Japanese Human Resources Management
Nov 29th
Assignment on Fast Retailing
Page 10 3rd Paragraph to Last
(1)
Analyze “HR Policies” of Uniqlo and point out its difficulties
& challenges.
(2)
Although Mr. Yanai’s charismatic leadership style and
consecutive business successes, Uniqlo is known as “Black
Company” (“brakku kigyoo”). Their turnover ratio is very
high (up to 50% especially for young employees.) Consider
why this kind of thing happens in Uniqlo. Suggest suitable
solutions.
BLACK KIGYO
Unpaid overtime excesses hit young
Overwork abuse stays under radar with new term, younger targets
by Ayako Mie

Staff Writer
Jun 25, 2013 Some companies are compelling their younger employees to work
more than 100 hours of uncompensated overtime a month to maximize their
profits.
Japan has been derided for its long working hours for decades, and the risks of the
hazardous practice eventually led to the infamous term “karoshi,” or death from
overwork.
Thanks to the Great Recession, however, a new term is circulating among young
workers to describe companies that depend on such exploitation: “burakku kigyo”
(black company).
How are black companies defined?
The term generally carries sweatshop connotations, but the victims are usually normal
office workers.
Experts say such companies resort to exploiting staff in their 20s and 30s, rather than
part-timers, by forcing them to work excessively long hours without overtime pay in the
name of global competition.
The young workers are often told their base salaries already include overtime pay and
that they can increase it if they perform well. These claims are used to lure hungry
recruits.
In many cases, workers are verbally abused and subjected to power harassment
because disobedience is not an option. Some fall into depression or develop other
psychiatric disorders that eventually leave them no choice but to quit the very jobs they
were dying to keep.
When did the problem become prominent?
The term burakku kigyo was coined by young workers in the information technology
industry during the previous decade. It gained more traction after a 2009 movie based
on comments posted on the notorious Japanese Web site 2channel chronicled the
plight of a man trapped in such a company.
Are there specific industries where such firms are common?
Whereas large companies tend to reduce costs by outsourcing to save on benefits,
experts agree that emerging industries — particularly welfare services — tend to
exploit young workers by coercing them into unpaid overtime.
Attrition rates in such companies are usually high. According to a 2012 health ministry
report, more than 45 percent of college graduates employed in the service,
entertainment and education industries left their jobs within three years.
But critics note that attrition rates alone can’t be the sole criteria for determining
whether a company is exploiting workers.
If Japan is notorious for its long working hours, why is this becoming a social
issue now?
When karoshi emerged during the bubble years in the 1980s, both young and old
employees were victims.
Despite the nominal reduction in working times that the karoshi phenomenon
instigated, Japan still has the second-largest ratio of people working more than 49
hours a week, according to the International Labor Organization. Topping the list is
South Korea.
Haruki Konno, head of the nonprofit organization Posse, which offers advice to
employees whose companies are bent on working them into the ground, said that
burakku kigyo is just a modern-day take on karoshi where the main targets are people
in their 20s and 30s who are desperate for full-time jobs in Japan’s worst economic
times since the war.
Konno said exploitative companies hire new college graduates en masse, assuming
most won’t be able to survive the harsh conditions and will eventually resign.
Then they just hire more.
“These companies are destroying young and talented workers because they think they
are replaceable,” he said.
When employees develop depression or other syndromes, such employers will only
agree to accept voluntary resignations, and only after they are forced to take medical
leave and their doctors declare them cured, Konno said.
This is because firms don’t want to be held accountable for mental disorders, let alone
pay compensation.
Isn’t the public protected by overtime regulations?
The labor law prohibits companies from letting employees work more than 40 hours a
week, but Article 36 offers a loophole by allowing them to cross that threshold as long
as their labor unions consent.
The threshold for overtime is considered to be around 45 hours a month. Although the
Health, Labor and Welfare Ministry regards anything over 80 hours a month conducive
to karoshi, companies can exceed this if the unions sign the special clause under
Article 36.
According to a survey by My News Japan, more than 60 percent of Japan’s 225 most
popular companies compel their employees to do more than 80 hours of overtime per
month, and sometimes even 160 hours.
Uniqlo owner Fast Retailing Co. and pub chain Watami Co. are among those
companies rumored to be burakku kigyo.
Fast Retailing declined to comment on the reported allegation when contacted by The
Japan Times.
On June 6, weekly magazine Shukan Bunshun ran a story accusing Watami of such
exploitation. CEO Miki Watanabe, rebuffed this allegation on Twitter, claiming the
article was not based on fact and vowing to consult the company’s lawyers about the
claim.
Watanabe will be running for a seat in the Upper House in July as a candidate for the
ruling Liberal Democratic Party.
Shigeyuki Jo, a human resources consultant, said Japan’s traditional concept of lifetime employment was based on the custom of working overtime without pay.
“Most workers in Japan are forced to work under the burakku kigyo standard in the
name of life-time employment, especially at small and midsize firms, because they
want to hold onto their jobs,” said Jo, who said he used to log about 1,500 hours of OT
a year working for Fujitsu Ltd.
Can such abuses be curbed?
Konno of Posse said it is hard for victims to speak out against oppressive management
teams because they feel they are partly to blame for agreeing to the situation, despite
not knowing any better. As a result, many oppressed workers don’t bother to step
forward.
New employees are trained to be obedient from the start. The pressure is so high and
pervasive throughout the country that most don’t even realize they are being abused,
Konno said. Some thus refuse to protest for fear of sabotaging their careers.
“Victims cannot even quit (when they want to) because employers won’t let them. They
do not get any compensation. There is no way for them to escape,” he said.
Has the government attempted to rectify the problem?
The Democratic Party of Japan is pledging in its campaign platform for the House of
Councilors to mandate that companies specify their turnover rates in their recruitment
ads so job hunters can get an idea about their working conditions.
But experts say it is difficult to set up labor standards that can prevent companies from
abusing employees.
It is also hard to get a realistic grasp of the abuse because workers often fail to log their
OT for fear of being penalized by their employers, who are leery of exceeding the 80hour limit and risking litigation.
What kind of safety net is needed?
Prime Minister Shinzo Abe has apparently floated the idea of a “discretionary working
system” that critics say will only encourage black company practices.
Under the system, workers and employers agree in advance on how many hours
certain tasks require and how much they should be paid to do them, regardless of the
reality.
Jo said that introducing the system would require companies to provide more specific
job descriptions — rather than vague references to broad responsibilities — so workers
are not obligated to engage in unrelated tasks.
Konno of Posse said the government should mandate an overtime cap and ensure
there are no loopholes.
“Those companies think they can do anything to maximize their profit. But wearing out
hopeful young workers is really eroding Japan’s competitiveness in the long run,” he
said.
UNIQLO – WE ONLY WANT GLOBALLY
MINDED PEOPLE WHO AR E HUNGRY FOR
SUCCESS
April 25, 2013
By Pernille Rudlin
Tadashi Yanai, the founder of clothing retail chain Uniqlo, reinforces his reputation as a
hard nut with a robust response to the Nikkei Business special feature about companies
who get blacklisted by young Japanese for having tough working conditions. “Uniqlo is a
“black” company because we have a global strategy, which has disorientated many longterm employees, who were nonetheless doing a fine job”, he says, and now thinks that
Uniqlo should have evaluated them well regardless of whether they were globally minded
or not.
But that is about the only concession he makes, stating that many people leave Uniqlo
because they don’t make the grade as future store managers. Young Japanese have to
understand that they are in a global competition, he insists, going on to criticize Japanese
people who think it’s OK to be Number Two in their markets. He says half of the people
Uniqlo interviews for jobs are non-Japanese now and that he demands that the Japanese
recruits work overseas. If they don’t then he will regard them as “labour” rather than
management material.
In other words, Yanai is breaking the unspoken rule amongst Japanese companies that
graduate recruits should all be treated equally, as if they can all be senior managers.” I
think people who use the expression “black company” are those people who want to
preserve the Japanese working environment of the past. We can’t afford to do that.”
For more on how Uniqlo operates, there was an interesting panel discussion on BBC’s
Radio 4 programme The Bottom Line last month, with Berndt Hauptkorn, CEO of Uniqlo
Europe, along with Sir Stuart Rose ex MD of Marks and Spencers and Andy Street of John
Lewis