Q83 Isn't lifetime employment an important feature of Japanese management? Is the situation changing?

A83 It may have been an exaggeration to say that employment was for life, but certainly the three main characteristics of the Japanese employment system were long-term employment, with individuals recruited when they graduated from high school or university and remaining with the same company until retirement

To The end of lifetime employment seniority-based wage system; and internal company labor unions. In Japan, when a company employs someone, the employment period is generally open-ended. Legally, companies are free to dis-miss employees, but in reality it is impossible to lay off staff at will. This situation has become established by the courts through the legal principles governing abuse of the right of dismissal.

The long-term employment system is, thus, protected by law. There are signs that this long-term employment system is changing, however. The trigger for change was the collapse of the economic bubble. Before this, all employees benefited from long-term employment status but, after the bubble, a storm of restructuring took place. Companies gradually replaced support staff with non-regular employees, such as temporary staff from employment agencies and contract workers. With the increase in the number of these employees-who lacked the benefits enjoyed by those in long-term employment-there was a gradual reduc-tion in the number of individuals employed on a long-term basis. That said, the long-term employment system has not broken down completely, as key workers retained to perform core functions at companies are still protected by long-term employment status.