Informe en el que el Comité pide que se le mantenga informado de la evolución de la situación - Informe núm. 376, Octubre 2015

1. 586. The complaint is contained in communications dated 6 November 2013 and 31 January 2014, presented jointly by the National Confederation of Trade Unions (ZENROREN), the Japan Federation of National Service Employees (KOKKOROREN) and the All Health and Welfare Ministry Workers’ Union (ZENKOSEI).
2. 587. The Government submitted its observations in communications dated 21 May and 2 October 2014 and 8 April 2015.
3. 588. Japan has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants’ allegations

1. 589. In a communication dated 6 November 2013, the complainants alleged that the Government failed to comply with its obligations under Conventions Nos 87 and 98 when it dismissed 528 employees of the Social Insurance Agency (SIA) in December 2009.
2. 590. According to the complainants, the public pension service was ensured by the Ministry of Health, Labour and Welfare (hereinafter referred to as the MHLW) and its external organ, the SIA. The SIA employees were therefore subject to the application of the National Public Service Law. In July 2007, the Government enacted the Japan Pension Service Law which stipulated that the SIA would be abolished on 31 December 2009, and that the Japan Pension Service Organization would be established to take over all the SIA’s operations starting from 1 January 2010. The Japan Pension Service Law did not provide for automatic continuation of employment of SIA employees in the Japan Pension Service Organization. Instead, the employees of the new organization were to be hired as “new employees” through the selection of former SIA employees who wanted to continue to work in the new organization.
3. 591. Furthermore, the complainants indicated that in July 2008 the Government adopted in a Cabinet meeting the “Basic Plan” for the creation of the Japan Pension Service Organization including its hiring criteria and the number of workers to be hired by the new organization. According to the “Basic Plan”, SIA employees who had a past record of being subject to disciplinary punishment, regardless of the motif of that punishment, would not be hired by the new organization. For that reason, over 1,000 SIA employees in total found themselves disqualified for hiring by the Japan Pension Service Organization. A number of these employees had a record of disciplinary punishment for union activities. Finally, on 28 December 2009, the Director of the SIA notified 528 employees that their employment would be terminated on 31 December in accordance with article 78, paragraph 4, of the National Public Service Law.
4. 592. According to the complainants, in 2004 a drastic reform was made in the public pension system, consisting of cuts in the amount of pension on one hand and increase in people’s contributions to the pension fund on the other, which provoked a mounting popular criticism of the management of the pension system in place. At the same time, a large number of errors and mistakes found in the individual pension records was revealed to the public. The scandals – which also concerned a number of ministers and members of the Diet – increased the distrust of the population in the public pension system. The complainants indicated that the Government claimed that the cause of the problems related to pension records was to be found in the employee organizations and shifted the responsibility for the calamitous management of pension records onto the trade unions (that is the SIA section of the All Japan Prefectural and Municipal Workers’ Union (JICHIRO) and ZENKOSEI). Since then, the Government adopted a hostile attitude towards the trade unions and alleged that the non-payment of contributions to the public pension fund by ministers and Diet members was exposed due to the leak of individual pension records from the SIA under the influence of tense labour–management relations. The Government ultimately denied all trade union rights that had so far been accorded to the trade unions within the SIA.
5. 593. According to the complainants, since Japanese state employees have been denied the right to strike and the right to conclude labour agreements under the National Public Service Law, the trade unions were unable to take any efficient action such as strike when the dismantling and privatization of the SIA was announced and could not resist effectively the massive dismissals.
6. 594. Government hostility towards the SIA trade unions was clearly illustrated by the abolition of the practice of consultation with trade unions. The SIA authorities used to have prior consultations with the trade unions, through memoranda and written confirmation, before notifying the personnel about the changes in working conditions, but they unilaterally abolished this practice in March 2004. The trade unions were unable to get involved in determining changes in a context of deteriorating working conditions during the period when the workloads increased considerably with the problem of missing pension records.
7. 595. Moreover, the complainants indicated that strong popular criticisms grew against those who were managing the pension system, especially the then ruling party which eventually lost the 2004 House of Councillors election. The party attributed the cause of its electoral defeat to the disclosure of pension records by SIA employees and decided to drastically transform the SIA. While a working group to discuss about the new organization for social insurance service was set up, the latter put into question the practice of “written confirmation” exchanged between SIA authorities and the trade unions concerning working conditions. It affirmed that it was “the unions that provided the documents related to non-payment of pension contributions to the opposition parties”; consequently “it was impossible to maintain normal industrial relations with anti-state unions”.
8. 596. According to the complainants, bodies established during the transformation process, that is the “Committee of Experts for a New Social Insurance Organization” or the “Committee for Organizational Revival of Pension Service” undertook hearings of the SIA trade unions. However, these hearings were more to pin down the trade unions’ responsibility for various problems of pension service, than listen to their views.
9. 597. Furthermore, the complainants denounced repeated investigations into cases of breach of working regulation targeted to union activities. Following the enactment of the Japan Pension Service Law, the Government (Chief Cabinet Secretary via Committee for Organizational Revival of Pension Service) instructed the SIA to conduct personnel management investigation of the past ten years regarding unauthorized full-time union officers, union activities undertaken during working hours, political actions, side jobs, tardiness, absence from work, etc. Investigations focused on union activities were conducted persistently on the pretext of “breach of working regulations”. A Committee for Investigating Working Regulations Breach was established under the MHLW. As a result, disciplinary measures were imposed on 31 employees, ten managers and two general managers.
10. 598. The complainants also denounced the fact that the Government decided unilaterally to bring criminal charges against “unauthorized full-time union officers” although SIA management had accepted without going through legally defined procedures that union members take part in union activities within working hours. The Tokyo District Prosecutor’s Office, however, decided not to prosecute them.
11. 599. While the Committee for Investigating Working Regulations Breach in its final report recommended that “it should be made possible for SIA employees who have records of disciplinary punishment to be hired as fixed-term employees of the Japan Pension Service Organization”, the ruling party and its allies objected to the recommendation and insisted that “these employees should not be hired even as fixed-term employees”. The Japan Federation of Bar Association and other organizations of jurists expressed their strong criticism against the denial of hiring on the ground of past punishment record which would constitute “double jeopardy”. The Government ignored the criticism and adopted in July 2007 in a Cabinet meeting the “Basic Plan” that laid down the policy of denying to SIA employees who would have a record of disciplinary punishment whatsoever the possibility to be hired in the Pension Service Organization.
12. 600. The complainants stated that despite the fact that SIA workplaces had shortage of staff, the Government fixed in the “Basic Plan” a number of employees to be recruited by the Japan Pension Service Organization which was inferior to the number of SIA employees. But it also decided to hire 1,000 new workers from the private sector. In fact, when the Japan Pension Service Organization was inaugurated in January 2010, there were still over 300 posts to be filled, which had considerable negative impacts on a smooth delivery of pension services.
13. 601. The Government established “Headquarters for Employment Adjustment” to avoid dismissals in the event of “redundancy” following the reduction of posts in national public service, through employees’ transfers among the ministries and governmental agencies. However, the Government explicitly refused to refer SIA employees with records of disciplinary punishment to the “Headquarters for Employment Adjustment”. This led to the massive dismissals of December 2009.
14. 602. The SIA employees were thus terminated in the context of open hostility of the Government against SIA trade unions and repeated violations of their right to organize, in violation of Convention No. 87, while many employees with a record of disciplinary punishment were punished for “peruse of pension records for unintended purposes” and were subject to prejudicial treatment on the ground of their union activities in violation of Convention No. 98.
15. 603. The complainants mentioned some cases of ZENKOSEI members who were punished for being “unauthorized full-time union officers” and were consequently dismissed, but where the National Personnel Authority (NPA) annulled their disciplinary punishment. This illustrated how unfair it was to exclude without distinction all SIA employees with disciplinary records from the hiring process of the new pension service organization. According to the complainants, 46 former SIA employees in total have taken their cases to the NPA to date. The NPA accorded 16 of them the annulment of dismissal for lack of effort made by the MHLW to avoid dismissal. So far, the Government has complied with the NPA decision and reinstated the employees concerned as state employees. However, the Government still refuses to withdraw the dismissal order for other employees in a similar situation.
16. 604. The complainants referred extensively to disciplinary actions and dismissals of three individuals, Mr Hiroyuki Kawaguchi, Mr Kunihiko Nakamoto and Mr Kazuo Kitakubo. All three were employees of the Kyoto Social Insurance Bureau as well as officers of ZENKOSEI. All three were subject to investigation through questionnaires and hearings regarding violation of the Public Service Regulations and unauthorized union activities.
17. 605. Mr Kawaguchi (Secretary-General of the ZENKOSEI branch) was subject to investigation from December 2007 to January 2008. In April 2008, the SIA submitted a report of investigations on the cases of violation of Public Service Regulations by SIA employees. This report stated that “Mr Kawaguchi denied his involvement in unauthorized union activities”. However, “given the testimonies of his managers and co-workers as well as the supporting evidences including evidences of sharing of administrative duties, approval documents and business trips, it can be reasonably admitted that he was engaged in unauthorized union activities”. This report indicates that the SIA, while acknowledging that the managers had authorized “union activities within duty hours”, accused Mr Kawaguchi of having engaged in “unauthorized union activities”. In the complainants’ opinion, this clearly illustrates that the investigation was incriminatory from its start against Mr Kawaguchi.
18. 606. On 30 July 2008, the SIA via its local office in Kyoto sent a questionnaire to Mr Kawaguchi inquiring the name of the person who was responsible for giving the order for union activities. However, the questionnaire stated that the SIA considered that if Mr Kawaguchi were carrying on union activities on his own initiative, he himself should be considered as the one who decided and executed unauthorized union officer activities. Mr Kawaguchi replied to the questionnaire on 31 July stating that “an action policy or activity policy of the trade union are not something that is decided upon the order of a particular individual”.
19. 607. On 9 September 2008, the Director of the SIA local office in Kyoto announced the disciplinary punishment decided for Mr Kawaguchi who was handed a document specifying the disciplinary measure taken against him (20 per cent cut of monthly salary for two months) and a letter explaining the details of that measure. The Commission on Public Service Regulations Violation issued a report in November 2008 calling for caution for bringing penal charges against unauthorized union officers. However, in December 2008, penal charges were brought by the authorities at Tokyo District Public Prosecutors’ Offices against Mr Kawaguchi and 39 other SIA employees working in Tokyo, Osaka and Kyoto for breach of article 247 of the Penal Code.
20. 608. With regard to the investigations concerning Mr Yamamoto (Head of the ZENKOSEI Kyoto Branch) and Mr Kitakubo (former ZENKOSEI Branch Secretary), the complainants indicated that the SIA local office in Kyoto sent a questionnaire to the two union officers on July 2008. The questionnaire included questions such as “Were you aware of the union activities carried on in SIA Shimogyo Branch Office?”, or “Who instructed the union activities carried on in SIA Shimogyo Branch Office?”. They were intended to identify the person responsible for giving orders for “unauthorized union activities” or “union activities within duty hours”. The two union officers replied to the questionnaire on 10 July and explained that the union activities they had carried out were not unauthorized union activities but legal activities within duty hours, authorized by the management. They also indicated that they carried out these activities within the limit of what was allowed by the management without being instructed by any particular individual. Between 23 and 28 July, both union officers received three consecutive questionnaires which aimed at determining among managers the particular individual responsible for authorizing their union activities. The reply was “it is not possible to tell precisely from whom the authorization came”.
21. 609. Lastly, on 30 July 2008, the SIA local office in Kyoto sent a questionnaire to Mr Yamamoto inquiring as to the name of the person responsible for giving the order for union activities. However, the questionnaire already testified the intent of the authorities to impose the conclusion that Mr Kawaguchi was engaged in unauthorized union activities. Mr Yamamoto replied to the questionnaire that “the union policy is not decided by somebody’s order”.
22. 610. On 9 September 2008, the Director of the SIA local office in Kyoto announced the disciplinary punishment decided for Mr Kitakubo who received a document specifying the disciplinary measure taken against him (20 per cent cut of monthly salary for two months) and a letter explaining the details of that measure.
23. 611. As a result of the investigations conducted on SIA employees concerning violation of Public Service Regulations, the respondents were said to have given the name of Mr Kunihiko Nakamoto (Vice-President of the ZENKOSEI branch) as the person engaged in unauthorized union officer activities. In February 2009, the Head of General Affairs Section of SIA local office in Kyoto instructed the Director of Kamigyo Social Insurance Branch Office to have Mr Nakamoto answer the questionnaire on Public Service Regulations violation. Mr Nakamoto replied that he had not been engaged in unauthorized union officer activities. On 15 July 2009, the SIA local office in Kyoto again instructed the Director of Kamigyo Social Insurance Branch Office to hear Mr Nakamoto. The hearing of Mr Nakamoto was carried out at the SIA local office. As he had not heard about the investigation before, Mr Nakamoto could not sufficiently stir up his memory to answer the questions asked. Nevertheless, to the question “in a month, how do you allocate your working time between your professional work as social insurance agent and the work as the general secretary of your union”, he replied “About half-and-half, I believe”. He explained that, more concretely, he was taking part in the inspection of actual salaries indicated in the income declaration used for determining the insurance premiums and the amount of pension the insured will receive in future. On 31 July 2009, the Director of the SIA local office in Kyoto announced the disciplinary punishment of Mr Nakamoto and handed him the document specifying the disciplinary measure applied to him (20 per cent cut of monthly salary for two months) and some explanation about the punishment.
24. 612. Finally, on 25 December 2009, Director of the SIA local office in Kyoto handed to Mr Kawaguchi, Mr Kitakubo and Mr Nakamoto the documents regarding their change of status and explanation of the disciplinary measure, announcing that they would be dismissed after 31 December 2009 in accordance with article 78-4 of the National Public Service Law.
25. 613. Furthermore, the complainants referred to the court trials and other legal procedures following the sanctions against the ZENKOSEI officers and their outcome. In this regard, on 3 September 2008, a formal objection was filed before the NPA by virtue of the National Public Service Law provisions, asking for the annulment of the disciplinary measure of 20 per cent salary cut for two months, taken by the Director of the SIA local office in Kyoto against Mr Kawaguchi and Mr Kitakubo. The NPA Appeal Committee examined the cases during a four-day hearing in April 2009 with examination, cross-examination and re-examination by the Committee of SIA witnesses. The examination ended at the end of June 2009. The NPA resumed the examination without prior notice in December 2009 which consisted of inquiring in writing to Mr Kitakubo and Mr Kawaguchi about inducing union activities. On 1 September 2011, the NPA concluded the examination. On 10 September 2011, Mr Kitakubo received a letter from the NPA announcing that “the disciplinary measure taken for him would be cancelled”. While Mr Kawaguchi received a letter from the NPA stating “the disciplinary measure for him is approved”.
26. 614. The complainants indicated that Mr Kawaguchi and Mr Kitakubo, after having filed the official objection against the decision of the NPA, lodged on 27 February 2009 a lawsuit in the Kyoto District Court calling for the annulment of the disciplinary measures applied to them. The District Court held a total of 13 hearings. As the NPA had cancelled the disciplinary measure against him on 10 September 2011, Mr Kitakubo withdrew the lawsuit. On 28 September 2011, the District Court finally handed down its decision to dismiss the objection lodged by Mr Kawaguchi. Dissatisfied with the court decision, he appealed to the Osaka High Court, which decided to dismiss the appeal by a decision of 12 March 2012. Mr Kawaguchi took his case to the Supreme Court which rejected the appeal on 12 November 2012.
27. 615. On 24 September 2009, Mr Nakamoto filed a formal objection before the NPA seeking the annulment of the disciplinary action of 20 per cent salary cut for two months applied by decision of the Director of the SIA local office in Kyoto of 31 July 2009. On 1 September 2011, the NPA decided to “approve the disciplinary measure for Mr Nakamoto” and the latter was informed by a letter of 10 September 2011 of the decision of the NPA. Mr Nakamoto, unhappy with the NPA decision, took his case to the Osaka District Court on 15 December 2011. After 11 hearings of witnesses, the trial was concluded on 12 December 2013 and, according to the complainants, the decision was expected on 24 February 2014.
28. 616. The complainants declared that the National Public Service Law in effect today does not guarantee the freedom of union activities to state employees although that freedom is stipulated in the Japanese Constitution. This is why, even if the managers in workplaces have authorized union activities during on-duty hours, in the judgment concerning Mr Kawaguchi, the court stated that “because the complainant was executing duties for the employees’ organization instead of his primary duties as public servant despite that he was receiving salaries from the State, the disciplinary punishment in the present case cannot be considered as illegal. Therefore the complainant must submit to the punishment of two months of salary reduction.” However, the court admits that “what is seen as problematic in this case of disciplinary punishment is that Mr Kawaguchi was dismissed merely because he had the record of disciplinary punishment”. As a matter of fact, the disciplinary measure applied to Mr Yamaguchi and some other SIA employees (two months of salary reduction) was the most severe measure that could be taken in accordance with the disciplinary criteria in place at that time. To make it possible to dismiss them, the SIA had a two-step disciplinary scheme consisting of salary cut and dismissal and through that scheme they succeeded in excluding some union leaders from being hired in the new organization. The court decision however questioned the fact that a two-month salary reduction, which is ultimately a minor disciplinary punishment, has led to the public service employees losing their public servant status. The court rulings of the second and third instance have also sustained this questioning.
29. 617. The complainants observed that, on 18 January 2010, 15 SIA employees dismissed in Kyoto lodged formal objections before the NPA calling for the annulment of their dismissal. On 24 October 2013, the NPA announced its decision cancelling the dismissal of three people including Mr Kitakubo and Mr Nakamoto, and sustaining the dismissal of 12 other people including Mr Kawaguchi. Mr Kitakubo, whose dismissal was cancelled, was reinstated in the Kamigyo Pension Office of the Japan Pension Services and Mr Nakamoto was appointed to the Kinki Regional Office in Kyoto of Health and Labour Ministry, both in December 2013. However, Mr Kitakubo and Mr Nakamoto upheld their compensation claims filed when their dismissal was annulled. The next hearing is expected on 24 February 2014.

B. The Government’s reply

1. 618. In a communication dated 21 May 2014, the Government referred to the background behind the abolishment of the SIA. The SIA was established in July 1962 as an extra-ministerial bureau of the MHLW. Until its abolishment at the end of 2009, the SIA was responsible for overseeing the operation of government-managed health insurance, seamen’s insurance, employees’ pension insurance, as well as the national pension. In addition to its internal bureaus, the SIA included affiliated facilities (the social insurance operation centres and the social insurance college), and local branch offices such as 47 local social insurance bureaus and 312 social insurance offices. A total of approximately 12,500 employees were working for the SIA at the time of its abolishment on 31 December 2009.
2. 619. While poor service and improper operations of the SIA were disputed, a scandal erupted in March 2004. A report alleged that there had been leaks of personal information of individuals who had not paid the national pension fund. This scandal led to the loss of public confidence in the SIA. Although the leaks of personal pension information were never confirmed, it was determined that many individuals had accessed the personal pension information for purposes other than official business. It was also discovered that a number of the employees had violated the National Public Service Ethics Act by accepting gifts from service providers. These individuals would subsequently be disciplined. The public demanded that the SIA should be revamped and in response an “Expert Study on the Functioning of the Social Insurance Agency” was established under the Chief Cabinet Secretary in August 2004. The final report on the SIA Reform Plan was issued in May 2005. As for the organization of the SIA, the final report stated “the panels concluded that it would be appropriate that the public pension system and the government-managed health insurance system be separated, and an organization for each system be established to manage operations”. As for the organization for the public pension system, the report stated “the organization must specialize in operations related to the public pension system, and it must sufficiently fulfil its operational responsibilities with the Government’s direct involvement in all of its operations, including the collection of payments”. In June 2005, an “Expert Study for the Restructuring of the Social Insurance Agency” was established under the supervision of the MHLW. The objectives of this study were to discuss the details and processes for the realization of a new organization. In December 2005, the study summarized the ways to reform the SIA and provided ideas on legal positioning, name, structure and responsibilities for a new organization. They also suggested that the SIA was to be abolished and a brand new organization (a special organization as described in the National Government Organization Act) should be established.
3. 620. Based on the summary, the MHLW submitted the “Public Pension Operation Structure Bill” to the Diet in March 2006. The bill indicated that it should be a special organization established within the organizations of the MHLW and not operated by non-government workers. In May 2006, however, during the course of deliberations of this bill, improper clerical handling of exemptions from the national pension fund was revealed and developed into a national scandal. In December, the bill was scrapped without actually being considered. Many employees of the SIA received disciplinary action for the improper clerical handling of exemptions from the national pension fund.
4. 621. In December 2006, the Council prepared a plan, “Implementation of SIA Reform”, which focused on the abolishment and dismantlement of the SIA and the establishment of a new public organization operated by non-government workers, in order to restructure the administration of the public pension system and to regain public confidence. In addition to these recommendations, the Council clearly expressed that the officers and staff of the SIA should not automatically be assigned to positions in the new organization. Based on the suggestions made by the Council, the MHLW submitted the “Japan Pension Organization Act Bill” to the Diet in March 2007. During deliberations of this bill in the Diet, the absence of provisions regarding the reassignment of the employees of the SIA was also discussed. However, the Prime Minister responded that, in order to regain public confidence in the public pension system, the SIA employees should not be automatically re-employed, and that impartial screening for employment in the new organization should be conducted by an independent third party.
5. 622. In June 2007, the Japan Pension Organization Act (Act No. 109 of 2007, hereinafter referred to as “Organization Act”) was passed. In accordance with this new law, the SIA was to be abolished on 31 December 2009. The new system was to take effect as of January 2010, under which the Government remained responsible for financing and administrative matters regarding public pension, while all clerical operations (including pension application processing, collection of payments, record-keeping, management, consultation and benefit payments) were to be handled by the Japan Pension Service (hereinafter referred to as “Service Office”) that was to be established in accordance with the Organization Act. The objective of the Organization Act was to establish an organization that would recapture public confidence by ensuring that the public pension system was always stably administered based on public confidence, and thereby creating a sense of solidarity with Japanese citizens. The Organization Act included regulations on objectives, organizational structure, operational procedures and preparations for establishment.
6. 623. The Organization Act did not include provisions on the reassignment of SIA employees. Article 8 of the Supplementary Provisions of the Organization Act stipulated that the hiring of SIA employees was to be as follows: the Commissioner of the Social Insurance Agency (hereinafter referred to as “SIA Commissioner”) selects candidates from those who express a willingness to become an employee of the Service Office, in accordance with employment criteria presented by the Committee for Establishment of the Japan Pension Service (hereinafter referred to as “Establishment Committee”). The SIA Commissioner shall prepare and submit a list of candidates to the Committee. The Committee members shall then review the list and select employees for the Service Office. This provision was included in order to avoid the automatic transfer of SIA employees to the Service Office. Due to growing mistrust in operations of the SIA, it was necessary for the Service Office to have its own personnel system and hiring policy in order to establish an organization to respond to the public trust and ensure fair employment opportunities based on individual work performance and other achievements.
7. 624. In August 2007, in order to develop a “Basic Plan for Temporary Business Operations of the Japan Pension Service” (hereinafter referred to as “Basic Plan”), the Government established the “Pension Service/Organization Reform Conference” (hereinafter referred to as “Reform Conference”) under the supervision of the minister in charge of federal/local administrative reform. The missions of the Reform Conference included summarizing the opinions on the organizational structure of the Service Office, outsourcing of operations, hiring policies and determining the necessary number of employees, in order to ensure the Service Office was an organization trusted by the people. In June 2008, after vigorous debates on 33 occasions, the Reform Conference prepared a document entitled the “Basic Policies for Temporary Business Operations of the Japan Pension Service (Final Coordination)” (hereinafter referred to as “Final Coordination”) regarding the organizational structure and staff sizing, hiring of employees and outsourcing of operations of the Service Office. Based on the Final Coordination prepared by the Reform Conference and through discussions with the then ruling party, the Government approved the Basic Plan in a Cabinet meeting held in July 2008.
8. 625. The Government specified that the following points were included in the Basic Plan with regard to staff hiring:
   • (i) Under the basic principles of the Service Office which include securing public trust, responding to the voice of the people, providing improved services, providing for efficiency of operations and ensuring fairness and transparency, individuals hired by the Service Office must be able to correctly and efficiently perform the required tasks for the administration of public pension services, abide by all applicable laws and regulations, and possess the willingness and the capability of instituting required reforms.
   • (ii) With regard to staff hiring at the time of establishment of the Service Office, all members of the Japan Pension Service Staff Screening Committee (hereinafter referred to as “Screening Committee”) organized under the Establishment Committee, and all individuals who conduct hiring interviews under the supervision of the Screening Committee, shall be from the private sector.
   • (iii) In order to regain public trust in the public pension system, SIA employees who have received disciplinary action shall not be employed by the Service Office as either permanent or limited-term employees. (As of April 2008, there were 867 SIA employees that had received disciplinary action.)
   • (iv) In order to establish an organization that will gain the public trust and perform efficient, fair and transparent operations while improving the quality of the services rendered, talented personnel resources from outside the social insurance sector including civilians and other government employees shall be aggressively sought. Individuals who have skills and experience that SIA personnel may not possess, such as for the improvement of business administration, labour management, organizational and IT governance for compliance and internal audit, and business accounting, shall be hired from other fields and assigned to the main positions in each field. Individuals for general operations other than the specific fields mentioned above shall be aggressively hired from the private sector.
   • (v) The required number of staff for the Service Office at the time of establishment shall be approximately 17,830, consisting of 10,880 permanent employees and 6,950 limited-term employees. Approximately 1,000 of the permanent employees shall be hired from non-social insurance fields.
9. 626. As for employees of the SIA that are not employed by the Service Office, the Basic Plan specified that “the Government will consider every possible means, such as encouragement of retirement, transfer to the MHLW or use of the centre for personnel interchanges between the government and private entities (hereinafter referred to as “Personnel Interchange Centre”) to avoid dismissals”.
10. 627. With regard to the hiring process for the Service Office, the Government indicated that the Establishment Committee was formed in November 2008 to handle the requirements necessary for the establishment of the Service Office. On 22 December 2008, the Establishment Committee set the employment qualifications and working conditions for the Service Office and requested the SIA Commissioner to provide this information to SIA employees, advertise for job opportunities at the Service Office, select candidates and submit the list to the Committee.
11. 628. The qualifications for SIA employees who could be hired by the Service Office were as follows:
    • (i) Candidates from the SIA are screened based on their service and performance record, especially how they responded to the pension record scandal, as well as prior experience with restructuring operations.
    • (ii) A candidate from the SIA (including those who had been employed by the SIA and retired before establishment of the Service Office):
      • (a) who has been the subject of disciplinary action shall not be considered for hiring. In the event such discipline is discovered after a job offer is made, such offer shall be withdrawn. In the event such discipline is discovered after he/she is employed, the Service Office shall terminate the employment contract;
      • (b) who has been the subject of corrective action shall be investigated thoroughly as to the details and reason(s) behind the action and her/his rehabilitation process and status; and
      • (c) who has made negative comments on the reform, or shown unwillingness to enact reform, shall be investigated thoroughly on his/her skills and service performance to see if he/she currently possesses sufficient willingness to enact reform. In the event he/she does not cooperate with investigations by the SIA or the fact that he/she has little incentive to enact reform becomes obvious after the job is offered, the Establishment Committee will reconsider his/her employment.
12. 629. The Establishment Committee decided on the staffing size of the Service Office based on the required number of employees specified in the Basic Plan, before job openings were advertised. After the Establishment Committee presented information on qualifications for employment at the Service Office, on 24 December 2008 and on 21 January 2009, the SIA directed the local social insurance bureaus and the social insurance offices (hereinafter collectively referred to as “local social insurance offices”) to distribute that information to all staff. Details of “intention surveys” for all employees of the SIA and the local social insurance offices were explained at a meeting of the directors-general of the local social insurance offices held on 9 January 2009.
13. 630. In particular, the following procedure was explained: the SIA Commissioner checks the intention of each SIA employee to determine if he/she is willing to become an employee of the Service Office, selects candidates from among the individuals who are willing to become employees based on the designated hiring criteria, and submits a list of potential candidates to the Establishment Committee; the Screening Committee reviews and analyses the results of document screening and interviews; and the Establishment Committee makes a final decision on which individuals are to be hired. Job openings in the Japan Health Insurance Association (hereinafter referred to as the “Association”) as well as transfer opportunities to the MHLW were also explained. Then managers such as directors-general and local administrative managers were instructed to provide their employees with an in-depth explanation of job opportunities and the intention survey.
14. 631. In January 2009, all employees of the SIA were required to complete an intention survey to determine if they were willing to work for the Service Office. Then a list of candidates who met the designated hiring criteria was prepared based on the results and submitted to the Establishment Committee. The Screening Committee reviewed the list and other submitted documents and reported its decisions to the Establishment Committee. Between May and December of 2009, the Establishment Committee offered positions at the Service Office to a total of 12,419 individuals.
15. 632. Furthermore, the Government explained the approach and described the measures taken to avoid dismissals. Recalling the approach to be taken to avoid dismissals specified by the Basic Plan: “The Government will consider every possible means, such as encouragement of retirement, transfer to the MHLW or use of the Personnel Interchange Centre, to avoid dismissals of the employees of the SIA who are not employed by the Service Office”; and the Government indicated that the approaches were initiated after approximately 10,000 employees of the SIA received a job offer from the Service Office in May 2009.
16. 633. On 24 June 2009, the SIA Commissioner established the Headquarters for Support of Re-employment of Employees of the SIA (with the SIA Commissioner as the General Manager) in order to promote such approaches. Under the administration of this Headquarters, the Office for Support of Re-employment of Employees of the SIA (at the SIA Headquarters) and the Office for Support of Re-employment of Employees of local social insurance offices (each local social insurance office) were also established.
17. 634. In order to avoid the dismissal of employees of the SIA, the intention of each employee needed to be confirmed. Between June and July 2009, following an announcement of job offers from the Service Office, the Association and the MHLW, those individuals who did not receive a job offer were interviewed. In the interview, the approach to avoid dismissal was explained and an additional intention survey was conducted.
18. 635. Pursuant to the amendment of the Mariners Insurance Act in accordance with the Act Revising a Portion of the Employment Insurance Act (Act No. 30 of 2007), the Japan Health Insurance Association was to assume responsibility for operations of seamen’s insurance effective January 2010. On 25 December 2008, the Association defined working conditions and required qualifications and requested the SIA Commissioner to provide such information to SIA employees, advertise job openings, select and list the candidates, and submit a list no later than February 2009. Following announcement of the hiring information of the Association, the SIA, in January 2009, conducted a survey of all SIA employees to verify their willingness to become an Association employee, as well as their willingness to become an employee of the Service Office, selected and listed candidates based on the results of that survey as well as the hiring criteria of the Association, and then provided that list to the Association. The SIA received information on the Association’s decision to hire 45 individuals as general office employees and notified each SIA employee concerned of the job offer. The Government specified that the Association adopted the criterion set by the Basic Plan that those that have been subject to disciplinary action shall not be hired by the Service Office either as permanent or limited-term employees.
19. 636. Since a portion of the public pension operations was to be carried over from the SIA to the MHLW after the abolishment of the SIA, some SIA employees needed to be transferred to the MHLW in order to ensure such operations went smoothly. In addition, the Basic Plan of the Service Office stated that the SIA was to make a maximum effort to avoid the dismissal of employees that were not employed by the Service Office by reallocating them to the MHLW. For these reasons, the SIA requested the MHLW to employ a certain number of individuals selected from those who wished to be transferred to the MHLW. As a result, 1,284 individuals received a job offer by the end of December 2009. Among these individuals there were some that had been subject to disciplinary action.
20. 637. In addition, in an executive meeting of the personnel management officers of ministries on 8 July 2009, the Director of the Personnel Division of the MHLW Minister’s Secretariat called for other ministries/agencies to cooperate with the reassignment of SIA employees. The Japan Fair Trade Commission and the Financial Services Agency responded to the requests stating that they were willing to accept SIA employees upon consideration of the age structure, job levels, and work locations of their current organizations. The Japan Fair Trade Commission and the Financial Services Agency conducted document screening and interviews of candidates and decided to hire eight and one individual(s) respectively, as of January 2010.
21. 638. Moreover, the Government indicated that on 3 July 2009, the SIA submitted a letter to the Association of Prefectural Governors, Japan Association of City Mayors and National Association of Towns & Villages, requesting that they consider hiring SIA employees whenever a position in a local government office becomes vacant. The local social insurance bureaus also submitted a letter with the same request to local public authorities. However, the SIA did not receive any favourable responses from local public authorities.
22. 639. The Government added that another measure taken to avoid the dismissal of SIA employees was assistance by the Personnel Interchange Centre administered by the Cabinet Office. The SIA explained the necessity to register with the Personnel Interchange Centre to the employees who were willing to seek new employment and encouraged them to do so. The MHLW and the SIA also handed in person or mailed brochures of the Personnel Interchange Centre and letters signed by the Vice-Minister of Health, Labour and Welfare to their associated bodies in order to promote use of the Personnel Interchange Centre for the hiring of SIA employees. As a result, out of 348 individual requests for assistance, 108 individuals were re-employed through the Personnel Interchange Centre.
23. 640. In addition to the use of the Personnel Interchange Centre, the SIA decided to provide its employees with job-hunting assistance using the Public Employment Security Offices, such as by distributing brochures of these offices. On 13 July 2009, the SIA instructed the local social insurance offices to inform their SIA employees of such assistance.
24. 641. Also, in May 2009, the Establishment Committee decided to advertise additional openings for limited-term employees at the Service Office, targeting SIA employees and other outside individuals. The SIA Commissioner provided this information to SIA employees who had not found a job. As a result, 154 individuals received job offers. The Establishment Committee again advertised additional openings for limited-term employees in December 2009. As a result, 60 individuals received job offers.
25. 642. Also in December 2009, the MHLW decided to publicly advertise 200 to 250 non-full-time employee positions in its local branch offices. As a result, 152 individuals received job offers.
26. 643. In June 2009, in order to assist job-hunting activities of SIA employees, the SIA decided to approve encouraged retirement regardless of duration of service (age) of the employee, provided that the employee expressed the intention to accept this encouragement, and notified the local social insurance offices of their decision and informed the employees of the decision.
27. 644. As a result of the above approaches, amongst 12,566 SIA employees, 10,069 were hired by the Service Office, 45 were hired by the Japan Health Insurance Association, 1,293 were transferred to the MHLW and other related organizations, 631 retired with encouragement and three retired for personal reasons by December 2009.
28. 645. The SIA had no other option but to dismiss 525 employees in accordance with article 78, item 4, of the National Public Service Act (Act No. 120 of 1947, hereinafter referred to as “Dismissals-in-Question”) upon the abolishment of the SIA because these employees were neither hired by/transferred to the Service Office, the Association nor the MHLW, nor accepted encouragement of retirement. Among these 525 dismissed employees, 251 had received disciplinary action.
29. 646. The Government added that in accordance with article 5 of the Act on National Public Officers’ Retirement Allowance, the dismissed employees received an amount in addition to the severance pay received by employees who had retired for personal reasons and employees with less than 25 years of service who had retired with encouragement.
30. 647. In view of the above, the Government concluded that the allegations that it made no effort to avoid dismissal upon the dismantling of the SIA are unfounded.
31. 648. With regard to appeals lodged with the Dismissals-in-Question, the Government recalled that when a national public service employee in regular service is subject to disadvantageous disposition such as dismissal, such an employee may enter an appeal against the NPA in accordance with the National Public Service Act. In this regard, 71 individuals out of 525 lodged an appeal with the NPA and all 71 cases were determined between 29 March and 20 December 2013. The NPA approved the dismissal of 46 individuals and annulled the dismissal of 25 individuals. These 25 individuals have had their pre-dismissal status reinstated.
32. 649. The NPA verified the legality and the relevance of the dismissal based on fact-finding and other investigations that they conducted for each appeal. The NPA determined that the dismissals of 25 individuals were not relevant from the point of fairness and equity and annulled the dismissals. This does not, however, mean that the NPA determined that the dismissal decisions taken by the SIA at the time of its abolishment were illegal or irrelevant.
33. 650. The Government indicated that lawsuits seeking nullification of Dismissals-in-Question were filed with the district courts of jurisdiction by 32 out of the above 71 individuals and, except in three cases, were still pending as of February 2014. These three suits were subsequently withdrawn due to the nullification of the Dismissals-in-Question in accordance with the determination by the NPA.
34. 651. With regard to the complainants’ allegations that the Government attributed responsibility for the exposure of the pension record scandal to the National Expenditure Council of JICHIRO (JICHIRO Council), as well as ZENKOSEI, the Government asserted that it never attributed responsibility for the pension record scandal to the JICHIRO Council or any other trade union.
35. 652. The Government indicated that in March 2007, the Japan Pension Organization Act Bill was submitted to the Diet. During the course of deliberations on this bill, the fact that approximately 50 million pension records had not been consolidated with basic pension numbers was revealed, and this problem intensified the scandal. A Pension Record Scandal Investigation Committee was established in June 2007 under the supervision of the Minister for Internal Affairs and Communications. This Committee consisted of seven independent experts and intellectuals, and they were charged with looking into the background, causes and responsibility for the scandal. The investigation report prepared by the Committee, published in October 2007, observed as root causes to the scandal the total lack of a sense of responsibility throughout the organization, both in the MHLW and the SIA, and the SIA’s insufficient awareness of the importance of maintaining accurate pension records. The report outlined four direct factors, among which the generation of inaccurate pension records due to online data input errors, as well as four indirect factors to these causes. The Government observed that the report identified, among the indirect factors, the fact that “the management and the employee organizations of the SIA were not aware of importance of pension records, and were not on the ‘same page’ when it came to improving operations”. Consequently, the Government did not attribute responsibility for the scandal to the trade unions or harbour any hostility towards them. In this regard, the Government claimed that there is no evidence that the SIA employees were terminated in the context of open hostility of the Government against trade unions and repeated violations of their right to organize. Therefore, the allegations that the Dismissals-in-Question violate Article 2 of Convention No. 87 are unfounded.
36. 653. With regard to the complainants’ allegations that the SIA unilaterally discontinued the practice of consultation with the trade unions, the Government explained that members of the “Expert Study on Function of the Social Insurance Agency”, established in August 2004, requested that all agreements between the SIA and the trade unions be submitted to the Study. The SIA submitted all confirmations and agreements between the SIA Commissioner and JICHIRO stretching back to the “Memorandum regarding Implementation of the Nationwide Online Plan” of March 1979. The members of the Study pointed out that confirmations and agreements with the trade unions needed to be reviewed. The SIA consulted with each of the employee organizations and, in November 2004, requested in writing that JICHIRO and ZENKOSEI review and dispose of past confirmations. JICHIRO disposed of 97 confirmations as well as of the ‘‘Memorandum regarding Implementation of the Nationwide Online Plan”. ZENKOSEI disposed of four confirmations. In addition the directors-general of the local social insurance offices disposed of all confirmations they had made and into which they had entered.
37. 654. The notifications from the SIA to the local social insurance offices were to be issued after consultation with, and approval by, the employee organizations. However, since such customary practice was based on a confirmation, the practice was subsequently discontinued after the disposal of the confirmations. The confirmations with the trade unions were disposed of following the SIA’s consultation with the trade unions concerned. Upon disposal, the practice of prior consultation was also discontinued. Therefore, the Government asserted that the SIA did not unilaterally dispose of such confirmations and discontinue the practice.
38. 655. The Government noted the complainants’ allegations that the authorities took disciplinary action against SIA employees for “unauthorized engagement” and “violation of service discipline” despite the fact that the SIA management allowed trade unions officers to conduct union activities during working hours without any legally designated procedure.
39. 656. First and foremost, the Government recalled that article 108-6, paragraph 1, of the National Public Service Act provides that an official may engage exclusively in business of a registered employee organization as an officer of the organization with the permission of the head of the government agency employing him/her. The period for which the permission is effective is deemed as administrative leave and no official shall carry on the business or act on behalf of an employee organization while receiving remuneration as a national public officer (article 108-6, paragraphs 5 and 6, of the National Public Service Act). Moreover, an “unauthorized engagement” is an illegal act in which an employee engages exclusively in the business of an employee organization without designated permission but still receives remuneration from the government even though he/she is not actually carrying out any duties as a national public officer.
40. 657. According to the Government, the Reform Conference, established in August 2007, pointed out there was unauthorized engagement in the SIA and requested it investigate past violations of service discipline. The SIA subsequently investigated violations of service discipline, including unauthorized engagement, during the period between April 1997 and September 2007. Such investigation revealed unauthorized engagement by 30 employees (including two individuals who had already retired). The Reform Conference issued its Final Coordination suggesting that the employees who were involved in unauthorized engagement needed to be punished immediately. In September 2008, the SIA took disciplinary action against 28 employees confirmed by further investigations from the MHLV to have been involved in unauthorized engagement (including one employee who had promoted unauthorized engagement, ten managers who were aware of unauthorized engagement but took no action, as well as two supervisors where the unauthorized engagement had taken place).
41. 658. In July 2008, the MHLW established the “Committee for Investigation on Violation of Service Discipline” made up of independent experts, including attorneys-at-law, under the direct management of the Minister. The investigation team established under this Committee verified the efficacy of the investigation conducted by the SIA, investigated all employees of the SIA, and initiated an investigation to determine violations of service discipline such as unauthorized engagement and union activities within working hours. As a result, the team confirmed that an additional three employees had committed unauthorized engagement. The SIA took disciplinary action against these individuals except for one who had already retired. For officials who were the subject of the complaint but had already retired such as one employee who committed unauthorized engagement, and 28 managers and 26 supervisors who had knowledge of but ignored the unauthorized engagement, the SIA requested that they voluntarily return an amount equal to the reduction in their salary that they would have had, had they been subject to punishment.
42. 659. The Service Investigation Committee also considered criminal prosecution for unauthorized engagement. The Service Investigation Committee report pointed out that the employees who committed unauthorized engagement as well as the individuals who had authority over the payroll of these employees (such as those responsible for maintaining working hour records, the head of payroll division, advance payment clerk, director-general of the Bureau and head of the Office) could be considered as co-principals in a breach-of-trust charge. In December 2008, the MHLW filed criminal complaints with the Tokyo District Public Prosecutors Office against 40 individuals, including the employees who committed unauthorized engagement, on a charge of breach of trust.
43. 660. The disciplinary action in question was taken against individuals who continued to receive remuneration from the Government despite non-performance of duties as a national public officer. The disciplinary action and the criminal complaints were taken or filed not only against employees that had committed unauthorized engagement, but also against managers who were knowledgeable of such engagements and/or who had supervising authority over the payroll of the employees. Therefore, the allegation that disciplinary action was taken against employees involved in union activities is unfounded.
44. 661. Moreover, the Government contested the allegations that employees that had received punishment for non-work-related data access but were dismissed due to union activities. The Government recalled that it did not blame trade unions for the pension record scandal. However, the investigation did reveal that many SIA employees had been unnecessarily accessing personal pension information. In July 2004, 321 employees and 192 supervisors were subject to disciplinary action for non-work-related access to personal pension information. The SIA also looked into the communication history of the SIA online system to see if there was any non-work-related access of the personal pension information on Diet members and celebrities between January and December of 2004. As a result, 2,694 SIA employees and 579 supervisors were disciplined in December 2005.
45. 662. The disciplinary action taken against these individuals was for non-work-related access of personal pension information. It was obvious that no involvement of trade unions was confirmed in this investigation, and no disciplinary action was taken due to an employee’s involvement in trade union activities.
46. 663. The Government also contested the allegations that the dismissals in the present case constitute a violation of Article 1(2) of ILO Convention No. 98. In this regard, the Government observed that the extent of public servants to be excluded from the application of Convention No. 98 under its Article 6 should be determined through a judgment of whether they benefit from statutory terms and conditions of service. This is clear from the discussions during the session of the International Labour Conference that adopted Convention No. 98. The Government added that, in Japan, legislative measures have been taken based on such an assumption, and the Committee on Freedom of Association also expressed on numerous occasions its views to the effect that such a legal system does not pose any problem to the application of Convention No. 98 (see Second Report (paragraph 43), 54th Report (paragraph 179), and 139th Report (paragraph 174)). Employees of the SIA were public servants who benefited from statutory terms and conditions of service. Therefore, those employees were excluded from the application of Convention No. 98 and, as such, the allegations that dismissals in the present case violated Convention No. 98 are unfounded.
47. 664. Furthermore, the Government asserted that the allegations that it agreed in advance during a Cabinet meeting that the Service Office would not hire those who had been subject to disciplinary action thereby excluding the officers of ZENKOSEI from employment with the Service Office have no basis in fact.
48. 665. The Government referred to the disciplinary action and the dismissals of the three individuals raised in the complaint, Mr Kawaguchi, Mr Kitakubo and Mr Nakamoto. The Government recalled that the three were employees of the Kyoto Social Insurance Bureau (KSIB) as well as officers of ZENKOSEI.
49. 666. With regard to Mr Kawaguchi, the Government indicated that in December 2007, after the SIA’s notification, each local social insurance office conducted an investigation into the possibility of violations of service discipline by its employees. After the subsequent investigation, a manager at the KSIB pointed out the likelihood of unauthorized engagement by Mr Kawaguchi. The KSIB requested that Mr Kawaguchi and his supervisor and colleagues respond to a written questionnaire. Mr Kawaguchi was also interviewed. Following the investigation, the KSIB was able to confirm unauthorized engagement by Mr Kawaguchi and, in September 2008, Mr Kawaguchi was disciplined and forced to take a pay cut of 20 per cent for two months.
50. 667. Mr Kawaguchi lodged an appeal before the NPA for the review of his disciplinary action in October 2008. The hearing was held over three days in April 2009 and the investigation resumed in October 2010. Finally, in September 2011, the NPA informed Mr Kawaguchi that it approved the disciplinary action.
51. 668. Mr Kawaguchi also filed a complaint with the Kyoto District Court in February 2009, requesting a revocation of the disciplinary action taken against him. The Court dismissed the complaint in September 2011 stating “as long as this disciplinary action was not illegal, the plaintiff’s claim for revocation has no grounds”. Mr Kawaguchi appealed this decision to the Osaka High Court which dismissed his claim in March 2012 stating “the plaintiff’s claim has no merit; therefore, the original decision of dismissal of the claim was appropriate”. The Court also negated all claims by Mr Kawaguchi. Mr Kawaguchi filed a petition for the acceptance of his appeal to the Supreme Court, which decided on 9 November 2012 not to accept his petition.
52. 669. With regard to his dismissal, the Government recalled that Mr Kawaguchi did not meet the employment criteria for the Service Office since he had been subject to disciplinary action for unauthorized engagement, and was also not selected as a candidate to be transferred to the MHLW due to the result of the screening. Although the KSIB pursued various approaches to avoid dismissal, Mr Kawaguchi was dismissed effective 31 December 2009, upon the abolishment of the SIA.
53. 670. In January 2010, Mr Kawaguchi lodged an appeal before the NPA for the review of his Dismissal-in-Question. The NPA approved the Dismissal-in-Question in October 2013, stating: “Since there is no reason to believe this dismissal was illegal or irrelevant, the dismissal is found to be appropriate.” Mr Kawaguchi filed a suit for revocation of the Dismissal-in-Question with the Kyoto District Court in July 2010. This case was transferred to the Osaka District Court and is currently pending.
54. 671. The Government referred to the complainants’ allegations that “the court decision however questioned the fact that a two-month salary reduction, which constitutes a minor disciplinary punishment, had led the public service employees to lose their public servant status. According to the complainants, the court rulings of the second and third instance have also sustained this questioning.” In the Government’s view, this is a misinterpretation of the facts. The Government recalled that the Kyoto District Court had stated that “the case should be discussed and determined by trial for revocation of dismissal and that this had already been raised,” but the Court also stated, “the fact that the plaintiff was excluded from the employment of the Service Office due to the disciplinary action in question and was subject to a dismissal, equivalent to a dismissal for the purposes of reorganization in the private sector, is questionable” and “the fact that the plaintiff was not hired by the Service Office and was subject to a dismissal is also questionable”. The Government denied however that such propositions were then carried over to the subsequent appeal trials (at the Osaka High Court and the Supreme Court). The Supreme Court rejected the appeal from Mr Kawaguchi and did not accept the petition for the acceptance of the appeal.
55. 672. Concerning Mr Nakamoto, the Government indicated that the Service Investigation Committee discovered the likelihood of an unauthorized engagement. The KSIB then requested Mr Nakamoto and his supervisor and colleagues to reply to a written questionnaire. Mr Nakamoto was then interviewed. The KSIB also investigated the use of Mr Nakamoto’s seal on those documents that were prepared and stored at that time in Operation Division 2 of the Shimogyo Social Insurance Office. As a result of this investigation, the General Director of the KSIB confirmed unauthorized engagement and, on 31 July 2009, Mr Nakamoto was disciplined and forced to take a pay cut of 20 per cent for two months.
56. 673. Mr Nakamoto lodged an appeal before the NPA for the review of the disciplinary action and was informed in September 2011 that the NPA approved the disciplinary action. Mr Nakamoto also filed a complaint with the Osaka District Court in December 2011 requesting revocation of the disciplinary action. The Court dismissed the complaint in February 2014. In its conclusions, the Court stated in particular that: “(i) it appears the plaintiff (Mr Nakamoto) was engaged exclusively in operations of the Kyoto Branch (of ZENKOSEI)”; (ii) for the claim that negotiations with the KSIB in which the plaintiff was engaged were work-related operations, “the business of the Kyoto Branch (of ZENKOSEI) in which the plaintiff was engaged are not part of work-related operations of Operation Division 2, thus they cannot be considered as the business of Operation Division 2”; and (iii) for the claim that disciplinary action was taken for an unjustifiable purpose, “it cannot be confirmed that the purpose of this action was to prevent the plaintiff from being employed by the Service Office, and that the result (the fact that the plaintiff was not hired by the Service Office) did not stem from this disciplinary action”. Mr Nakamoto appealed this decision but the Osaka High Court sustained the lower court’s decision. On 14 October 2014, Mr Nakamoto brought his case before the Supreme Court.
57. 674. Although Mr Nakamoto had expressed the wish to be employed by the Service Office, the decision on his hiring was suspended because the Service Investigation Committee had discovered that the KSIB was investigating his possible unauthorized engagement. Since Mr Nakamoto subsequently received disciplinary action for his unauthorized engagement, the Service Office did not hire him due to the fact that he did not meet the employment criteria. Mr Nakamoto also wished to be transferred to the MHLW, but he was not selected as a candidate to be transferred to the Ministry as a result of screening which also included an interview. Although the KSIB pursued various other approaches to avoid dismissal, Mr Nakamoto was dismissed effective 31 December 2009 upon the abolishment of the SIA.
58. 675. Mr Nakamoto lodged an appeal before the NPA for the review of his Dismissal-in-Question. In October 2013, the NPA decided to annul the Dismissal-in-Question on the ground that “the dismissal was not relevant from the point of fairness and equity”. However, the Government clarified that this does not mean that the NPA determined that the Dismissal-in-Question was illegal. Since the NPA nullified the Dismissal-in-Question, Mr Nakamoto subsequently withdrew his suit for revocation of the Dismissal-in-Question, while his claim for national compensation for his Dismissal-in-Question is still pending before the Osaka District Court.
59. 676. With regard to the situation of Mr Kitakubo, the Government indicated that when Mr Kawaguchi, who was found to be involved in unauthorized engagement, became the Secretary-General of the ZENKOSEI branch, Mr Kitakubo was the branch leader of the organization to which Mr Kawaguchi reported. The KSIB conducted a written survey to investigate Mr Kitakubo’s involvement as a branch leader in Mr Kawaguchi’s unauthorized engagement upon his assumption of the office of Secretary-General. Mr Kitakubo was asked in the survey, “When you asked Mr Kawaguchi to be the Secretary-General, did you tell him that he might need to engage in union activities during working hours?” On 24 July 2008, Mr Kitakubo replied the following: “I understood he needed to stop regular work around the time of negotiations with authorities since he was a contact for the negotiations. I think I asked him to assume the position, saying, ‘the Secretary-General is not an easy job but I count on you’.” Based on his answers, the Director-General of the KSIB deemed the actions taken by Mr Kitakubo led Mr Kawaguchi to become involved in unauthorized engagement, and Mr Kitakubo was disciplined with a pay cut of 20 per cent for two months in September 2008.
60. 677. Mr Kitakubo lodged an appeal before the NPA in October 2008 for the review of his disciplinary action. In September 2011, the NPA cancelled the disciplinary action, on the grounds that: “There is not enough evidence to support the accusation that Mr Kitakubo encouraged Mr Kawaguchi’s unauthorized engagement at the time he asked Mr Kawaguchi to be an officer of the branch office. The disciplinary action involving a reduction in Mr Kitakubo’s pay should be cancelled.”
61. 678. Since prior to the NPA decision Mr Kitakubo had received disciplinary action, he no longer met the employment criteria for the Service Office and was not included in the list of candidates prepared by the SIA Commissioner. Mr Kitakubo then requested to be transferred to the MHLW, but he was not transferred after screening which included an interview. Although the KSIB pursued various other approaches to avoid dismissal, Mr Kitakubo was dismissed effective 31 December 2009, upon the abolishment of the SIA. Mr Kitakubo lodged an appeal before the NPA which cancelled the Dismissal-in-Question in October 2013 on the ground that “It is irrelevant to maintain the dismissal for an individual whose disciplinary action has been cancelled, who, at the time of the dismissal, had lost an opportunity to be an employee of the Service Office as he was excluded from the Service Office employee candidates’ list prepared by the SIA Commissioner due to having been subject to disciplinary action. For this reason, the dismissal decision should be annulled.” As a result of the cancellation of the Dismissal-in-Question by the NPA, Mr Kitakubo withdrew his suit for disaffirmance of the Dismissal-in-Question which was pending before the Osaka District Court. However, his claim for national compensation was still pending.
62. 679. In a broader view, the Government recalled that, after the Reform Conference pointed out the possibility of unauthorized engagement, an investigation was conducted and signs of unauthorized engagement at social insurance bureaus in Tokyo, Kyoto and Osaka were found. Disciplinary action was taken against individuals who were involved in such engagement, including managers of the social insurance bureaus, others that were knowledgeable of the practice but failed to report it, as well as some trade union members who were found to have encouraged such engagement. Individuals who were subject to disciplinary action but had already retired were asked to voluntarily return an amount equal to the reduction in their salary that they would have had, had they been subject to punishment.
63. 680. The Government declared that those disciplined for unauthorized engagement were only from three social insurance bureaus out of 47, and included the branch managers of those bureaus as well. Furthermore, dismissals could have been avoided had those individuals been accepted for transfer to the MHLW, although individuals subject to disciplinary action were not eligible to be employed by the Service Office. Consequently, in the Government’s view, the allegations that the authorities forced the dismissals of trade union members due to the result of a Cabinet decision that prevented the Service Office from employing anyone who had been subject to disciplinary action for unauthorized engagement or other reasons is unfounded.
64. 681. In its communication dated 8 April 2015, the Government recalled that, out of 525 dismissed employees upon the dismantling of the SIA, 71 filed an application for review with the NPA. There were also several lawsuits filed (actually 32 employees filed action before the District Court). The Government referred to the motion for a reversal of the dismissal and award of monetary damages for pain and suffering filed by 15 individuals who worked at a social insurance office or other locations within the jurisdiction of the KSIB, and indicated that the Osaka District Court rendered its judgment on 25 March 2015. The Court did not find the dismissals to be illegal and therefore dismissed the motion, finding in favour of the Government. The Court explained the reasoning behind its decision as follows: (i) the dismissal of SIA employees, including the plaintiffs, was due to elimination of all bureaucratic positions at the SIA upon its dismantlement. The dismissals in question were in accordance with article 78, paragraph 4, of the National Public Service Act; (ii) the Court did not find that efforts made by the SIA Commissioner and other officials to avoid such dismissals were insufficient; (iii) the dismissals of employees, including the plaintiffs in this case, were not triggered by the history of disciplinary punishment. Therefore, the Court did not find the dismissals to be “double punishment”; (iv) the Court did not find sufficient cause to believe that the disciplinary action towards the plaintiffs was inappropriate; (v) the Court did not find any reason to believe that the Government had an unwritten policy to dismiss SIA employees who had a history of disciplinary action; (vi) the Court recognized that the SIA Commissioner and other SIA officials provided all dismissed employees with adequate information whenever necessary and conducted surveys on their intention of re-employment or resignation on several occasions; and (vii) the Court recognized that the SIA Commissioner and other SIA officials, upon dismantlement of the SIA, discussed with and provided employee organizations/unions with explanations of dismissal conditions, as well as measures that could be taken to avoid such dismissals.
65. 682. The Government assumed that the plaintiffs would challenge the ruling by the Osaka District Court. However, the Government indicated that, as of 6 April 2015, no appeal by the plaintiffs has been filed. Furthermore, there are still 14 cases currently under litigation at the District Court level.

C. The Committee’s conclusions

1. 683. The Committee notes that this case concerns allegations of open hostility of the authorities against trade unions of SIA which resulted in anti-union dismissals of employees following the dismantling of the SIA because, in line with the hiring criteria established by the Government, the successor organization (Japan Pension Service) could not re-hire SIA employees with a record of disciplinary action, and such punishment had in the past often been imposed due to the exercise of legitimate trade union activities.

Background to the case: The dismantling of the SIA

1. 684. The Committee notes from both the complainants and the Government that the present case takes place in the context of an important change to the public pension service administered by the MHLW and its external organ, the SIA. When poor service and improper operations of the SIA were disputed, a scandal erupted in March 2004. A report alleged that there had been leaks of personal information of individuals who had not paid into the national pension fund. This scandal led to the loss of public confidence in the SIA. At that time, the public demanded that the SIA should be revamped, and in response an “Expert Study on the Functioning of the Social Insurance Agency” suggested, in December 2005, that the SIA be abolished and a brand new organization (a special organization as described in the National Government Organization Act) should be established. In December 2006, the Council prepared a plan, “Implementation of SIA Reform”, which focused on the abolishment and dismantlement of the SIA and the establishment of a new public organization. The Council clearly expressed that the officers and staff of the SIA should not automatically be assigned to positions in the new organization. Based on the suggestions made by the Council, the MHLW submitted the “Japan Pension Organization Act Bill” to the Diet in March 2007. During deliberations of this bill in the Diet, the absence of provisions regarding the reassignment of the employees of the SIA was also discussed. However, the Prime Minister responded that in order to regain public confidence in the public pension system, the SIA employees should not be automatically re-employed, and that impartial screening for employment in the new organization should be conducted by an independent third party.
2. 685. In June 2007, the Japan Pension Organization Act (Act No. 109 of 2007) was passed. In accordance with this new law, the SIA was to be abolished on 31 December 2009. The new system was to take effect as of January 2010, under which the Government remained responsible for financing and administrative matters regarding public pension, while all clerical operations (including pension application processing, collection of payments, record-keeping, management, consultation and benefit payments) were to be handled by the Japan Pension Service (Service Office) that was to be established in accordance with the Organization Act. The objective of the Organization Act was to establish an organization that would recapture public confidence by ensuring that the public pension system was always stably administered based on public confidence, and thereby creating a sense of solidarity with Japanese citizens. The Organization Act included regulations on objectives, organizational structure, operational procedures and preparations for establishment.
3. 686. In August 2007, in order to develop a “Basic Plan for Temporary Business Operations of the Japan Pension Service” (Basic Plan), the Government established the “Pension Service/Organization Reform Conference” (hereinafter referred to as “Reform Conference”) under the supervision of the minister in charge of federal/local administrative reform. The missions of the Reform Conference included summarizing the opinions on the organizational structure of the Service Office, outsourcing of operations, hiring policies and determining the necessary number of employees, in order to ensure the Service Office was an organization trusted by the people.
4. 687. In June 2008, the Reform Conference prepared a document entitled the “Basic Policies for Temporary Business Operations of the Japan Pension Service (Final Coordination)” regarding the organizational structure and staff sizing, hiring of employees, and outsourcing of operations of the Service Office. Based on the Final Coordination prepared by the Reform Conference and through discussions with the then ruling party, the Government approved the Basic Plan in a Cabinet meeting held in July 2008.
5. 688. Until its abolishment at the end of 2009, in addition to its internal bureaus, the SIA included affiliated facilities (the social insurance operation centres and the Social Insurance College), and local branch offices such as 47 local social insurance bureaus and 312 social insurance offices. A total of approximately 12,500 employees were working for the SIA at the time of its abolishment on 31 December 2009. The required number of staff for the Service Office at the time of establishment was expected to be approximately 17,830, consisting of 10,880 permanent employees and 6,950 limited-term employees. Approximately 1,000 of the permanent employees were to be hired from non-social insurance fields. With regard to the hiring process for the Service Office, the Government indicated that the Establishment Committee was formed on November 2008 to handle the requirements necessary for the establishment of the Service Office. The Establishment Committee defined the qualification standards for employees of the Service Office. The SIA Commissioner was to select and submit a list of qualified candidates from among those that showed willingness to become an employee of the Service Office.
6. 689. As for employees of the SIA that are not employed by the Service Office, the Basic Plan specified that “the Government will consider every possible means, such as encouragement of retirement, transfer to the MHLW or use of the centre for personnel interchanges between the Government and private entities (hereinafter referred to as “Personnel Interchange Centre”) to avoid dismissals”. The Committee notes that as a result of that approach, the Government reported the following achievement upon the dismantling of the SIA by December 2009: among 12,566 SIA employees, 10,069 were hired by the Service Office, 45 were hired by the Japan Health Insurance Association, 1,293 were transferred to the MHLW and other related organizations, 631 retired with encouragement, and three retired for personal reasons.
7. 690. In this regard, the Committee takes due note of the detailed statistics provided by the Government concerning all the measures taken to prevent dismissals of the SIA employees upon its dismantling. It notes that collective dismissal has affected 525 employees out of 12,566. The Committee emphasizes in this regard that it is not within its purview to pronounce itself on allegations relating to restructuring programmes, even when these involve collective dismissals, unless they have given rise to acts of anti-union discrimination or interference. Stressing, however, the importance of maintaining sound labour relations that would ensure that workers are not deprived of their fundamental rights and means of furthering and defending interests, the Committee will examine the specific allegations of anti-union discrimination and interference raised in this case.
8. 691. Moreover, while taking due note of the Government’s declaration that the extent of public servants to be excluded from the application of Convention No. 98 under its Article 6 should be determined through a judgment of whether they benefit from statutory terms and conditions of service, which according to the Government was the case for the employees of the SIA, the Committee recalls that it has on numerous occasions examined allegations relating to anti-union discrimination against public servants and recalls the general principle that where public servants are employed under conditions of free appointment and removal from service, the exercise of the right to freely remove public employees from their posts should in no instance be motivated by the trade union functions or activities of the persons who could be affected by such measures [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 792].

Open hostility of the authorities against the trade unions of the SIA

1. 692. The Committee notes the complainants’ allegations that the Government claimed that the cause of the problems related to pension records (the 2004 scandal) was to be found in the employee organizations and that it had shifted the responsibility for the calamitous management of pension records onto the trade unions (that is the SIA section of JICHIRO and ZENKOSEI). According to the complainants, since then the Government adopted a hostile attitude towards the trade unions and alleged that the non-payment of contributions to the public pension fund by ministers and Diet members was exposed due to the leak of individual pension records from the SIA under the influence of tense labour–management relations. The complainants further allege that the Government ultimately denied all trade union rights that had so far been accorded to the trade unions within the SIA.
2. 693. According to the complainants, such hostility clearly materialized in the abolition of the practice of consultation with trade unions. The SIA authorities used to have prior consultations with the trade unions, through memoranda and written confirmation, before notifying the personnel about the changes in working conditions, but they unilaterally abolished this practice in March 2004. The trade unions were allegedly unable to get involved in determining changes in a context of deteriorating working conditions during the period when the workloads increased considerably with the problem of missing pension records.
3. 694. Furthermore, the Committee notes that the complainants denounced repeated investigations into cases of breach of working regulation targeted at union activities. Following the enactment of the Japan Pension Service Law, the Government instructed the SIA to conduct personnel management investigations of the past ten years regarding unauthorized full-time union officers, union activities undertaken during working hours, political actions, side jobs, tardiness, absence from work, etc. Investigations focused on union activities were conducted persistently on the pretext of “breach of working regulations”. A Committee for Investigating Working Regulations Breach was established under the MHLW. As a result, disciplinary measures were imposed on 31 employees, ten managers and two general managers. The complainants also denounced the fact that the Government decided unilaterally to bring criminal charges against “unauthorized full-time union officers” although the SIA management had accepted, without going through legally defined procedure, that union members take part in union activities within working hours.
4. 695. The Committee notes the Government’s view that it never attributed responsibility for the pension record scandal to the trade unions. In this regard, the Government indicated a Pension Record Scandal Investigation Committee, composed of independent experts and intellectuals, was established in June 2007 to look into the background, causes and responsibility for the scandal. The investigation report prepared by the Committee, published in October 2007, observed as root causes to the scandal the total lack of a sense of responsibility throughout the organization, both in the MHLW and the SIA, and the SIA’s insufficient awareness of the importance of maintaining accurate pension records. The report outlined four direct factors, among which the generation of inaccurate pension records due to online data input errors, as well as four indirect factors to these causes. The Government observed that the report identified, among the indirect factors, the fact that “the management and the employee organizations of the SIA were not aware of importance of pension records, and were not on the ‘same page’ when it came to improving operations”. The Committee notes the Government’s indication that, on the basis of the report, it cannot attribute responsibility for the scandal to the trade unions or harbour any hostility towards them.
5. 696. With regard to the complainants’ allegations that the SIA unilaterally discontinued the practice of consultation with the trade unions, the Committee notes the Government’s statement that members of the “Expert Study on Function of the Social Insurance Agency”, established in August 2004, requested that all agreements between the SIA and the trade unions be submitted. The SIA submitted all confirmations and agreements between the SIA Commissioner and JICHIRO stretching back to the “Memorandum regarding Implementation of the Nationwide Online Plan” of March 1979. The members of the Study pointed out that confirmations and agreements with the trade unions needed to be reviewed. According to the Government, the SIA consulted with each of the employee organizations and, in November 2004, requested in writing that JICHIRO and ZENKOSEI review and dispose of past confirmations. The notifications from the SIA to the local social insurance offices were to be issued after consultation with, and approval by, the employee organizations. Since such customary practice was based on a confirmation, the practice was subsequently discontinued after the disposal of the confirmations. The confirmations with the trade unions were disposed of following the SIA’s consultation with the trade unions concerned. Upon disposal, the practice of prior consultation was also discontinued.
6. 697. Finally, the Government recalls that article 108-6, paragraph 1, of the National Public Service Act provides that an official may engage exclusively in business of a registered employee organization as an officer of the organization with the permission of the head of the government agency employing him/her. The period for which the permission is effective is deemed as administrative leave and no official shall carry on the business or act on behalf of an employee organization while receiving remuneration as a national public officer (article 108-6, paragraphs 5 and 6, of the National Public Service Act). Moreover, an “unauthorized engagement” is an illegal act in which an employee engages exclusively in the business of an employee organization without designated permission but still receives remuneration from the Government even though he/she is not actually carrying out any duties as a national public officer. The Government indicates that the Reform Conference, established in August 2007, pointed out there was unauthorized engagement in the SIA and requested it investigate past violations of service discipline. The SIA subsequently investigated violations of service discipline, including unauthorized engagement, during the period between April 1997 and September 2007. Such investigation revealed unauthorized engagement of a number of employees who were then disciplined. In the Government’s view, disciplinary actions and criminal complaints were taken or filed not only against employees that had committed unauthorized engagement, but also against managers who were knowledgeable of such engagements and/or who had supervising authority over the payroll of the employees. Therefore, in the Government’s view, the allegation that disciplinary action was taken against employees involved in union activities is unfounded.
7. 698. In view of the information provided, the Committee is not in a position to conclude, as alleged in the complaint, that the labour relations within the SIA were characterised by open hostility of the management and the Government against the trade unions. However, the Committee cannot but express concern regarding the Government’s admission to a discontinuation of the practice of consultation with the trade unions, in particular in view of the context of the transformation process of the SIA which would impact significantly on the workers, including union leaders and unionized workers. While bodies established during the transformation process, that is the “Committee of Experts for a New Social Insurance Organization” or the “Committee for Organizational Revival of Pension Service”, undertook hearings of the SIA trade unions, according to the complainants, these hearings were more to pin down the trade unions’ responsibility for various problems of pension service than listen to their views.
8. 699. In this regard, the Committee wishes to emphasize that it is important that governments consult with trade union organizations to discuss the consequences of restructuring programmes on the employment and working conditions of employees [see Digest, op. cit., para. 1081], and highlights the importance for harmonious labour relations of full and frank consultations on matters affecting the workers’ occupational interests. The Committee expects that the Government will ensure full respect for these principles in the newly established Service Office.

Anti-union dismissals as a result of the re-hiring criteria to the Service Office

1. 700. The Committee notes that the complainants alleged that dismissal of SIA employees was carried out in such a way as to discriminate against trade union officers. In this regard, the complainants indicated that despite strong criticism expressed by the Japan Federation of Bar Association and other organizations of jurists against the denial of hiring on the ground of past punishment record which would constitute “double jeopardy”, the Government adopted, in July 2007, the “Basic Plan” that laid down the policy of denying to SIA employees who would have a record of disciplinary punishment the possibility to be hired in the Pension Service Organization. As a result, SIA employees who had records of disciplinary punishment due to union activity could not even apply for recruitment by the new pension Service Office and were bound to be dismissed.
2. 701. In this regard, from the information provided by the Government, the Committee notes that following the investigation on violations of service discipline, the SIA took action in September 2008 against 30 employees who had been involved in unauthorized engagement (excluding those already retired). The Committee also notes the Government’s assertion that employees disciplined for unauthorized engagement were only from three social insurance bureaus (Tokyo, Kyoto and Osaka) out of 47, and that dismissals could have been avoided had those individuals been accepted for transfer to the MHLW. Furthermore, the Committee notes that upon the abolishment of the SIA, among the 525 dismissed employees, 251 had received disciplinary action while the remaining 274 had never received such punishment. In view of the information available, the Committee is not in a position to sustain that the dismissal of SIA employees due to unauthorized engagement was of an anti-union nature in view of the rehiring criteria to the Service Office. The Committee nevertheless expresses its concern at the apparent lack of clarity concerning the arrangements reported to have been previously agreed at the workplace, and not denied by the Government, which could have given rise to misunderstandings among some trade union officers as to their rights and responsibilities.

Individual cases mentioned in the complaint

1. 702. The Committee takes note of the detailed information provided both by the complainants and the Government on the process which led to the disciplinary action and the dismissal of three ZENKOSEI officers, namely Mr Kawaguchi, Mr Kitakubo and Mr Nakamoto.
2. 703. While noting that Mr Kitakubo, whose dismissal was cancelled by the NPA, was reinstated in the Kamigyo Pension Office of the Japan Pension Services and that Mr Nakamoto was appointed to Kinki Regional Office in Kyoto of Health and Labor Ministry, both in December 2013, the Committee requests the Government to keep it informed of the outcome of the legal actions still pending concerning Mr Kawagushi, as well as the cases for compensation filed by Mr Kitakubo and Mr Nakamoto.