Why does the government need to be involved if employers actually get better productivity in the first place? Let employers experiment by themselves and see what works best. Another typical example of top-to-bottom leadership in Japan.
If the government doesn't make laws that define broad principles, capitalism will eat you alive. Employers are greedy and evil. Their focus is profit maximization. Not employee well being. Given the chance, do you really think employers will even give vacation days to employees? No way. They will want you to work 24/7 if the govt. is ok with it.
Has it? Levels of life of the whole world are on the rise for the past 20 years at least - if you want to make that argument the current data does not support that at all.