Act on the Succession to Labor Contracts upon Company Split


Published: 2005

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Act on the Succession to Labor Contracts upon

Company Split

(Act No. 103 of May 31, 2000)

(Purpose)

Article 1 The purpose of this Act is to promote the protection of workers by

prescribing special provisions, etc. to the Companies Act (Act No. 86 of 2005)

concerning succession, etc. to labor contracts in cases where a company is split.

(Notice to Workers, Etc.)

Article 2 (1) When conducting a split (hereinafter referred to as "absorption-type

split " or "incorporation-type split "; the same shall apply hereinafter) pursuant

to the provisions of Part 5, Chapters III and V of the Companies Act, a

company (this shall mean a stock company or a limited liability company; the

same shall apply hereinafter) shall, on or before the notice deadline date notify

the following workers in writing of whether or not there are any provisions in

the split contract, etc. (absorption-type split contract (absorption-type split

contract as provided in Article 757 of the Act; the same shall apply hereinafter),

in the cases of absorption-type split; and incorporation-type split plan

(incorporation-type split plan as provided in Article 762, paragraph 1 of the

Act; the same shall apply hereinafter), in the cases of incorporation-type split;

the same shall apply hereinafter) concerned to the effect that the successor

company, etc. (successor company in absorption-type split , in the cases of

absorption- type split provided in Article 757 of the Act; and incorporated

company in incorporation-type split , in the cases of incorporation-type split

provided in Article 763 of the Act; the same shall apply hereinafter) will

succeed to the labor contracts that the company and workers concerned have

entered into, and of the deadline date for filing an objection provided in Article

4, paragraph 3, and any other matters provided by Ordinance of the Ministry of

Health, Labour and Welfare:

(i) a worker that the company concerned employs and that is prescribed by

Ordinance of the Ministry of Health, Labour and Welfare as primarily

engaged in the business that the successor company, etc. will succeed to; and

(ii) a worker that the company concerned employs (except one prescribed in the

preceding item) and with respect to whom there are prescriptions in the split

contract, etc. concerned to the effect that the successor company, etc. will

succeed to the labor contract that the company concerned and that worker

have entered into.

(2) If a company conducting the split set forth in the preceding paragraph

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(hereinafter referred to as "split company") has entered into a collective

agreement with a labor union prescribed in Article 2 of the Labor Union Act

(Act No. 174 of 1949) (hereinafter referred to simply as "labor union"), the split

company shall, on or before the notice deadline date , notify the labor union

concerned in writing whether or not there are any provisions in the split

contract, etc. concerned to the effect that the successor company, etc. will

succeed to the collective agreement concerned and of any other matters

prescribed by Ordinance of the Ministry of Health, Labour and Welfare.

(3) The "notice deadline date", set forth in the preceding two paragraphs and in

Article 4, paragraph 3, item 1, shall mean each of such dates listed in the

following items:

(i) in the case of the split of a stock company: if the split contract, etc. related

to such split requires an approval pursuant to a resolution of the

shareholders meeting: the previous day of the date two weeks prior to the

date of such shareholders meeting (referred to in Article 4, paragraph 3, item

1 hereof as "approval shareholders meeting"); and

(ii) either in the case of the split of a stock company: if the split contract, etc.

related to such split does not require an approval pursuant to a resolution of

the shareholders meeting: or in the case of the split of a limited liability

company: the day on which two weeks have elapsed, calculated from the day

on which the absorption-type split contract is entered into or the

incorporation-type split plan is created.

(Succession to Labor Contract Pertaining to Workers Primarily Engaged in the

Succeeded Business)

Article 3 A labor contract that a worker set forth in the preceding Article 2,

paragraph 1, item 1 has entered into with the split company and with respect

to which there are provisions in the split contract, etc. to the effect that the

successor company, etc. will succeed thereto shall be succeeded to by the

successor company, etc. concerned on the day when the split involved in the

split contract, etc. concerned becomes effective.

Article 4 (1) A worker set forth in the preceding Article 2, paragraph 1, item 1

and with respect to whom there is no provision in the split contract, etc. to the

effect that the successor company, etc. will succeed to the labor contract that

the worker has entered into with the split company may, during the period

from the day on which the notification provided for in the same paragraph is

made until the deadline date for filing an objection, file with the split company

concerned an objection in writing with respect to the successor company, etc.

concerned not succeeding to the labor contract concerned.

(2) When prescribing the deadline date for filing an objection, the split company

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shall provide at least 13 days between the date on which the notice set forth in

the preceding Article 2, paragraph 1 is made and the deadline date for filing an

objection.

(3) The "notification deadline date for filing an objection" set forth in the

preceding two paragraphs, shall mean each of such dates listed in the following

items:

(i) in the case of Article 2, paragraph 3, item 1: the date designated by the split

company during the period from the next day of the notice deadline date

until the previous day of the approval shareholders meeting; and

(ii) in the case of Article 2, paragraph 3, item 2: the date designated by the

split company during the period until the previous day of the day on which

the split concerning the absorption-type split contract or the incorporation-

type split plan, provided for the same item, becomes effective.

(4) If the worker provided for in paragraph 1 files an objection provided for

therein, then notwithstanding the provisions of Article 759, paragraph 1,

Article 761, paragraph 1, Article 764, paragraph 1 or Article 766, paragraph 1

of the Companies Act, the labor contract that the worker concerned has entered

into with the split company shall be succeeded to by the successor company, etc.

concerned on the day when the split involved in the split contract, etc.

concerned becomes effective.

(Succession to Labor Contract Pertaining to Other Workers)

Article 5 (1) A worker provided for in Article 2, paragraph 1, item 2 may, during

the period from the day on which the notification provided for in the same

paragraph is made until the deadline date for filing an objection provided in

Article 4, paragraph 3, file with the split company concerned an objection in

writing with respect to the successor company, etc. succeeding to the labor

contract that the worker concerned has entered into with the split company

concerned.

(2) The provisions of paragraph 2 of the preceding article shall apply mutatis

mutandis to the case referred to in the preceding paragraph.

(3) If the worker provided for in paragraph 1 files an objection provided for

therein, then notwithstanding the provisions of Article 759, paragraph 1,

Article 761, paragraph 1, Article 764, paragraph 1 or Article 766, paragraph 1

of the Companies Act, the labor contract that the worker concerned entered

into with the split company shall not be succeeded to by the successor company,

etc.

(Succession, Etc. of Collective Agreement)

Article 6 (1) A split company may prescribe in the split contract, etc. the portion

of the collective agreement entered into by the split company concerned and

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the labor union that the successor company, etc. succeeds to.

(2) If, in a case where in the collective agreement entered into by the split

company and the labor union there contains a portion outside the standard

provided for in Article 16 of the Labor Union Act, there is a mutual agreement

between the split company concerned and the labor union concerned to the

effect that the successor company, etc. concerned shall be made to succeed with

respect to all or part of the said portion in accordance with the provisions in

the split plan, etc., the portion involved in the said mutual agreement shall,

pursuant to the provisions of Article 759, paragraph 1, Article 761, paragraph

1, Article 764, paragraph 1 or Article 766, paragraph 1 of the Companies Act,

be succeeded to by the successor company, etc. concerned in accordance with

the provisions in the split contract, etc. on the day when the split concerned

becomes effective.

(3) In addition to what is provided for in the preceding paragraph, if, with

respect to a collective agreement entered into by a split company and a labor

union, a labor contract entered into by a worker who is a member of the labor

union concerned and the split company concerned is succeeded to by the

successor company, etc., then notwithstanding the provisions of Article 759,

paragraph 1, Article 761, paragraph 1, Article 764, paragraph 1 or Article 766,

paragraph 1 of the Companies Act, a collective agreement with the same

contents as the collective agreement concerned (except the portion involved in

the mutual agreement prescribed in the preceding paragraph) shall be deemed

entered into by the successor company, etc. concerned and the labor union

concerned on the day when the split concerned becomes effective.

(Understanding and Cooperation of Workers)

Article 7 In conducting a split, the split company shall endeavor, in accordance

with the prescriptions of the Minister of Health, Labour and Welfare, to obtain

the understanding and cooperation of the workers in its employment.

(Guidelines)

Article 8 In addition to what is provided for in this Act, the Minister of Health,

Labour and Welfare may prescribe guidelines necessary to promote the

appropriate implementation of measures that the split company and the

successor company, etc. should take regarding the succession of labor contracts

and collective agreements entered into by the split company concerned.

Supplementary Provisions [Extract]

(Effective Date)

Article 1 This Act shall come into force as from the date of enforcement of the

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Act Revising a Portion of the Commercial Code, Etc. (Act No. 90 of 2000);

provided, however, that the provisions of the following article shall come into

force as from the day of promulgation.

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