In much of Europe, unions are organised by trade or industry and bargain across employers. In Japan, the typical union is organised inside one company and covers its regular employees, whether they work on the factory floor, in sales or in the office. Bargaining over pay and conditions happens at company level. Most enterprise unions belong to an industry federation, and most of those to the national centre Rengo, which coordinates the annual spring wage round, but the agreement itself is signed company by company.
The model grew up alongside lifetime employment and seniority pay, and it shares their logic: the union's members have a long-term stake in the company's survival, so relations are usually cooperative. Many large companies have union shop agreements, under which regular employees below management level must join. Managers leave the union on promotion. Union officers are employees, and a stint as a union official is not unusual on the path to senior management at some large Japanese companies.
Density has fallen for decades. The Ministry of Health, Labour and Welfare's 2025 survey put the estimated organisation rate at 16.0%, a record low, although it was 38.7% at companies with 1,000 or more employees and under 1% at those with fewer than 100.
What it means for a foreign employer
- An acquisition can bring a union with it. Buying a Japanese company usually means inheriting its enterprise union and its collective agreements, including terms on transfers, restructuring and consultation.
- Restructuring needs the union early. Enterprise unions rarely strike, but courts look at whether the employer consulted properly, and a cooperative union makes voluntary programmes work.
- Most foreign subsidiaries have none. Without a majority union, agreements such as the 36 Agreement are signed with an elected employee representative instead.
- Senior candidates may have a union past. A former union official at a large Japanese company can be a strong employee relations hire.
Sources
- Ministry of Health, Labour and Welfare, Basic Survey on Labour Unions 2025 (as of 30 June 2025).
- Trade Union Act.