"Life-time employment" used to define the nature of the Japanese society.
It was as if everyone had belonged to a company to which they dedicated their lives.
It was not forced by the law, but they simply opted for that, because that was the only way to make good income.

Now things have changed. The burst of the bubble economy has done its own job.
After experiencing rigorous restructuring newly graduated do not count on the life-time employment. The society has become a little more dynamic, because people started making money on their own merits.
Mr.Ishizuka's article below explains about this more in detail.

(However, under the currenct recovery of the Japanese economy and the decrease of the newly graduated jobs are becoming cushy again.)

http://www.glocom.org/opinions/essays/20070305_ishizuka_company/