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Since the late 2000s, collective bargaining for the self-employed has attracted much attention in Japan. Three groups of cases have been filed with the Labor Relations Commission (hereinafter “LRC”) seeking unfair labor practice remedies, alleging that labor unions organized by supposedly self-employed persons have been denied collective bargaining illegally by the purported employers.
First, in the late 2000s, three cases were filed with the LRCs. In these cases, persons who formed labor unions were not hired by employment contracts: an opera chorus member with a performance contract, and persons engaged in repairing work of housing facilities or audio apparatus with work contracts. They might not be workers in the sense of the Labor Standards Act (hereinafter “LSA”) but they contended that they were workers in the sense of the Labor Union Act (hereinafter “LUA”) and thus able to form labor unions and demand collective bargaining.
The prefectural LRCs and the Central LRC admitted that they were workers under the LUA and issued remedial orders. In the judicial review of the orders, however, lower courts held that they were not workers but independent contractors and rescinded the Central LRC’s remedial orders. In 2011 and 2012, three decisions by the Supreme Court reversed the Tokyo High Court’s decisions and held that they were workers under the LUA and endorsed the Central LRC’s remedial orders.
Second, two groups of the convenience store owners, who concluded franchise contracts with Seven-Eleven Japan and with Family Mart Corporation, organized labor unions respectively and demanded collective bargaining. As the franchisors refused the collective bargaining, contending that they were not workers but self-employed, the Labor Relations Commissions in Okayama Prefecture and Tokyo Metropolitan Government issued remedial orders to bargain collectively. However, on February 6, 2019, the Central LRC held that the convenience store owners are not workers under the LUA and reversed the prefectural LRCs’ orders. The Central LRC mentioned that the issue of the weak bargaining position of the convenience stores owners should be resolved under the fair competition policy.
Third, the Uber Japan refused collective bargaining with the labor union organized by Uber Eats deliverers. The union filed the case as an unfair labor practice to the Tokyo LRC in March 2020. Tokyo LRC has not yet decided the case.
These cases have not only required the reconsideration of the binary concept between employee and self-employed but also triggered an important legal discussion concerning the relationship between labor law and competition law.
If these service providers are deemed workers under the Labor Union Act, the refusal of collective bargaining by the other party would constitute illegal, unfair labor practice. However, if they are deemed self-employed or business operators, the act of concluding a collective bargaining agreement to set minimum terms and conditions of providing service could be deemed an illegal cartel under competition law. Recent case law developments show that the extended concept of workers under the LUA overlaps the notion of business operator or enterprise under the competition law. In this situation, an important legal issue arises as to which rule should be applied: labor law that imposes the duty of collective bargaining entailing conclusion of collective bargaining agreements, or competition law, which prohibits cartels in principle.
On such conflict between labor law and competition law, the Japan Fair Trade Commission (hereinafter “JFTC”) and Competition Policy Research Center issued an important report, “the Report of the Study Group on Human Resources and Competition Policy” (hereinafter “JFTC Report”) in February 2018. The JFTC Report discusses how competition law applies to employment and labor relations, and clarifies that where labor and employment laws apply, the JFTC will not intervene as a principle except for exceptional cases.
This paper examines the Supreme Court decisions of the 2010s which extended the notion of workers under the LUA , the order of the Central Labor Relations Commission which denied the worker status of the convenience store owners who organized labor unions and demanded collective bargaining from their franchisers , and legal issues in the overlapping area of labor law and competition law.
