In connection with the succession to labor contracts upon a company split, the Act on the Succession to Labor Contracts upon a Company Split and other relevant laws and regulations provide that, although the individual consents of employees to be succeeded are not required, the split company must take the following procedures to protect the employees: (i) consult with a labor union or a person representing the majority of employees; (ii) conduct individual consultations with employees; and (iii) issue notices to the relevant employees. The amendments have not changed the outline of the preceding procedures but have made certain changes to further promote worker protection, taking into account new legislation (such as the Companies Act) and court precedent.
For example, under the amended Succession Act Guideline, employees who are not involved in the succeeded business but whose labor contracts will be succeeded upon the company split have been included among the employees with whom the company is required to have individual consultations.