Transportation service group Yamato Holdings Co. said Tuesday it will pay about 47,000 employees ¥19 billion in unpaid overtime for the past two years.
The parent of leading parcel delivery company Yamato Transport Co. admitted that many of its drivers had to work long hours, including overtime without pay, a chronic situation due to a surge in parcel delivery demand in line with rapid growth in the e-commerce industry.
Citing the cost of the overtime payments, Yamato Holdings sharply revised down its consolidated earnings estimates for the latest business year ending in March.
Operating profit is now estimated at ¥34 billion, compared with ¥58 billion previously expected, and net profit will be a projected ¥19 billion, down from ¥34 billion.
Yamato Holdings Senior Managing Executive Officer Kenichi Shibasaki said the company became unable to properly manage work hours of its drivers in autumn last year, as online shopping demand expanded faster than expected.
Most of the unpaid overtime in the past two years had occurred during break periods, while the remainder happened before and after the regular work hours, according to Shibasaki.
A labor standards inspection office in Kanagawa Prefecture, ordered a branch of Yamato Transport last year to take corrective measures against unpaid overtime.
This led Yamato Holdings to have talks with labor about ways to reform work styles and investigate unpaid overtime by its group workers.