Temp Nation: Fighting Panasonic

Editor's note: Temp Nation is a four-part series on the structural changes taking place in Japan, the world's second-largest economy. With the demise of Japan, Inc.'s lifetime employment policies, more than a third of the country's workforce is now underworked and underpaid. This series examines how some temps are starting to fight back. It also investigates the impact on foreign workers, and the political response to this growing social and economic problem.

KASUGAI, Japan — His bosses asked him to teach a co-worker everything he knew, said Makoto Nagae, 51. Then he was laid off.

When he complained to the local labor standards bureau, the six other temp workers in his unit were also let go. Five permanent employees stayed on.

Naturally, the other temps blamed him, at least at first. "They said, 'it's your fault,'" said Nagae, a reserved, skinny man who sported black designer glasses and a T-shirt with the word "Rumble" on it during an interview in March.

Since they were all good friends, Nagae was able to convince his former co-workers they'd all been wronged, he said. Still, they weren't willing to join him in a lawsuit against Panasonic Ecosystems, which owns the factory where they worked. Why?

"Because they're Japanese," said Nagae, in an interview at sun-lit hotel lobby here in Japan's manufacturing heartland. "They said, 'oh well, it can't be helped.' So they didn't try to fight. Japanese people are like that."

Asked what made him different, he said, "I was really angry."

Nagae is one of a growing number of Japanese temps who are fighting back against labor practices they say are increasingly skewed in favor of big companies and give scant protection to non-permanent workers.

Most only do so when they've got little or nothing lose. Nagae gave all his savings to his ex-wife, who lives with his two children ("There was a relationship" between his divorce and job troubles, said Nagae vaguely.) He now works as a cook at a yakitori (meat skewer) restaurant, and collects a monthly job trainee allowance from the government.

Nagae was assigned to Panasonic Ecosystems in August 2004 as a "dispatch" worker. As such, he was technically the employee of the dispatch firm, not Panasonic Ecosystems.

He became an expert at quality control work, which involved X-ray and other testing of electric components of ventilation equipment. He made 300,000 yen (about $3,200) a month. As the most knowledgeable worker in his unit, he often trained permanent employees.

Those permanent employees, five in his unit, made up to 500,000 yen (nearly $5,400) a month for the exact same work and hours, he says, and enjoyed benefits Nagae didn't.

In March 2009, just after training a permanent employee, the dispatch firm declined to renew his contract. He'd been a temp for nearly five years, even though labor regulations stipulate that most dispatch contracts should last three years maximum.

When he began a complaint process with the local labor standards bureau, Panasonic Ecosystems threatened to sue anyone in his unit who gave him information, he said.

He thinks he was singled out for downsizing because he was the top-earning temp, and because he was outspoken about how work should be done. "Whenever I was told to do work in a way I thought was wrong, I said so," said Nagae. "Panasonic came to regard me as troublesome."

Now, Nagae wants compensation from Panasonic Ecosystems, saying he was effectively its employee. He acknowledged that a recent court judgment in favor of another Panasonic unit in a similar complaint brought by former dispatch workers was a bad sign for his own case. "But I think it's still possible to win," he said.

Nagae clearly took pride in his skills, and even complained that the dispatch company sent people to his unit who weren't up to the job. He said neither workers nor companies were well-served by the temp worker arrangements.

"As a dispatch worker, it doesn't matter how hard you work, your pay doesn't go up," said Nagae. "And there's no chance of becoming a permanent employee, so there's no incentive for doing a good job."

In a separate interview, another former dispatch worker assigned to Panasonic Ecosystems explained why he's also suing the company.

"Because Panasonic is a company that represents Japan, it shouldn't tolerate illegalities," said the 45-year-old, dressed in a button-down, vest and glasses. "It's the first time I've ever taken anyone to court."

He did not want his name used because he still lives and works in the same community as many loyal, permanent Panasonic workers.

Starting in late 2007 he also did quality control testing on ventilation equipment, in a separate unit from Nagae. He made 240,000 yen (more than $2,500) per month, and said the factory then employed about 1,000 dispatch and other temp workers, and about 500 full-timers. For dispatch workers, "there was no possibility of becoming a permanent worker," he said, and many had been kept in temp status beyond the supposed three-year time limit.

He was let go in April 2009 after the recession hit, along with hundreds of thousands of other dispatch workers across Japan. He said the dispatch firm refused to respond to his complaints about his contract, and that Panasonic keeps changing its legal argument. (At one point it argued that he was a "scientist," the worker said with a rueful laugh, and so was in a specialized category that could be employed indefinitely as dispatch labor.)

While fighting his case, he lives with his wife and two children in public housing, barely getting by on a 150,000 yen ($1,600) a month job.

"Violating the dispatch law means buying and selling people," he said. "Many people have been through similar things as me — why aren't they getting more angry about it?"

Panasonic Ecosystems is a wholly-owned subsidiary of the Panasonic Group, which declined comment for this article, saying it was company policy not to comment on pending litigation.

It also declined to provide details on its workforce or to respond to criticism about its use of temp workers.

Temp Nation the series:

The demise of fulltime employment

Fighting Panasonic

The foreign effect

A political solution?