With respect to the succession to labor contracts upon a business transfer, the Business Transfer Guideline confirms the established legal principle that the individual consent of each employee is required and requires that the assignor company fully explain to the succeeded employees the status of the business transfer and consult with them so as to gain their consent.
On the other hand, with respect to a merger, the Business Transfer Guideline states that labor contracts will be succeeded comprehensively without the need for individual employee consents and that the employment conditions will be maintained without any changes.
As described above, the amendments and guideline have not made material changes to the basic concept of the succession to labor contracts upon a company split, business transfer, or merger. However, it is necessary that a company that carries out a company split etc. execute certain procedures while paying attention to the provisions of the ordinance and guidelines.