Labor deregulation can work only when managerial arbitrariness is firmly restrained.

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Introduction｜Deregulation Is “Dangerous,” Yet Also an “Opportunity”

The issue of labor deregulation has once again returned to the policy agenda.
Given that it runs counter to the direction of labor policy over the past several years, it is natural for reactions such as “Is this a rollback of work-style reforms?” or “Are we going back to long working hours?” to arise almost reflexively.

However, this is not the moment to stop thinking.

The real question is not whether deregulation itself is good or bad.

Whose freedom does this deregulation expand?

The freedom of workers?
Or the convenience of employers?

Under the same制度, outcomes can be completely opposite depending on how it is implemented. Labor deregulation has the potential to move the labor market forward, but it also carries the risk of sacrificing large numbers of workers for managerial convenience.

The position of this article is clear.
Deregulation can be supported only conditionally. Lacking those conditions, it should not be pursued.

Chapter 1｜“Letting People Work If They Want To” Is Not the Same as “Letting Employers Make Them Work”

Support for easing working-hour regulations is particularly strong among younger generations. However, interpreting this as “young people want long working hours” is a mistake.

What they are seeking is a conditional form of freedom:

during a period of physical strength
to gain experience and skills
with the prospect of higher compensation
by their own choice
for a limited period
with the freedom to quit at any time

Time investment under these conditions constitutes overtime as self-investment.
It is fundamentally different from long hours that are imposed on anyone, at any time, with no right to refuse.

The moment this distinction is lost, deregulation turns into a dangerous policy.
The subject must always be the worker.

Chapter 2｜The Reality of “Gray Adjustments,” Even with Parental Leave

In Japanese workplaces, gaps already exist between the law and reality.
A typical example is the “gray adjustment” surrounding parental leave.

Parental leave has strong legal and social legitimacy, and disadvantageous treatment is prohibited. Yet in practice, phrases such as:

“the entitled parent”
“special treatment for just one person”
“they’re prioritizing family now”

are frequently heard.

While companies appear to comply with the制度 on the surface, in reality:

workers are removed from responsible roles
performance evaluations quietly decline
promotions are postponed

What matters is that this is not an exception—it reflects ordinary human psychology.
A belief that “highly legitimate制度 will naturally be followed” is naïve.

One cannot discuss deregulation without first confronting this reality.

Chapter 3｜The “Invisible Internal Message” Created by Deregulation

When working-hour regulations are relaxed, the real danger is not direct legal violations.
It is the unspoken internal message that spreads throughout organizations.

“They’re really putting in the effort.”
“They’ve stopped pushing themselves lately.”
“If you’re motivated, you can do it.”

These remarks sound harmless, but in the workplace they are translated as:

“Those who work long hours are rewarded; those who leave on time are pressured.”

In Japan, people are moved more by atmosphere than by explicit orders.
As a result, even when制度 grants freedom, organizational culture can transform it into coercion.

Once culture changes, laws become hollow.
Deregulation is also a switch that rewrites corporate culture.

Chapter 4｜And Yet, This Is Also an Opportunity for Japan

By this point, deregulation may appear only dangerous.
Yet precisely because of those risks, it must be said: few reforms are as well suited to Japan as this one.

The core of Japan’s labor problem is clear:

discomfort with individualized treatment
uniformity justified as fairness
management based on time and age

The result has been a country where “people work hard, yet productivity does not rise.”

If the following truly take hold:

those who want to work can exchange time for outcomes
those prioritizing work–life balance can leave without penalty
evaluations are based on results, not hours
roles and responsibilities are clearly defined (job-based systems)

this would be more than work-style reform—it would be a transformation of society’s underlying assumptions.

With clear rules and standards, Japan’s high adaptability and coordination能力 can become strengths. A rare environment combining efficiency and high employee satisfaction could emerge.

Deregulation is not the abandonment of management, but a reform that raises the quality of management itself.

Chapter 5｜This Is a “Litmus Test” for Employers

Those being tested by deregulation are not workers.
They are employers.

Can they:

define job roles
explain outcome-based standards
design multiple modes of work

Under such leadership,制度 function. Without it, they inevitably distort.

Companies that attempt arbitrary use of deregulation must be eliminated step by step:

public enforcement
avoidance by workers
loss of talented employees
withdrawal by consumers, business partners, and investors

Here, the ESG perspective is crucial. ESG evaluates companies based on Environment (E), Social factors (S), and Governance (G).

Firms that treat workers as expendable inevitably lose their S (Social) rating and are excluded from markets. Deregulation thus becomes a litmus test that exposes such management.

Chapter 6｜What Is Needed to Prevent Employers from Acting Freely

Deregulation cannot be built on goodwill.
A clear three-part framework is required.

1) Effective labor inspection

safe, functional whistleblowing
review of actual evaluations, staffing, and workload bias
correction of unspoken practices that cause intimidation

2) Penalties that change management behavior

not just fines
public disclosure and corrective orders
tangible risks to business continuity for serious violations

3) A clear governmental message

time does not equal value
refusing overtime is legitimate
there is no “freedom to make people work”

If regulations are loosened, their operation must be tightened.
Without this, abuse is inevitable.

Chapter 7｜Why Deregulation Fails Without the Willingness to Let Companies Fail

Japan has repeatedly reacted with, “If bankruptcies increase, we must protect companies.”
But this time, what must be protected is not:

companies
employment numbers

but workers’ freedom and trust in labor law.

Bankruptcy resulting from abusive deregulation is not a sacrifice.
It is the consequence of managerial choice—and it is avoidable.

Systems that do not anticipate exit will always be exploited.
Freedom is protected only when exit carries real pain.

Conclusion｜Cold Resolve Saves the Many

Deregulation cannot be driven by kindness alone.
Protecting dishonest companies out of sympathy ultimately harms workers.

For this制度 to function, there must be a firm resolve to force abusive companies out.

It may look cold.
But without that cold resolve, workers cannot be protected.

Labor deregulation should expand workers’ freedom.
Companies that distort it must exit the system.

Read in Japanese ↓（For Japanese learners!）↓

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