◆First Survey on conversion from fixed-term to indefinite term contract
The Ministry of Health, Labor and Welfare has released the results of its “Survey on Fixed-term Labor Contracts,” revealing for the first time the actual status of the “rules for conversion from fixed-term to indefinite term contract” (newly established under the revised Labor Contract Law enacted in April 2013), which gives fixed-term contract workers the right to apply for an indefinite contract if their contracts are renewed for a total of more than five years. The survey was conducted on 5,662 business establishments employing five or more people as of April 2020 and 6,670 workers as of January 2021, respectively.
◆Approximately 30% of respondents exercised their right to apply for a change of employment
According to the survey results, the percentage of establishments employing fixed-term contract workers was 41.7%. Of those, 27.8% had the right to apply for a change of employment to an indefinite-term contract in fiscal 2018-2019 and exercised that right, while 65.5% were still employed without exercising the right to apply for a change of employment. By size of establishment, 39.9% of establishments with 1,000 or more employees, 22.2% of establishments with 300-999 employees, 22.3% of establishments with 100-299 employees, 17.1% of establishments with 30-99 employees, and 8.6% of establishments with 5-29 employees exercised their right to apply for conversion from fixed-term to indefinite term contract. The higher the number of employees, the higher the percentage of establishments exercising their right to conversion to indefinite term contract.
◆What are the reasons for not wanting to convert to indefinite term?
On the other hand, in the survey of fixed-term contract workers, 18.9% of respondents answered “Yes, I would like to,” 22.6% answered “No (I would like to continue with a fixed-term contract),” and 53.6% answered “I don’t know. The most common reason for wanting to convert to an indefinite term was “because it will eliminate employment uncertainty,” followed by “because it will make it easier to make long-term career prospects and future life plans,” and “because wages and working conditions can be expected to improve afterwards. The most common reason given for not wanting to work was “Because I am old and am rehired after retirement,” followed by “Because I am not dissatisfied with the current situation,” and “Because it would be meaningless if I only lost my contract period.”
◆40% of respondents don’t know about the “rules for conversion to indefinite term contract”
17.8% of respondents said they had heard of the “conversion rules,” while 39.9% said they knew nothing about it or had never heard of it, indicating that 40% of respondents were unaware of the system itself.
It has been eight years since the new rules for conversion was established, but the system is still not fully recognized. In March, the Ministry of Health, Labor and Welfare started a study group to review the rules for conversion to indefinite term contract, and discussions are continuing. It is hoped that both fixed-term contract workers and companies will understand the content of the rules and that the rules will be properly implemented.
