Japanese Trade Union Confederation (RENGO)

Koga Says!
Statement on Ministry of Health, Labour and Welfare "Study group on labour relations at investment fund-acquired businesses" Report

1. On May 19th, the Ministry of Health, Labour and Welfare’s "Study group on labour relations at firms acquired by investment funds" (Chaired by Kyoto University Law School Professor Kenichiro Nishimura) compiled a report based on their findings. This study group was launched in order to examine actual labour conditions at corporate buyout and to address the necessity for new responses due to an increasing number of acquisitions by investment funds which may change the state of existing labour-management relationships.
2. As already stated in the Supreme Court’s sentence on the Asahi Broadcasting Company Case (February 28, 1995) regarding the legal status of "employers" in the Trade Union Law; even companies without any direct employment relationship could be recognized as having the status of employer, "if the entity can be identified as even partially as being in a position to realistically and concretely determine rules and basic labour conditions." Based on the reality that not every investment fund positively commits themselves to labour conditions in the firms they acquire, this study group concluded that it is appropriate to judge cases individually on the rationale behind the Asahi Broadcasting Case. It would be difficult to present a uniform criterion for judgment on the investment fund’s “employer status” as it is for the status at parent-subsidiary companies or pure holding companies.
3. At the study group's hearing RENGO claimed that "it would doubtless be appropriate to cite the Asahi Broadcasting Company Case as a precedent, when determining the employer status of investment funds. Also, whenever investment funds hold a certain amount of acquired company stock and install their personnel as board members to the acquired-company to exercise influence in terms of both of quality and personnel, then that investment fund should be acknowledged as having employer status even without matching the conditions of the Asahi Broadcasting Company case." However, the report did not include this criterion. The underlying idea behind the Asahi Broadcasting Company case is problematic not only in its recognition that employer status may be limited but also in its vague criteria and poor predictability of judgment. While it was regrettable that the study group’s report provided no progress on the judgment of employer status, the report was very valuable in that it illuminated the possibility of recognizing investment funds as having “employer” status.
4. The report also outlined the following points to help create good labour-management relations among investment funds, acquired-firms, and workers at acquired-firms: [1] Investment funds should recognize that they also are likely to be employers. [2] Both acquired-firms and investment funds must realize the importance of collective bargaining at the acquired firms. [3] Opportunities should be established for an orientation and the exchange of opinions on business policies for the firm after its acquisition. The ministry of Health, Labour and Welfare stated that it will communicate those 'points' but that alone will not ensure effectiveness. RENGO demands that at the minimum guidelines be formulated as soon as possible to create measures that will make it possible to guide investment funds. RENGO also conducts ongoing activities for good labour-management relations to be established at the time of acquisition and works to raise public awareness.