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TOKYO, Aug 31 (Reuters) - A proposal by Japan's new ruling party to ban temporary workers on factory floors could hinder corporate strategy and take opportunities away from job seekers, the head of a business lobby said on Monday.
Voters swept the Democratic Party of Japan to a historic victory in an election on Sunday, ousting the long-ruling Liberal Democratic Party and ushering in a government that has placed job security at the top of its agenda. [ID:nPOLJP]
The Democrats have proposed banning "in principle" the dispatch of temporary workers to manufacturing jobs, ending a system that has helped the auto and electronics industries keep costs low but has also added to instability in the workforce.
"I don't quite agree with the DPJ's idea of banning temporary workers. Temporary employment has had benefits for both companies and workers," Masamitsu Sakurai, chairman of Keizai Doyukai (Japan Association of Corporate Executives) told a news conference.
"It has sustained the country's economic growth and diversified ways of working," added Sakurai, who is also chairman of office equipment maker Ricoh Co (7752.T).
After a decade of corporate cost-cutting and labour market deregulation, about one-third of all employees in Japan are non-regular workers without job security, a category that includes part-timers, contract workers and temporary staff.
According to Japan's Ministry of Internal Affairs, temporary workers alone increased to 1.4 million people in 2008 from 850,000 people in 2004 when the government lifted a regulation against hiring temporary employees in factories.
While firing regular, full-time employees in Japan is legally tough, laying off contract workers and temps is relatively easy.
The loss of that flexibility could hurt the competitiveness of Japanese manufacturers, analysts say.
"It is still unclear what the regulation the DPJ is planning will be like. But considering the Democrats are basically pro-labour, I think it will be difficult for manufacturers to benefit from a low-wage workforce," said Hisashi Yamada, an economist at Japan Research Institute. (Reporting by Nobuhiro Kubo)