Government expands introduction of wage peak systems and strengthens improvement of collective agreements
According to a report released on 1 July by the Ministry of Employment & Labor (MOEL) titled ‘Current Situation of Wage Peak System Introduction in Top 30 Enterprises’, 47% affiliates of the top 30 enterprises (by total assets) have introduced wage peak systems.
Of the 275 affiliated companies for the 1st– to 15th-ranked enterprises, and 103 affiliated companies for the 16th– to 30th-ranked enterprises, 55% and 25%, respectively, have also introduced wage peak systems. The majority of these companies have begun wage reductions under a wage peak system at 56 years old (37.5%), followed by (in the order of age): 57 years old (16.7%), 58 years old (29.2%), and 59 years old (12.5%). The wage reduction rate under the peak wage is as follows: 10% (56 years old) → 19% (57 years old) → 27% (58 years old) → 34% (59 years old) → 40% (60 years old).
The MOEL plans to induce more companies to introduce wage peak systems in the private sector through this report.
The MOEL is also promoting reasonable industrial relations through correction of illegal/unreasonable collective agreements. According to its Investigation of Current Collective Agreements* on 24 June, about 40% of the investigated trade unions have illegal/unreasonable collective agreements, such as priorities given to retirees’ family members while recruiting.
*Enterprises that were investigated include those in the top 30 workplaces in terms of sales as of 2013-end with trade unions.
[Table 1] MOEL Investigation of Current Collective Agreements
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Workplaces with illegal collective agreements ▲ Giving priority to retiree family members in recruiting: 11 workplaces (36.7%) ▲ Collective agreements with “Sole Bargaining Union” clause: 10 workplaces (33.3%) Workplaces with unreasonable collective agreements ▲ Trade union consent required when shuffling personnel taking disciplinary action conducting education & training: 11 workplaces (36.7%) ▲ Trade union consent required before layoffs voluntary retirement: 7 workplaces (23.3%) ▲ Trade union consent required in case of merger & acquisition: 5 workplaces (16.7%) ▲ Trade union consent required before using subcontractor firms: 4 workplaces (13.3%) |
The MOEL plans ask labor and management to correct these illegal/unreasonable collective agreements voluntarily by the end of August this year. If not, corrective orders will be issued.