A worker cooperatives bill has been submitted to the House of Representatives in Japan

The bill aims to provide a specific legal framework for worker cooperatives in promoting decent job creation and sustainable and inclusive development of local communities.

News | 18 June 2020
On 12 June 2020, the worker cooperatives bill was submitted to the House of Representatives in Japan by 15 Members with the support of 53 Members from all political parties.

The bill aims to provide a legal framework for “worker cooperatives” in which members not only work for the organization but also make capital contributions and participate in democratic decision-making. Worker cooperatives focus on creating job opportunities including for socially disadvantaged people and responding to social needs of local communities (e.g. elder care, childcare, inclusion of persons with disabilities, and rural development), rather than pursuing solely economic profits.

In Japan, worker cooperatives are led by the Japan Workers’ Co-operative Union (JWCU). Established in 1986, it currently represents 28 member cooperatives with over 15,000 worker members and JPY 33 billion turnover (approx. USD 308 million).

Due to the absence of a specific legal framework, worker cooperatives were established under different corporate laws in Japan such as “Small and Medium-Sized Enterprise Cooperatives Act” and “Act on Promotion of Specified Non-profit Activities”. JWCU and its member organizations have been advocating for a specific corporate law for worker cooperatives that takes into account members’ engagement with respect to work, capital contribution, and democratic participation in decision-making.

Key elements of the bill include the following:
  • A member is defined as a person who makes a capital contribution to the cooperative and also works for the cooperative.
  • Distribution of surplus can only be done in proportion to the amount of work a member has undertaken at the cooperative, not in proportion to his/her capital investment.
  • The cooperative should sign an employment contract with its member and ensure compliance with labour laws.
  • Detailed procedures for de-facto worker cooperatives currently based on other corporate laws to transform to worker cooperatives based on a new law.

The bill will be discussed at the next extraordinary session of the Diet to be held in autumn for possible adoption.