness of the enterprise
become the province of the emerging union
union model. The demise of shunto, coupled with
federations. More recently, although not an
an increase in consultative activities within
explanation of union structure per se,
enterprises, have served to reinforce this form of
globalization has reinforced enterprise union
unionism. Moreover, there is little pressure for
structures both within Japan and in offshore
change as can be seen in the inability of Japanese
operations.
unions to provide a more inclusive union
structure by recruiting part-time and women
workers. While there are some possibilities for
change, as shown by the emergence of several
general or industrial type unions, and unions that
go beyond one company to service workers in
associated companies and networks, to date these
initiatives are the exception and do not indicate a
wider trend. Of course large companies will
continue to be highly unionised, but with the
demographic changes taking place in Japan,
Toyota workers rally for wage hikes
coupled with cutbacks in pensions that will force
more people to take part-time work after
Conclusions
retirement, it is likely that an increasing number
of workers will fall outside unions and the
This paper examined the structure and activities
protection and benefits they can provide.
of Japanese enterprise unions and explained the
dominance of this form of unionism. Unions in
Japan face many of the challenges that unions in
John Benson is Professor and Head, School of
other industrialized countries face. These
Management, University of South Australia,
challenges include decreasing membership,
Australia. This paper is a condensed version of a
declining relevance to younger workers, a fall in
chapter in a recently published book on trade unions
the significance of collective bargaining and
in Asia. The full chapter can be found in Trade
increasing employer involvement in the export
Unions in Asia: An Economic and Sociological
of jobs overseas.
Analysis (London: Routledge, 2008) edited by John
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Benson and Ying Zhu.
Japanese and International Economies, 8: 53-71.
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