July 3, 2026: 7th Labor Conditions Subcommittee—Reorg Labor Relations Adjustment

The Labor Relations Law Division of the Labor Standards Bureau held the 7th subcommittee meeting on July 3, 2026, with the agenda items “Labor Relations Accompanying Organizational Reorganizations” and “Future Procedures.”

The subcommittee confirmed the background to the revisions of the Guidelines on Business Transfers and Other Matters and discussed labor relations during organizational reorganizations, using court precedents and labor relations board orders concerning mergers, business transfers, and company splits as reference material.

Committee members expressed the view that explaining at an early stage the scope of workers transferring and their working conditions, thereby relieving workers’ concerns and increasing their sense of acceptance, would positively affect smooth corporate reorganizations and business management.

The revised guidelines stipulate matters to be undertaken by an administrator after a decision to commence enforcement proceedings for a business value collateral right and matters that the company is advised to undertake when establishing the right. Examples were also presented in which financial institutions and others explained the protection of labor claims and other claims, and management explained the matter to workers.

The court precedents and labor relations board orders addressed consent to changes in working conditions; succession of employment contracts and avoidance of dismissals in business transfers; Article 5 consultations and Article 7 measures in company splits; whether workers primarily engaged in the transferred business qualify; and employers required to respond to collective bargaining and liability for unfair labor practices.

Regarding the establishment of an automatic succession rule for business transfers, one view called for careful consideration in light of the diversity of business transfers and their effects on contract formation and employment, while another called for rules governing the succession of employment, consultations with labor unions and others, and employer status, including that of parent companies and holding companies. Going forward, the issues will be organized based on JILPT surveys of overseas jurisdictions, companies, and labor unions, as well as interviews with M&A research firms, attorneys, and labor-management relations organizations.