Toyota to pay OT for 'kaizen' work

Prompted by a ruling over a death from overwork, Toyota Motor Corp. will pay full overtime to factory workers engaged in after-hour kaizen activities designed to improve efficiency and product quality, sources said.

Japan's top automaker now pays compensation only for up to two extra hours a month because it considers employees are engaged voluntarily in kaizen activities.

But the company decided Wednesday to regard kaizen as part of the workers' job requirements and start paying allowances on June 1 to cover all activities done after hours, the sources said.

Labor unions at the company have agreed to the revision.

Toyota's 40,000 factory workers in Japan are all engaged in kaizen, or continuous improvement, as a core part of the quality control (QC) activities.

The company has about 5,000 QC circle groups, which typically consist of eight workers each. The QC activities started in 1964 for production-line workers to brainstorm for improvements.

Some employees and their families have said the workers are effectively forced to engage in QC activities because the results and achievements from the activities are included in their evaluations.

In November 2007, a Nagoya District Court ruling attributed the 2002 death of a Toyota employee to overwork, saying QC activities are "duties under the employer's control."

The ruling was finalized in December after the central government, which was the defendant in the worker's accident compensation lawsuit, decided not to appeal.

The 30-year-old worker at the company's Tsutsumi Plant in Toyota, Aichi Prefecture, died in February 2002 after collapsing during work.

The man, who served as chief of a QC circle group, reported he was engaged in the activities for 16 hours during the four months before his death.

However, he actually spent hours on weekends and paid holidays preparing documents and other materials for the activities, according to the ruling.

His wife filed the suit in July 2005 against the chief of the Toyota Labor Standards Inspection Office, demanding revocation of its decision that overwork did not cause the employee's death.

Toyota's decision to pay full overtime for kaizen came amid growing criticism against long work hours leading to health damage and karoshi, or death from overwork.

McDonald's Co. (Japan) said Tuesday it will pay overtime to about 2,000 employees it categorizes as managers, who had been denied compensation for extra hours worked.

Toyota's decision is expected to prompt other manufacturers to review practices concerning work and compensation.

It is estimated that more than 30,000 QC circle groups are organized at domestic manufacturers, such as automakers and electronics makers.

Toyota plans to encourage workers to review and simplify QC activities so that overtime work will not exceed two hours a month.

A senior Toyota official said the revision will inevitably push up labor costs.(IHT/Asahi: May 23,2008)