[Special Feature: Rethinking Japanese "Work Styles"] Keiichiro Hamaguchi: The World Historical Origins of Job-based and Membership-based Models

2023/02/07

The reason I published "What is a Job-based Employment Society?" (Iwanami Shinsho) in September 2021 is that the job-based theories currently popular in the world are riddled with so many misunderstandings and errors. The first thing I want people to recognize is that the job-based model is by no means new; rather, it is quite old-fashioned. Hearing this, you might think, "What are you talking about? Isn't there a popular theory that we should abandon the membership-based model—the old-fashioned, rigid, and low-productivity Japanese employment system—and transition to a flexible, high-productivity, new job-based model?" It is true that many people playing with the term "job-based" today are making such claims, but they are mistaken; the job-based model is older than the membership-based model. To give you an idea of how old it is, it has a history of at least 100 to 200 years. Modern industrial society began in the 18th and 19th centuries starting with Britain and gradually spread to European countries, the United States, Japan, and then Asian countries. The basic structure of corporate organization in this modern society is the job-based model, where people are fitted into jobs.

In contrast, the membership-based concept of assigning work to people was proposed in Japan from the wartime period to the immediate post-war era, established during the high-growth period, and was celebrated as the source of Japan's economic performance for about 20 years from the mid-1970s to the mid-1990s. Since then, however, it has become an outdated "new product" targeted for criticism as the culprit behind the decline of the Japanese economy. As can be seen from this, any discussion about which is inherently superior or inferior—job-based or membership-based—is nothing more than an empty argument merely riding the atmosphere of the times. Compared to the rigid job-based model, the membership-based model is highly flexible, but on the other hand, because it assumes the unlimited working style of young men, it creates social contradictions such as issues for women, the elderly, and non-regular workers, and today lacks sociological sustainability. Therefore, reactionary reforms (Work Style Reform) that deny Japanese flexibility and attempt to introduce Western-style rigidity were required. You can assume that the job-based models peddled by consultants who do not understand this are mostly fake products.

To begin with, the Civil Code, which is the basic legal system of Japan, defines an employment contract as a contract of claim where engaging in labor and the payment of remuneration are the consideration. Workers are trading partners of the company and cannot be members. Therefore, legally, only investors can be called "shain" (members/employees). Even if you search all the laws and regulations of Japan, there is no example of calling workers "shain." Classical labor laws such as the Labor Union Act and the Labor Standards Act, created under occupation immediately after the end of the war, also take the framework that companies and workers are in a transactional relationship as a major premise, adding minimum public regulations to the content of employment contracts or allowing cartels for workers; they are no different in being job-based legal systems.

It is case law doctrine that has filled the gap between this job-based legal system and the reality of society, which regards workers as members of the company. By making full use of general principles of law such as the principle of good faith and the doctrine of abuse of rights, it can be said to be de facto legislation by the judiciary that has adapted the job-based legal system to the reality of a membership-based society. As such case law doctrines accumulated, the principles regulating Japanese labor society became not the articles in the Compendium of Laws (Roppo Zensho), but the norms of actual society appearing in judicial precedents. The reason Japanese labor law textbooks are so complex and mysterious is that they try to explain job-based articles and membership-based precedents as if they were perfectly consistent.

However, some people may have doubts here. Why does the Civil Code treat an employment contract as a contract of claim in the first place? Why isn't it a status contract? The reason is that the French Civil Code, which Japan used as a model for enacting its Civil Code during the Meiji era, was like that. The current Civil Code was enacted in 1896 (Meiji 29), but before that, there was the "Old Civil Code" which was enacted but never enforced. In its provisions, it used the same term "koyo" (employment) as the current Civil Code, but looking at the original draft, it was expressed as "lease of labor and service." This expression is a literal translation of the French Civil Code (Code Napoléon).

Today, a tall tower called the Boissonade Tower stands at Hosei University in Ichigaya. Many of you may know that the Frenchman named Boissonade, whose name remains on this tower, worked hard as a foreign advisor to Meiji Japan to enact the Civil Code. Looking at the original draft of the Old Civil Code, it feels like a complete copy of the French Civil Code. The French Civil Code was enacted in 1804 after the French Revolution and is called the "Code Napoléon." In this code, the lease of things and the lease of labor are still defined under the same concept. Article 1708 at the beginning of Chapter 8, "Lease," of Book 3 states:

There are two kinds of lease contracts: that of things, and that of work.

Il y a deux sortes de contrats de louage: Celui des choses, Et celui d’ouvrage.

The code also includes "lease of livestock," but this is a type of "thing." It further divides the lease of labor into the lease of services (Du louage de service), land and water transport, and estimated contracting; this lease of services corresponds to the employment contract. In short, the French Civil Code, which is the source of the Japanese Civil Code, still positions employment as a lease contract for labor services today.

This idea in the French Civil Code inherits the ideas of ancient Roman law. In Roman law, the lease of things (locatio conductio rei), employment (locatio conductio operarum), and contracting (locatio conductio operaris) were all grouped under the concept of lease (locatio conductio). But why did the Romans come up with such a strange thing as the lease of labor in the first place?

To understand this, it is necessary to remember that the most important form of labor utilization in ancient Roman society was slavery. Slaves are biologically human, but legally they are things and do not have legal personality. Usually owned by free persons and subject to labor under their command and order, this is not a legal relationship. It is just like commanding and working livestock such as horses and cattle; you can do as you please, whether to boil and eat them or roast and eat them. By the way, there was a lease of livestock in the French Civil Code, wasn't there? With the same idea, a lease of slaves is also possible. Legally, it is strictly a lease of things. However, since it is a borrowed thing, you cannot do as you please. You must use it carefully and return it to the owner without damage.

Now, here is Rhodes, let us jump here. What if the master who lends the slave and the slave who is lent are the same person? It takes the form of a human as a master lending himself as a slave in exchange for rent. Since this person is, of course, a free person, this lending contract is a contract between equal personalities. However, the work that the person lent actually does becomes work under the command and order of the borrower, just like a slave does. As the gap between rich and poor widened and free persons began to lend themselves for a living, and also because freed slaves often continued to work under the same former master, this legal form gradually increased. Today's employment contracts have consistently inherited this duality since the labor leasing of ancient Rome. The duality is, namely, the aspect of being a lease contract between completely equal free persons in legal form, and the aspect of being placed under a relationship of dominance and subordination similar to a master employing livestock or slaves in reality. What unifies this duality without contradiction is the legal method of cutting out human labor as if it were a thing and making it the subject of a lease contract.

Incidentally, Chinese law has exactly the same idea as this Roman law idea. What Roman law calls "locatio conductio," Chinese law calls "chinyaku" (lease contract). It is a contract to lend something tangible or intangible in exchange for "chin" (rent/wage). Influenced by this, in Japan, house rent (yachin), labor cost (kochin), wages (rochin), and small tips (odachin) all include the character "chin." In Islamic law, it is said that leasing and employment are collectively called "ijāra." Going back further, it is said that in the cuneiform laws of the ancient Orient, employment and leasing were the same concept.

A legal perception of labor completely different from these Roman and Chinese law ideas is the loyalty service contract (Treudienstvertrag) that developed in medieval Germanic society. This was a contract under status law between a lord and a vassal that appeared around the 8th or 9th century, where the lord owed an obligation to support and protect the vassal, while the vassal owed an obligation to work according to the lord's orders. In that sense, it is a bilateral contract where favor (on) and service (hoko) are in an exchange relationship, but the major difference is that it is not a Roman-style contract of claim, but a contract that establishes the status of lord and vassal. The lord has duties to observe as a lord, and the vassal has duties to observe as a vassal, and the structure is that such duties arise for both parties by entering into such a status relationship through a solemn ceremony performed with hands and mouth. What is important is that while the lord and vassal are not equal and are in a relationship of status-based dominance and subordination, both are free persons and not slaves—that is, not things; in other words, it is a relationship between human and human.

In the early Middle Ages, it was primarily an exchange relationship between military service and the granting of land as a fief, but it eventually spread among the general public, leading to the creation of the servant contract (Gesindevertrag) regulating the relationship between master and servant. While the servant was subject to the master's power and owed an obligation to faithfully follow labor, the master owed an obligation to provide the servant with food, clothing, and shelter, and to protect their person. Hearing this, don't you think it's the same as the history of medieval Japan? In medieval Japan as well, samurai who received fiefs from their lords and engaged in military service for emergencies were in a status-based bilateral relationship of favor and service. The word "hoko" (service), which originally referred to such relationships among samurai, came to be used as-is for labor supply relationships between townspeople, such as apprenticeship (nenki-hoko), in the early modern period, which is analogous to German history. It was the German legal scholar Otto von Gierke, active from the late 19th to the early 20th century, who argued that this servant contract was the origin of the employment contract. He criticized the fact that the German Civil Code was being created based on Roman law ideas represented by the Code Napoléon and insisted on establishing provisions for employment contracts based on the tradition of Germanic law. People who make such arguments are called Germanists, and those on the opposite side are called Romanists. This conflict was summarized by the pre-war Marxist legal scholar Yoshitaro Hirano in his book "Roman Thought and Germanic Thought in Civil Law" (Yuhikaku).

Going back a bit, from the late Middle Ages in the 14th to 16th centuries, Roman law was actively introduced into Germany. This was because Roman law, based on ownership and contracts, was useful for German society at the time, which was transitioning from a feudal society to a market economy. Therefore, labor contracts (Arbeitsvertrag) between guild masters and craftsmen, which once had a strong status-contract color, also gradually strengthened their independence and became free labor contracts. From the late 18th to the early 19th century, civil codes were enacted one after another in various German states—Prussia in 1794, Austria in 1811, Saxony in 1865—all of which, like the French Civil Code, positioned employment contracts as contracts of claim rather than status contracts. Gierke's criticism mentioned above was directed at the fact that the German Civil Code after German unification was also being created in that direction. However, domestic servants were treated as status contracts until quite late, and the servant ordinances were not abolished until 1918 after World War I.

It was Hiroshi Suekawa who introduced Gierke's arguments to Japan. In 1921, after World War I, his paper "Historical Considerations on the Development of Employment Contracts" published in the journal "Hogaku Ronso" introduced Gierke's argument as a so-called progressive way of thinking, moving from individualistic Roman law thought to collectivist Germanic law thought. It can be said that this was not a surprising reaction for Japan, where labor law had hardly developed yet. The fact that Yoshitaro Hirano, who was active as an ideologue for the Japan Communist Party after the war, praised Germanic law thought before the war can also be understood in this context.

However, a very ironic situation unfolded in Germany, the home of these ideas. The Nazi regime, which seized power, defined the employment relationship not as an exchange of labor and remuneration as prescribed by the Civil Code, but as a relationship between a leader and followers in a management community through the National Labor Order Act of 1934. What is noteworthy is that Gierke-style loyalty service contract theory was used for that justification. To be precise, far from Gierke's intention of bringing up the ancient loyalty service contract as a means of reform for capitalist society to preach the employer's obligation to protect workers, it should be said that it was used to grotesquely revive a (sham) status relationship between lord and vassal. Partly due to this reflection, Gierke-style personal community relationship theory fell out of fashion in West Germany after the war.

During wartime Japan, Nazi thought also flowed in from its ally Germany, and even Gentaro Suehiro, who had built up progressive labor jurisprudence before the war, participated in a project called Japanese-style jurisprudence. However, what had a major impact on the world was the wage thought proposed under the name of the Imperial Labor View. Asahi Watanabe of Namiki Manufacturing (now Pilot Corporation) argued in 1940 that wage systems derived from Western-style contract wage theory and labor commodity theory should be blown away across the sea, and that we should return to Japan's original "okyu-kin" (allowance) system. Ironically, it was the labor unions whose establishment was encouraged by GHQ that inherited this living wage thought after the war. The Densan-type wage system of 1946 established a wage system based on age and the number of dependents, and firmly maintained this despite sharp criticism from the Labor Advisory Committee and the World Federation of Trade Unions.

Subsequently, from the 1950s to the 60s, despite the government and especially the management side advocating for a transition to job-based pay based on the principle of equal pay for equal work, it was not realized. Eventually, from the late 1960s, the job-grade system was established under management leadership. It was around this time that the Japanese-style employment system, known as the membership-based model, began to attract attention. This was also the period when pseudo-scientific arguments preaching the economic superiority of the flexible membership-based model over the rigid job-based society became popular.

Needless to say, it was rarely discussed in terms of naked master-servant relationship theory or loyalty service contract theory like in Nazi Germany or wartime Japan, but rather proceeded in a form that put forward a kind of socialist worker protection. However, nevertheless, it is also an undeniable fact that it developed on the implicit premise of the idea of the company as a personal community relationship. This social exchange, in which the stability of life including the family is guaranteed through seniority-based pay raises until retirement in exchange for fulfilling unlimited work obligations in terms of duties, time, and space, smells like a modern version of the medieval exchange contract of favor and service no matter how you look at it.

What is it that created the society of post-war Japan, where the law itself inherits the Roman law tradition and positions employment as a contract to lease the intangible thing called labor, while actual society has established a structure where the company and employees are personally combined to an extent far removed even from Germany, the home of these ideas? By wandering through ancient Rome and medieval Germany, we might find some hints.