Dentsu Japan Offices Raided in Probe Over Excessive Overtime

  • Investigation comes after employee suicide blamed on overwork
  • Company says it will fully cooperate with investigation

Dentsu Inc. offices were raided Monday by labor ministry officials looking for evidence that the advertising firm’s employees exceeded legal limits on overtime hours, after a worker’s suicide drew national attention to one of the country’s largest and most prestigious companies.

Dentsu will cooperate fully with the probe, Shusaku Kannan, a spokesman for Japan’s biggest ad agency, said by phone Monday. The government will pursue a criminal complaint if it finds evidence the company violated laws related to overtime hours, said a labor ministry official, who asked not to be identified per internal policy.

Chief Cabinet Secretary Yoshihide Suga highlighted the Dentsu case in a regular briefing with reporters Monday, saying the advertising agency will be dealt with appropriately and that the government is working on labor law reforms to prevent deaths from overwork.

For a story on Dentsu’s efforts to limit working hours, click here.

Work issues were a contributing factor in 2,159 suicides in 2015, according to a health and labor ministry white paper published in October. The paper cited data from the National Police Agency and Cabinet Office.

The Christmas day 2015 suicide of Matsuri Takahashi, a 24-year-old employee of the ad agency, brought renewed attention to work conditions that have been blamed for workers taking their own life at companies including major restaurant chains. Dentsu said Nov. 1 it was setting up an internal committee headed by Chief Executive Officer Tadashi Ishii to eliminate death by overwork.

“Enforcement of working hours laws is getting stricter,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo. “Big restaurant chains like Watami and Sukiya have been probed in the past for overwork and now the spotlight is on Dentsu.”

Limiting Overtime

Fifty firms, including Daiwa Securities Group Inc. and Seven & I Holdings Co., have signed a pact on the Cabinet’s website saying they are committed to ending excessive work hours.

Dentsu said in October it would reduce the limit for overtime work to 65 hours a month from 70 hours starting this month, after an employee’s suicide was blamed on overwork.

Ishii addressed employees at the company’s headquarters Monday about what the company was doing to improve working conditions and eliminate death from overwork. The speech was simulcast by internet to the company’s offices in Osaka and Nagoya.

The company’s stock was little changed, gaining 0.4 percent, compared with a 1.6 percent increase in Nikkei 225 Stock Average, as of the close of trading in Tokyo on Monday.

Dentsu, which calls itself the world’s largest brand agency and third-biggest for media, controls 25 percent of Japan’s market, and is especially dominant in controlling the flow of advertising into major domestic television networks and newspapers. The agency’s clients have included LVMH Moet Hennessy Louis Vuitton SE, Diageo Plc, Nestle SA, SoftBank Group Corp. and Electronic Arts Inc., according to data compiled by Bloomberg. It had about 43,000 employees in 124 countries worldwide, with about 49 percent in Japan, according to its annual report.

Nearly a quarter of Japan’s companies reported some workers logging more than 80 hours of overtime a month, according to a labor ministry survey of more than 1,700 firms last fiscal year. Almost a quarter of employees worked more than 49 hours a week, compared with 16 percent in the U.S., 13 percent in the U.K. and 32 percent in South Korea, the ministry said in a paper on "karoshi," or death from overwork.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE