Comment on Industrial Revitalisation Bills passed

2 April 2003

Tadayoshi KUSANO
General Secretary

  1. Today, three bills designed to revive crippled corporations, including the Industrial Revitalisation Corporation Bill, cleared the Diet at the Plenary of the House of Councillors, by a majority supported by three ruling parties and the Democratic Party of Japan (DPJ).

  2. The Industrial Revitalisation Corporation (IRC) Law is 5-years temporary legislation to revive debt-laden companies. It provides that the IRC will select companies it believes can be turned around after receiving restructuring plans signed by both debtor companies and their main banks, buy their bad debts from their banks, support them as they follow an IRC's restructuring plan and sell debts to new sponsors.

    As emphasised employment stability and labour-management consultation as a precondition for restructuring, Rengo called the Government to incorporate these two concerns into the bill. Following the consultation between the ruling parties and the DPJ, the bill was revised three aspects: employment stabilities is included in objectives of the IRC; the situation of labour-management consultation is taken into consideration when deciding if the IRC is to support a company; and, any company is not removed from the support because of its size. Furthermore, the law is accompanied with seven supplementary resolutions, including one requesting the Industrial Revitalisation Council to reflect views of trade unions into their decisions about selecting companies to be supported.

    Rengo highly evaluates these revisions with supplementary resolutions.

  3. The Industrial Revitalisation revision bill includes a provision that tax and other favourable treatments to be given to companies in the process of restructuring, as well as one for the establishment of a committee supporting restructuring of small and medium-sized enterprises (SME).

    Rengo demanded for labour-management consultation that is now referred in the guidelines to be stipulated in the Law, as well as other revisions aimed at improving legislation to protect workers in the events of transfers of undertakings or businesses and strengthening authority of a SME Restructuring Committee. Thanks to efforts of the DPJ and other opposition parties, these demands were successfully actualised in the adoption of resolutions on "the safeguarding of employees" and "workers' claims to be considered as a safety net for workers".

    The Industrial Revitalisation Law will further facilitate the divisions and transfers of businesses and, therefore, legislation to protect workers should be improved so that employment responsibilities are taken over and a priority is given to a worker's claim.

  4. Rengo will keep its eyes on the IRC, particularly if it ensures that restructuring processes are transparent and legitimate on the basis of labour-management consultation, without any burden on the people. In addition, Rengo will demands that prior labour-management consultation be done to promote job stability and sustainability in the events of transfers of businesses and improve legislative workers' protection in the event of mergers and acquisitions of businesses.