Labor union’s veto over company split

In Japan, according to Companies Act and Act on the Succession to Labor Contracts upon Company Split, companies may effect company split without the agreement of labors who will be transferred.

Sotetsu is one of major railway company and their management is in crisis, so they are planning to effect company split which means railway business will be divided.

But Sotetsu Labor Union, one of labor union of Sotetsu, insists that they have a veto power over company split and plans to strike.

Basis of their claims is union contract.

Union contract between Sotetsu and Sotetsu labor union has prior consultation clause which demand company to have a discussion when company plans to change working condition.

The union’s claim seems unreasonable because prior consultation clause does not mean veto power. It only demands to have a discussion.