March 12, 2025
Japan Fair Trade Commission
The Cabinet Decision on the Bill to amend the Subcontract Act, etc.
Today, I would like to address two points regarding the JFTC's Measures for pass-through of costs.
The first point concerns the Cabinet Decision on the Bill to amend the Subcontract Act, which was approved by the government yesterday (11th).
In response to the recent rapid increase in labor costs, raw material costs, and energy costs, it is necessary for businesses to secure funding for wage increases in order to achieve "wage increases that outpace price increases." To achieve this, it is crucial to eliminate business practices that impose burdens on contractors, such as those that hinder pass-through of costs.
So far, the JFTC, collaborating with the Small and Medium Enterprise Agency, has held discussions primarily on the Subcontract Act through the Study Group on Business Transactions. Based on the report from the Study Group, compiled at the end of last year, and the opinions gathered from public comments, the Bill to amend the Subcontract Act and the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises has been drafted and was approved by the government yesterday (11th).
Specifically, the amendment includes measures such as prohibiting the determination of consignment prices without proper consultations, banning payment of prices through promissory notes, and adding the delegation of transport to the types of transactions subject to regulation and promotion.
The second point concerns the state of Public Awareness on “the Guidelines on Price Negotiation for Appropriate Pass-thorough of Labor Cost,”, which were jointly developed with the Cabinet Secretariat in November of the year before last.
The guidelines outline 12 codes of conduct to be taken or expected during price negotiations from the perspectives of both orderers and contractors, aiming to secure funding for wage increases by advancing the pass-through of labor costs.
It was also confirmed in the special investigation results published at the end of last year that those who are aware of the guidelines are more likely to implement the pass-through of costs than those who are not. The guidelines also provide examples of price negotiation application forms, which we encourage businesses to use.
In November of last year, a tutorial video in the form of a quiz was published on the JFTC's YouTube channel (Japanese only). In collaboration with the Cabinet Office’s Public Relations Office, we have been also conducting advertising campaigns through train and taxi ads, as well as TV and radio commercials. From mid-last month to this month, we have increased the number of WEB advertisements, focusing on raising awareness. Additionally, we have been explaining the guidelines at local government-labor-management conferences. We hope those who are involved will continue to assist in spreading awareness of these guidelines.
Going forward, the Bill to amend the Subcontract Act will be discussed in the Diet. As the JFTC, we will remain committed to implementing measures for pass-through of costs, while working in collaboration with relevant ministries to improve the environment for sustainable wage increases.
（Tentative translation）
