Error-riddled data forces Japan to drop labour reform

Abe to remove a proposal to expand discretionary labour system after survey mistakes - including one employee doing 45 hours overtime in one day

Japan's Prime Minister Shinzo Abe. Kim Kyung-Hoon/Reuters

Japanese Prime Minister Shinzo Abe dropped a key element of his labour reforms following the discovery of hundreds of errors in data provided to support the legislation.

Mr Abe said late Wednesday that his government would remove from a planned bill a proposal to expand the so-called discretionary labour system, under which more employees would be paid for output, regardless of hours worked, to boost productivity.

“The data led to public concerns,” Mr Abe said in Tokyo. “I’ve ordered the complete removal of the discretionary labour system from the bill on reforming working practice.”

While the government still plans to submit the bill in the current parliament session, the backdown is an embarrassment for Mr Abe over what he has called a “historic” bid to combat a labour shortage as the world’s third-biggest economy ages. Making the labour system more flexible is difficult in a country where life-long employment is entrenched, and where long hours and a lack of help for working parents are common.

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“The Abe administration will likely lose some support from big business for its broader work reform agenda, since the flexible hours reform was included to secure business support for a package that also includes more stringent regulations of overtime work,” Tobias Harris, a Japan analyst at Teneo Intelligence in Washington, wrote in an emailed note. “It is unlikely that Wednesday’s announcement will be sufficient to defuse opposition to the work reform package.”

Mr Abe told parliament last month that workers on the “fixed pay” system tended to put in fewer hours than their peers, but the government survey he cited was later shown to be full of mistakes - including one employee doing 45 hours overtime in a single day. He’s repeatedly apologised for citing the survey.

The fight over the data errors has drawn public attention to the change. Two newspaper surveys published this week found more respondents were against it than in favour.

Mr Abe has said the package of measures will help people combine work with caring for children or elderly relatives. It includes a cap on overtime hours, and rules intended to narrow the difference in treatment of full-time and casual workers.

But it has come under fire over a change that would loosen restrictions on overtime for highly paid professionals, such as workers in the financial industry. Opposition politicians makers have said the measures could put more people at risk of death from overwork.