Japan’s Supreme Court has ruled in favor of a whistleblower for the first time in a case that highlights the harsh treatment outspoken employees have endured in a nation that zealously values loyalty and conformity.
Despite being a good salesman with experience in the US, Masaharu Hamada, 51, was demoted at optics and reprography firm Olympus Corp, forced to take rudimentary tests and ignored by colleagues in what he alleged was reprisal for raising the issue of supplier complaints. He received a notice yesterday from this nation’s highest court, dated Thursday, dismissing the appeal by the Tokyo-based camera and medical equipment maker Olympus of a 2010 lower court decision. It sealed the victory of the little “salaryman” against a giant of Japan Inc.
“We need a society where honest hard-working people don’t lose out,” Hamada said. “This is about justice and human rights.”
Hamada’s story highlights how workers labeled as misbehaving are punished in Japan, where major companies like Olympus offer lifetime employment, although they more freely fire contract and part-time workers. That means employees like Hamada become targets of cruel harassment designed to silence them or make them quit. Hamada was nearly driven to a breakdown during his five-year battle.
Japan is behind some Western nations in protecting whistleblowers. A law to protect them was enacted only in 2006 and critics say it is inadequate because it does not penalize companies that punish whistleblowers. To pursue legal action, whistleblowers cannot quit as the law only applies to employees. Only a handful of whistleblowers have come forward in Japan in the past few decades. When they do, they are treated as outcasts, sometimes being told to sit in closet-sized offices or to mow the lawn. Sometimes even their children become victims of discrimination. So abhorred is the employee who dares to question the company.
Hamada sued Olympus in 2008, saying he was punished for relaying a supplier’s complaint that its best employees were being lured away by Olympus. Olympus said he was merely transferred, not demoted. His case is considered a whistleblowing case in Japan because he went first to his bosses and then to the company compliance unit, trying to raise questions about the professional behavior of colleagues for the public good, and, as the Supreme Court found, was punished unfairly in retribution.
Last year, the Tokyo High Court reversed an earlier district court decision and ordered Olympus to pay Hamada ￥2.2 million (US$27,500) in damages for the transfer. Olympus had appealed.
Olympus was not immediately available for comment yesterday. In the past, it has called the court rulings favoring Hamada “regrettable.” Olympus has been targeted recently by another high-profile whistleblower, Briton Michael Woodford, the former chief executive. Woodford was fired in October after he blew the whistle on dubious accounting at Olympus. The company later acknowledged it hid ￥117.7 billion in investment losses dating back to the 1990s. Three former Olympus executives, including the ex-chairman, were arrested earlier this year on suspicion of orchestrating the accounting cover-up.
Woodford has since become a hero in Japan. Three weeks ago, Woodford won a ￡10 million (US$15.4 million) settlement from Olympus in a British court. He had sued alleging unlawful dismissal and discrimination as he was not given the same treatment as a Japanese employee.