Promises to hire all approximately 600 people back after situation improves.

Tokyo-based car-hire firm Royal Limousine had seen is fortunes completely reversed in the span of a few months. With the Olympics set to roll into town later this year, business was expected to be better than ever and the company was gearing up to meet the high demand.

Now, the games have been put off for another year and to make matters worse, Tokyo has been put in a state of emergency, causing even fewer people to require the use of taxis.

Seeing the writing on the wall, Royal Limousine decided to make a drastic preemptive move by firing everyone. Their logic is that in doing so all the employees could collect unemployment insurance and potentially get more money that they would during a lengthy period of paid leave.

Also, by firing them now, all the drivers and staff wouldn’t have their wages reduced, which would have caused their unemployment checks to also shrink had the lay-off occurred at a later date. There’s also the added benefit of taking all the drivers off the streets which eliminates the risk of a COVID-19 outbreak cluster to happen among their ranks.

So, on 8 April, company president Kensaku Kaneko met with about 80 employees in a park in Koto Ward and announced his plan to lay off everyone immediately. The workers at this meeting represented four of Tokyo Limousine’s six subsidiary companies. Those in the remaining two would be let go shortly after. In total, roughly 600 people will have been terminated.

▼ Some were handed their termination papers on-site

The company says they intend to rehire every employee when the situation improves, but are under no obligation to do so. This has caused suspicion among some laid-off employees that something more is going on.

One driver told media:

“Yesterday I got a call from my co-worker telling me I was fired. It was all so sudden that I felt a mistrust for the company, because they didn’t give us any more warning. I know the situation is really hard, but I don’t feel convinced that this decision was made in the best interests of the workers. I really like working here and everyone here, so I want to come back. On the other hand, I feel like I can’t trust the company. It’s a complicated feeling.”

However, another driver who has seen firsthand how severely fares have been drying up in the city told reporters:

“I was surprised to hear this from a co-worker yesterday, and worried about how to get by. As the coronavirus has spread, the daily take which was once around 70,000 yen (US$640) gradually went down to 50,000 yen ($460), then 30,000 yen ($275). Recently it’s been under 10,000 yen ($90). In these conditions I’m not surprised that the president made this choice and understand to a certain extent. Even though I was suddenly let go, I enjoy driving a taxi and hope I can return to this company some day.”

People looking at the issue from the outside had mixed feelings.

“That’s smart.”
“Isn’t this unemployment insurance fraud?”
“They’ll all get that extra 300,000 yen for getting their income reduced too. Brilliant.”
“Does anyone really believe the company is going to hire everyone back?”
“Hmm, maybe I should get fired.”
“It’s better than companies that just let go employees without any hope for the future.”
“I’m pretty sure this would be declared illegal if they hired everyone back. I hope those guys are looking for new work.”
“If every business starts doing this… Are we going to be okay?”
“If the management is smart, this could work.”

According to the Ministry of Health, Labor, and Welfare, the act of firing someone with the intent of hiring them back in order to claim unemployment benefits is defined as a “false claim” and liable to penalties. However, the wording is somewhat vague and includes mentions of this needing to be done “several times” as an example. So, as one comment suggested, there may be legal workarounds if a company is savvy enough and well-connected enough to find them.

▼ If they are plotting insurance fraud, it would be amazingly brash to announce it in a public park in front of the news media.

This then presents the problem of what if every company decides to put their entire workforce on the dole and just sit on their own cash reserves until all this blows over. To prevent this, the government is currently offering sizable subsidies to businesses of all sizes that don’t lay off a single employee as a result of the current economic downturn.

Given all that, it can be assumed that a mass-firing tactic like this is either meant to cover up ulterior motives, or act as a canary in the coal mine, indicating more deeply rooted economic problems which current relief measures aren’t addressing.

Source: NHK News Web, Ministry of Health, Labor, and Welfare, Itai News
Top image: Pakutaso
Insert image: Pakutaso
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