Only dispatch companies, which gained the trust of client companies and dispatch workers, can prevail after the revision of the Worker Dispatch Law.
The Revised Worker Dispatch Law (WDL) has finally been enacted. The diversity of opinions regarding the revision aside, scrutiny of the law and related ordinances reveals its clear intention.
That is, it demonstrates willingness to expand the potential of the dispatch work style, that differs from what has been known as “traditional Japanese employment practices.” In a way, the revised law can be seen as a message to dispatch companies.
What is the objective of the revised WDL?
The revision of WDL appears to have a clear objective.
First, it intends to stabilize employment of dispatch workers, open up opportunities for them, and give them more potential for self-achievement.
For example, a way to become regular (open-ended employment) employee is available for dispatch workers after a certain period. This was also stated in the previous WDL but the revised law has abolished the term limit of certain types of jobs and instead has set a term limit to three years for each employer and each individual. In case the dispatch worker wishes to continue doing the same work after a three-year term ends, the dispatch company is obliged to encourage the client company to directly hire the worker.
While the dispatch work style is generally positioned as temporary and tentative work arrangement, the revised WDL seeks to ensure equality of the dispatch worker to the regular employee of the client company and to take measures to stabilize employment. Moreover, the revised law explicitly provides for career advancement opportunities for the dispatch worker while working.
In any kind of work, one tends to develop skills after accumulating experience, which results in improvement in performance or productivity. The revised law has opened up a path toward career advancement for dispatch workers on that basis. In other words, the law responds to the desire of those motivated workers who are eager to advance.
I therefore believe the revised law has widened the scope for the dispatch work style.
How can a dispatch worker develop skills and advance in a career in the limited term up to three years? The revised law makes it easier for workers to design their future.
In the meantime, both companies who utilize dispatch workers, and dispatch companies, must provide some support for dispatch workers. In this sense, the revised law has increased the burden of dispatch companies in various aspects.
Regarding the worker dispatch business, the notification system was abolished and the license system was adopted. It means that dispatch companies are under stricter surveillance of the government.
Dispatch companies therefore are required to have ever more sound management. This can be said as another objective of the revision of the WDL.
The revised law questions credentials of dispatch companies
The revised WDL seeks to stabilize the employment environment of dispatch workers, enhance their future prospects, and improve the dispatch companies.
These intentions were incorporated in revisions both the text of the law and the related ordinance, and administrative business requirements for compliance.
It is no easy task to thoroughly read all of these documents. It appears that some dispatch companies cannot fully understand what has been changed by the revision and what would need to be done.
Even some important basic matters, such as the following, may not be fully understood. “At what timing should the revised law be applicable to dispatch workers who were employed based on the previous law?” “When should we recognize as the starting date to adopt the revised law?” “When will be the conflict date?”
We know answers for these questions. A contract which was signed by September 29, 2015, the day before the enactment of the revised law, continues to be covered by the previous law. When the employee signs the next contract, the revised law governs.
However, the dispatch contract with the worker in the “cooling period” defined by the former law would not be reset, although a dispatch company will be allowed to dispatch another person to the same department or to the same job with a new contract under the revised law.
Not all dispatch companies have know-how to respond to such situations. Rather, people in charge at many of these companies are feeling at a loss.
We at UT Group are different. I feel strongly that those in charge at a dispatch company must give clear answers, explanation, and support to the client company and to dispatch workers. This is our job.
From the perspective of clients, the revised WDL is beneficial as they can receive higher-level, motivated workers. We at dispatch companies must be trusted by the clients. Thus, it is our obligation to understand the revised law and effectively implement it.
What are the dispatch companies to do?
Now, what are specific actions that dispatch companies should take as the revised WDL was enacted?
First, we must enhance career consulting for our dispatch staff. Although this has become an obligation, how much care or what quality of attention is to be extended and given is up to each company. That is the reality.
I believe that dispatch companies should be well prepared to offer generous support, as contributing to skill enhancement and career advancement of dispatch workers is one of the most important aspects of the revised law and this support can greatly contribute to motivation of the workers. This can ultimately be beneficial not only to those staff but also to client companies.
Specifically, dispatch companies should hire private-sector or nationally-certified career consultants, who can best help dispatch workers design their career based on their ability, aptitude, career, and wishes. The guidance and opinions of an experienced third-party consultant should serve as a strong force for dispatch staff to plan their own future career.
Improvement in income and work content is also important for the workers, together with career advancement. Higher income can motivate the staff and also become a driving force for their efforts to raise work efficiency, resulting in a greater contribution to the client company. Hence, such workers, with improved skills, should be rewarded with higher income. It is also natural that experienced and higher-skilled staff should get the chance to be promoted.
Another important element here is a fair evaluation of dispatch workers by the dispatch company. Input from a client company is valuable and so is overall coordination with the client.
Specifically, the dispatch company and the client company should ideally use the same evaluation system and the same format. We make sure that the evaluation result is reflected in the position and the income of the dispatch staff.
This is only possible when the client company understands and agrees to cooperate. It is the role of the dispatch company to ask the client to do so.
In addition, the dispatch company should make efforts to raise skills and provide career consulting to its personnel, as this ultimately will lead to contributions to the performance of the client companies and as a result enable the dispatch company to earn the understanding and merit the trust of the clients. Can such a virtuous cycle be realized? This depends on the quality of the dispatch company and relates to its competitiveness against peers.
Becoming the dispatch company of choice
Since its institution in 1980s, the WDL has been revised several times, according to the needs of the time. Each revision widened the scope of work style, made employment of dispatch workers more stable, and opened up more potential for their future. In addition to these changes, the latest revision appears to have focused on the quality of dispatch companies as well.
I am humbled to see many requirements for dispatch companies and anticipate stricter administrative supervision and guidance. But I also believe that this trend is natural as dispatch workers can better do their work with the assurance and comfort of knowing that their dispatch companies have healthy management bases and thorough support systems.
How well can dispatch companies respond to the revised law? How can they realize the value that is an implicit objective of the revision? Over time, the existing dispatch companies are expected to show disparate performance in realizing the benefits of the revision and doing business under the revised arrangements. Even companies with noble vision may not survive unless they have execution power and strong resources.
We at UT Group sincerely want to prevail as the gold-standard dispatch company, and the first company of choice by everyone, by fulfilling the trust and expectations extended to us by both client companies and own dispatch staff.
Lastly, UT Group has encouraged termless employment (i.e., “regular employees” representing 85% of our 10,000 workforce) for over 20 years. The revised WDL has enabled termless employment dispatch of the same person to the same workplace, which well satisfies the needs of the client company’s core work flow (which often requires advanced skills.) We are also well prepared to provide systematic step-wise training courses to workers. In addition, we are prepared to sign non-disclosure agreements and provide consultation for the so-called five-year problem of the Revised Labor Contracts Act to client companies. We look forward to doing business with more client companies.
Materials for downloading
Reference materials on the Revision of Worker Dispatch Law are available.
* The link site is only available in Japanese text.
Companies who are thinking about termless dispatch (regular employee dispatch) and companies who are considering corporate transfers or sales should please feel free to contact the Business Development Department of UT Group.
Available from 9:00 to 18:00,
except Saturdays, Sundays, and holidays
* The link site is only available in Japanese text.