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

The reason I published "What is a Job-based Employment Society?" (Iwanami Shinsho) in September 2021 is that the current popular discourse on the "job-based" model is flooded with far too 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 old-fashioned. Hearing this, you might think, "What are you talking about? Isn't there a popular theory that we should move away from the membership-based model—the old-fashioned, rigid, low-productivity Japanese employment system—and transition to a new, flexible, high-productivity job-based model?" Certainly, many people playing with the term "job-based" today are making those kinds of arguments, 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 Britain in the 18th and 19th centuries 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 celebrated as the source of Japan's economic performance for about 20 years from the mid-1970s to the mid-1990s. Since then, it has become an outdated "new product" criticized as the culprit behind the decline of the Japanese economy. As you can see, arguments about which is inherently superior or inferior—job-based or membership-based—are all empty discussions merely riding the spirit of the times. Compared to the rigid job-based model, the membership-based model is highly flexible. However, on the flip side, 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 it lacks sociological sustainability. Therefore, a reactionary reform (Work Style Reform) was required to deny Japanese flexibility and introduce Western-style rigidity. You can assume that the "job-based" models peddled by consultants who do not understand this are mostly bogus 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 the consideration is the engagement in labor and the payment of remuneration. The worker is a business partner of the company and cannot be a "member." 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 a worker a "shain." Classical labor laws such as the Labor Union Act and the Labor Standards Act, created under the occupation immediately after the war, also assume the framework that the company and the worker are in a transactional relationship. They merely add minimum public regulations to the content of the employment contract or allow workers to form cartels; they remain 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 governing Japanese labor society became the norms of actual society appearing in judicial precedents, rather than the articles of the Compendium of Laws (Roppo Zensho). The reason Japanese labor law textbooks are so complex and mysterious is that they try to explain job-based statutes and membership-based precedents as if they were perfectly consistent.

However, some people may have a question 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 in the Meiji era, was that way. The current Civil Code was enacted in 1896, but before that, there was the "Old Civil Code," which was enacted but never implemented. 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 hiring 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 draft of the Old Civil Code, it really 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, "Leases," of Book 3 states:

There are two sorts 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 a "lease of livestock," but this is likely a type of "thing." It further divides the lease of work into the lease of services (Du louage de service), transport by land and water, and contracting for estimates. 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 leasing (locatio conductio). But why did the Romans come up with such a strange thing as the leasing 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, they are owned by free persons and perform labor under their command, but that is not a legal relationship. It is just like commanding livestock such as horses or cattle to work; the owner can do as they please with them. By the way, there was a lease of livestock in the French Civil Code, wasn't there? Using 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 with it. You must use it carefully, not damage it, and return it to the owner.

Now, Hic Rhodus, hic salta (Here is Rhodes, jump here). What if the master who leases the slave and the slave who is leased are the same person? It takes the form of a human as a master leasing himself as a slave in exchange for rent. Since this person is, of course, a free person, this leasing contract is a contract between equal personalities. However, the work actually performed by the person leased is work under the command of the lessee, just like a slave would do. This legal form gradually increased because the gap between rich and poor widened and free persons began to lease themselves for a living, and also because freed slaves often continued to work under the same former master. Today's employment contracts have continuously inherited this duality since the labor leasing of ancient Rome. The duality consists of the aspect that, in legal form, it is a lease contract between completely equal free persons, and the aspect that, in reality, it is placed under a relationship of dominance and subordination similar to a master employing livestock or slaves. What unifies this duality without contradiction is the legal method of carving 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 concept. What Roman law calls locatio conductio, Chinese law calls "chinyue" (lease contract). It is a contract to lease something tangible or intangible in exchange for "chin" (rent/fee). Influenced by this, in Japan, terms like yachin (house rent), kochin (labor cost), rochin (wages), and odachin (reward/tip) all include the character "chin." It is said that in Islamic law, leasing and employment are also collectively called a lease contract (ijāra). Going back even further, it is said that in the cuneiform laws of the ancient Near East, employment and leasing were the same concept.

A legal perception of labor completely different from these Roman and Chinese law ideas is the loyalty 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, and the vassal owed an obligation to work according to the lord's orders. In that sense, it is a bilateral contract where "on" (favor/grace) and "hoko" (service) 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 such that these duties arise for both parties by entering into such a status relationship through a solemn ceremony involving 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 (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 populace, leading to the creation of the servant contract (Gesindevertrag) governing the relationship between master and servant. The servant was subject to the master's power and owed an obligation to serve faithfully, while 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 at a moment's notice ("Iza Kamakura") 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 advocated for provisions for employment contracts based on Germanic law traditions. People who make such arguments are called Germanists, and those on the opposite side are called Romanists. The pre-war Marxist legal scholar Yoshitaro Hirano summarized this conflict in a book titled "Roman Thought and Germanic Thought in Civil Law" (Yuhikaku).

Going back a bit, from the late Middle Ages through the 14th to 16th centuries, Roman law was actively adopted in Germany. This was because Roman law, based on ownership and contract, was useful for German society at the time, which was transitioning from a feudal society to a market economy. Consequently, labor contracts (Arbeitsvertrag) between guild masters and journeymen, which previously had a strong status-contract character, gradually gained 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 the employment contract as a contract of claim rather than a status contract. Gierke's criticism mentioned above was directed at the fact that the German Civil Code after German unification was being created along those lines. However, domestic servants were treated as being under status contracts until much later, 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" in the journal "Hogaku Ronso" introduced Gierke's arguments as a progressive way of thinking—a shift from individualistic Roman law thought to collectivist Germanic law thought. This was a reaction that could be said to be unsurprising 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 (Führer) and followers (Gefolgschaft) in a business community, through the National Labor Order Act of 1934. What is noteworthy is that Gierke-style loyalty contract theory was used for this justification. To be precise, it should be said that it was used to grotesquely revive a (sham) status relationship between lord and vassal, far removed from Gierke's intention of using the ancient loyalty contract as a means of reforming capitalist society to advocate for the employer's duty to protect workers. Partly due to this reflection, Gierke-style personal community relationship theory fell out of fashion in West Germany after the war.

During the war, Nazi thought flowed into Japan from its ally Germany, and even Izutaro Suehiro, who had built up progressive labor jurisprudence before the war, participated in projects like Japanese-style jurisprudence. However, what had a major impact on the world was the wage thought launched under the name of the Imperial View of Labor. In 1940, Asahi Watanabe of Namiki Manufacturing (now Pilot Corporation) argued that wage systems derived from Western-style contract wage theory or 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 1946 Densan-type wage system established a wage system based on age and the number of dependents, and firmly maintained it despite sharp criticism from the Labor Advisory Committee and the World Federation of Trade Unions.

Subsequently, from the 1950s to the 60s, although the government and especially the management side advocated 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 (shokuno-shikaku-seido) was established under management's 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 contract theory like in Nazi Germany or wartime Japan; rather, it was promoted in a form that put a certain kind of socialist worker protection at the forefront. However, despite this, it is an undeniable fact that it developed on the implicit assumption that a company is a personal community relationship. This social exchange—where one fulfills an unlimited obligation to work in terms of duties, time, and space in exchange for guaranteed stability of life, including for one's family, through seniority-based pay increases until retirement—smacks of a modern version of the medieval exchange contract of favor and service.

While the law itself inherits the Roman law tradition and positions employment as a contract to lease the intangible "thing" of labor, what created the society of post-war Japan, where a structure of personal union between company and employee was established to an extent far removed even from Germany? By wandering through ancient Rome and medieval Germany, we might find hints to that question.