Photo: Lisa Du, Business Insider
An American bank is making headlines in Tokyo as the effects of a turbulent year on Wall Street takes its toll—what may be the first ever Goldman Sachs employee union has formed in Japan, The Japan Times reports.Here’s a brief explainer on how this happened: Japan’s notoriously strict labour laws make it nearly impossible to fire someone. There are only three reasons why an employer can lay off a worker: poor performance, disciplinary/behaviour issues, and economic constraints, according to Global HR News.
In each instance, the employer must prove without a doubt that the termination of the job is absolutely necessary, or they may be ordered by a judge to keep the employee. In a country known for lifetime employment and customs that encourage an aura of constant ambiguous politeness, we probably shouldn’t be surprised.
In most cases when companies want to let an employee go, they encourage the worker to resign or sign an agreement to leave, and that’s what happened when Goldman Sachs was laying off workers in Japan as part of the firm’s announced layoffs.
According to the Japan Times, Goldman bankers were told that their work had become redundant and were given “mutual separation agreement” to sign that detailed severance pay and other services Goldman Sachs would provide. The signing of the agreement, however, is complete optional and simply a way for the firm to avoid future lawsuits. Employees are allowed to negotiate better terms or even get their jobs back before signing, and that’s exactly what three bankers decided to do. When Goldman Sachs didn’t budge in the terms of their agreement, they decided to join the National Union of General Workers Tokyo Nambu, later forming the Goldman Sachs Japan Employee Union branch.
As this happened, Goldman had also lawyered up and decided to actually fire the employees, cutting them off from their salaries and other benefits, like residency sponsorships and insurance. But the union is still fighting, and are now going on the publicity offence by planning press conferences and sending out releases.
See, technically, Goldman Sachs never had a reason to fire those employees so they actually have a case.
Here’s why, from The Japan Times:
… when laying off workers in Japan for economic reasons, there “must be a business necessity to resort to the reduction of personnel,” and companies must take comprehensive steps before actually laying off workers. Companies should institute a hiring freeze, reduce overtime and executive salaries, transfer employees, not renew those on fixed-term contracts, and solicit voluntary retirement.
With Goldman Sachs setting aside $10 billion for bonuses in 2011, union members feel Goldman Japan has failed to take the necessary steps under domestic law to justify layoffs.
Whatever happens, it doesn’t look like the the Goldman Sachs union is going away, and we’re looking forward to whatever the group may stir up in the future.