[MHLW] “Workers Cooperative Law” enacted

On December 4, 2020, the "Workers Cooperative Law (Workers Law)" (Act No. 78 in Reiwa 2 ) was passed by the House of Councilors and subsequently enacted. The date of promulgation is December 11th, 2020. The law was proposed by Shigeyuki Goto, a member of the House of Representatives, on October 26th 2020, and unanimously passed by the House of Representatives on November 24th of the same year.

Under the law, workers' cooperatives (hereinafter referred to as "cooperatives") operate in accordance with the following basic principles.

(1) Only members can invest in their cooperatives.

(2) The opinions of members should be appropriately reflected in the conduct of the business.

(3) The members engage in business conducted by the cooperatives.

In addition, the cooperatives are not allowed to carry out their business for the purpose of profit.

Furthermore, it is stated in the law that the following requirements must be met.

(1) The members can voluntarily join or withdraw.

(2) A labor contract must be concluded between cooperatives and their members.

(3) The voting right of each member is equal regardless of the number of their investment units.

(4) Cooperative members who conclude a labor contract with the cooperatives hold a majority of the voting rights of all cooperative members.

(5) Dividends of surplus should be paid according to the degree of engagement of each member in the business.

Compared to similar existing types of corporation, this one is distinguished by the fact that members can invest in the business and the ease with which it can be established (see the figure below).


Business Union


Workers Cooperatives




Authorization system

Authorization system

Normative System


The law is expected to come into force within two years. For further information, please visit the following link (Japanese Only):https://www.mhlw.go.jp/stf/newpage_14982.html