Court Decisions on Dismissal _Singapore Development Bank Case, Osaka District Court, June 23, 2000

◆Tendency of judgments on location limitation and the doctrine of dismissal for reorganization

The effect of the limited work location on the decision of the law of dismissal for the purpose of reorganization is small, and it tends to be the case that reassignment is often requested as an effort to avoid dismissal.

◆Summary

A number of employees involved in remittance and foreign exchange export operations at a foreign-affiliated company were terminated following the closure of their Osaka branch. They argued that the dismissal did not meet the four requirements for a valid restructuring dismissal, that it constituted an abuse of the right to dismiss, and that it was therefore invalid. They sought confirmation of their status as employees with rights under their labor contracts, along with payment of wages, interest on delayed payment, and compensation for pain and suffering.

◆Points of Judgment

Whether efforts were made to avoid dismissal and whether the selection of dismissed employees was reasonable.

◆Judgment

The dismissal was judged to be valid because the other requirements for dismissal by liquidation were also satisfied.

◆Reason

The workers in question were found to be limited to the Osaka branch where they were hired. The limitation of the place of employment gives the workers the benefit of not being transferred without their consent, but does not give the employer the benefit of not having them transferred. Therefore, the target of personnel reduction is not automatically determined to be the employees of the branch to be closed.

⇒ For employees of branches scheduled to close, the possibility of avoiding layoff depends on whether they can be reassigned to other branches, given the unavoidable nature of the closure. 

◆Possibility of transfer

-It cannot be said that it was unfair that the Tokyo Branch did not solicit voluntary retirement in order to transfer the said workers to the other branch.

-The company's decision to transfer the workers to the Tokyo branch office, where there are no vacancies, is not reasonable because it would mean that employees who are skilled in the work at the Tokyo branch office would be forced to resign, and then the workers would be put in charge of work that they are not skilled in, depending on the nature of the work.

 ⇒ In light of the above, it cannot be said that the company lacked efforts to avoid dismissal, and it is unavoidable that the employees of the Osaka branch would be subject to dismissal if they cannot be transferred.