Managing an Ageing Labour Force: The Interplay between Public Policies and the Firm's Logic of Action — The Case of Japan

Abstract

This article analyses the interplay between the firm's logic of action towards older workers and public policy in Japan. It is based on a case study of the Toyota Motor Corporation, using data collected by questionnaire and interview surveys conducted in 1994 and 2002. Toyota's behaviour towards older workers is characterized as “reject and retain”. This means excluding older workers from the company's seniority system in their mid-50s, while retaining them in the group firms. The exclusionary behaviour arises from the logic of the seniority system, while the retaining behaviour arises from the logic of external environments including pressure from the government and the trade union. The “reject and retain” policy can be evaluated as the Japanese-style approach towards the goal of providing longer employment opportunities for older employees through a tripartite sharing of the burden among the state, management and labour. It seems, however, that the preconditions for the approach no longer exist. The rich inner and quasi-inner labour market, which enabled the absorption of older employees, diminished during the long recession which started in 1992 as well as the recent difficult competitive situation.