[MHLW] Enactment of the Workers' Cooperative Act

On October 1, 2022, the "Workers' Cooperative Act (Workers' Act, Labor Cooperative Act)" (Act No. 78, 2020) came into effect. The Act was promulgated on December 11, 2020.

Labor cooperatives, like consumers' cooperatives, agricultural cooperatives, fishery cooperatives, and forestry cooperatives, conduct business for their members' benefit.

In the case of this cooperative, the members are workers who work for these cooperatives, and the purpose of the cooperative is to contribute to the realization of sustainable and vibrant local communities by creating a variety of work opportunities and conducting businesses that meet diverse local demands. (Article 1 of the Act)

These cooperatives must conduct their business in accordance with basic principles (namely, the principle of investment, the principle of reflecting opinions, and the principle of engagement) and must also meet the following requirements (Article 3.2 of the Act):

  • Voluntary membership and voluntary withdrawal
  • Conclusion of labor contracts with members
  • Equal voting and electoral rights of members
  • The members who conclude labor contracts with the cooperatives hold the majority of the voting rights of the total membership.
  • Dividends of surplus shall be paid out in the form of engagement dividends.

The main features are as follows:

  • All types of businesses are allowed except for worker dispatch services.
  • Three or more founders are required to establish a cooperative.
  • Unlike NPOs and business unions, it does not require a license or approval from the government but is granted juridical personality once it meets the legal requirements and is registered. (Semi-legal status).
  • The prefectural governors provide supervision.

Various types of cooperatives will likely be established, such as support offices for people with disabilities, where all workers are cooperative members, and all members operate through discussions.

For more information, please visit the website below:
https://www.mhlw.go.jp/stf/newpage_28318.html

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