2016.02.19

2013 (Ju) 2595

Minshu Vol. 70, No. 2

Judgment concerning how to determine whether or not workers have consented to changes to their working conditions concerning wages and retirement benefits as prescribed in the rules of employment

Case to seek retirement benefits

Judgment of the Second Petty Bench, quashed and remanded

Tokyo High Court, Judgment of August 29, 2013

1. Determination as to whether or not a worker has consented to changes to his/her working conditions concerning wages and retirement benefits as prescribed in the rules of employment should be made not only by considering whether the worker has performed an act by which he/she accepts the changes, but also from the perspective of whether reasonable grounds exist objectively for finding that the worker has performed said act of his/her own free will, and in order to consider the latter point, it is necessary to take into account factors such as the content and degree of the disadvantage that may be caused to the worker due to the changes, the circumstances leading up to the worker performing said act and the manner in which he/she performed it, and the content of the information or explanation provided to the worker before his/her performance of said act.

2. Where employees of a credit cooperative that was to disappear through a merger affixed their signatures and seals to a document stating that they would consent to changes to the retirement benefit payment standards as prescribed in the rules of employment before the merger, and there were circumstances as indicated in the judgment, such as that as a result of these changes that were made in order to avoid the cooperative's failure, the total amount of retirement benefits would be one-half of or smaller than the conventional total amount, and deduction would be made as corresponding to the actuarial present value of an additional pension under the employee pension system, etc., and thus these changes were very likely to lead to the situation where no retirement benefits were to be paid in the case of voluntary retirement, the court of prior instance determined that the employees have consented to the changes by the affixing of signatures and seals. However, its determination as such is illegal because it failed to make finding or consideration sufficiently as to matters including the content of the information or explanation provided to the employees, and it made determination without fully examining whether reasonable grounds exist objectively for finding that the employees affixed their signatures and seals of their own free will.

(Concerning 1 and 2) Article 2, paragraph (1) of the Labor Standards Act, Article 3, paragraph (1), Article 8 and Article 9 of the Labor Contracts Act



Labor Standards Act

Article 2

(1) Working conditions shall be determined by both Workers and Employers on an equal basis.

Labor Contracts Act

Article 3

(1) A labor contract is to be concluded or changed between a Worker and an Employer by agreement on an equal basis.

Article 8

A Worker and an Employer may, by agreement, change any working conditions that constitute the contents of a labor contract.

Article 9

An Employer may not change any of the working conditions that constitute the contents of a labor contract in a manner disadvantageous to a Worker by changing the rules of employment, unless an agreement to do so has been reached with the Worker; provided, however, that this does not apply to the cases set forth in the following Article.

The judgment in prior instance is quashed.

The case is remanded to the Tokyo High Court.

Concerning Reasons II, III-3, and IV-1 for petition for acceptance of final appeal argued by the appeal counsel, KATO Keiji and OSADA Kiyoaki

1. In this case, the appellants of final appeal, who were employees of Credit Cooperative A, seek payment of retirement benefits against the appellee of final appeal (its name had been Credit Cooperative B before the name change as of February 16, 2004), which succeeded to the status of Credit Cooperative A under the labor contracts regarding the appellants through the merger between these cooperatives effected as of January 14, 2003 (hereinafter referred to as the "Merger"). The amounts of retirement benefits claimed by the appellants are based on the retirement benefits payment standards as prescribed in Credit Cooperative A's Rules for Retirement Payments for Employees that had been in force at the time of the Merger (hereinafter referred to as the "Former Rules"). On the other hand, the appellee contends that the retirement payment standards that are to apply to the appellants have been changed, by individual agreements or through the conclusion of a collective agreement, to the retirement benefits payment standards as prescribed in the Rules for Retirement Payments that were established upon the Merger (hereinafter referred to as the "New Rules").

2. The outline of the facts determined by the court of prior instance is as follows.

(1) Around 2001, there was a concern about the possibility of Credit Cooperative A's failure, and in order to avoid this, Credit Cooperative A made an offer to the appellee for a merger. On June 29, 2002, the parties entered into a merger agreement to effect the Merger, by which they agreed to matters including the following: [i] through the Merger, Credit Cooperative A would be dissolved and the appellee would survive; [ii] the appellee would succeed to the status of Credit Cooperative A under the labor contracts regarding the employees who would be in service for Credit Cooperative A at the time of the Merger; and [iii] retirement benefits for these employees would not be paid at the time of the Merger but would be paid at the time when they retire after the Merger in accordance with the appellee's rules for retirement payments, for the total length of service before and after the Merger. With the aim of making preparation for the Merger, a joint council consisting of the directors of both parties was set up.

(2) In November 2002, the labor and social security attorney who studied the working conditions of Credit Cooperative A's employees at the request of the joint council drafted a consent form to be used to obtain consent from these employees for their working conditions after the Merger. With regard to the specific amounts of retirement benefits to be paid to the employees who were in service for Credit Cooperative A at the time of the Merger, this draft consent form stated that these employees would be guaranteed the same level of payment as that under the retirement benefits payment standards applicable to the persons who had been employees of the appellee since before the Merger. However, this point was questioned by the appellee and further studied.

(3) On December 19, 2002, the joint council approved the adoption of the payment standards under the New Rules, which had been set out by partially revising the payment standards under the Former Rules, as the retirement benefits payment standards applicable to Credit Cooperative A's employees after the Merger.

As a result of this revision, the following changes were made: [i] the amount of salary which would be the basis for calculating the amount of retirement benefits (hereinafter referred to as the "base salary amount") had been prescribed under the Former Rules as the monthly amount of salary at the time of retirement, but this was reduced under the New Rules to one-half of the amount of salary at the time of retirement; [ii] the payment multiplier by which the base salary amount would be multiplied (referring to the number obtained by multiplying the number of years in service by a prescribed coefficient according to the type of retirement, namely, ordinary retirement due to reaching the retirement age or other grounds, or voluntary retirement; the same applies hereinafter) was capped at 55.5 under the New Rules, although there had been no such cap under the Former Rules (hereinafter the changes to the retirement benefits payment standards mentioned in [i] and [ii] above are referred to as the "Changes to the Standards").

Under the Former Rules, persons who were eligible to receive an additional pension or additional lump-sum payment as prescribed in the National Credit Cooperatives Employee Pension Rules were to be paid the amount remaining after deducting an amount equivalent to the actuarial present value of pension or lump-sum payment (hereinafter referred to as the "amount of employee pension benefit") from the total amount of retirement benefits (an amount obtained by multiplying the base salary amount by the payment multiplier; the same applies hereinafter) (hereinafter the payment method involving such deduction is referred to as the "inclusive method"). The New Rules maintained the inclusive method as prescribed in the Former Rules, although this method had not been adopted in the payment standards applicable to the persons who had been employees of the appellee since before the Merger. In addition, the amount of lump-sum payment to be refunded to employees as a result of the corporate pension insurance policy held by Credit Cooperative A to be cancelled at the time of the Merger (hereinafter referred to as the "amount of corporate pension refund") was also supposed to be deducted from the total amount of retirement benefits (on the other hand, the appellee did not have any corporate pension insurance).

Thus, according to the payment standards under the New Rules after the Changes to the Standards, the total amount of retirement benefits would be one-half of or smaller than the conventional total amount, while maintaining the inclusive method and deducting both the amount of employee pension benefit and the amount of corporate pension refund from the total amount of retirement benefits. In consequence, the amount of retirement benefits that would be paid under the New Rules came to be considerably smaller than the amount of retirement benefits that would have been paid under the Former Rules.

(4) At the briefing meeting for employees held by Credit Cooperative A on December 13, 2002, a managing director of the cooperative distributed the draft consent form mentioned in (2) above to each employee and explained the calculation method for the amount of retirement benefits after the Changes to the Standards as described in (3) above.

Following the briefing meeting, said managing director presented a schedule of retirement benefits that he/she had prepared (hereinafter referred to as the "Schedule of Retirement Benefits"), individually to the eight appellants, who were in the managerial positions at Credit Cooperative A at that time (hereinafter referred to as the "appellants who were in the managerial positions"), and provided a copy of the schedule to those who requested it. The Schedule of Retirement Benefits was prepared for the purpose of calculating the amount of reserves for retirement benefits that should be secured at the time of the Merger, and the amount of reserves indicated therein was calculated based on the calculation method for the amount of retirement benefits after the Changes to the Standards, on the assumption that the amount of retirement benefits payable at the end of December 2002 would be derived from ordinary retirement.

(5) A. On December 20, 2002, Credit Cooperative A's managing director and auditors presented a consent form marked with said date (hereinafter referred to as the "Consent Form") to 20 managerial employees including the appellants who were in the managerial positions, and requested them to affix their signatures and seals to the Consent Form, telling them that the Merger would fail if they did not consent to it, and then all of these managerial employees affixed their signatures and seals to the form as requested. The Consent Form described the details of the Changes to the Standards that had been approved by the joint council mentioned in (3) above and the outline of the payment standards under the New Rules, and it stated that the signatories would consent to the working conditions after the Merger as described therein.

B. On the same day, Credit Cooperative A's representative director and the chair of the executive committee of the cooperative's labor union (hereinafter referred to as the "Labor Union") signed their names in their own hand or by other means on, and affixed their seals to, a collective agreement form stating that the payment standards under the New Rules would apply as the payment standards after the Merger (hereinafter this document is referred to as the "Collective Agreement Form," and the collective agreement based thereon is referred to as the "Collective Agreement"). According to the charter of the Labor Union, the Labor Union has a plenary assembly and executive committee as its organs and also includes the chair of the executive committee and other officers, and the chair of the executive committee is to represent the Labor Union and presides over its business.

(6) The Merger took effect on January 14, 2003, and the New Rules came into force as of that day.

(7) On February 16, 2004, the appellee further underwent a merger with three credit cooperatives in Prefecture C (hereinafter this merger is referred to as the "2004 Merger") and changed its name to the current name.

Prior to the 2004 Merger, a document to explain to employees about their working conditions after the merger was prepared, under the title of "Instruction on Explanation to Employees on the New Working Conditions after Merger" (this document is hereinafter referred to as the "Instruction on Explanation"). This document stated the following matters: [i] As retirement benefits for the length of service before the merger, an amount calculated based on the retirement payment rules that have been applicable to the respective employees before the merger would be paid to the employees when they retire after the merger; [ii] retirement benefits for the length of service after the merger would be governed by a new retirement benefit system that is to be set up within three years after the merger; [iii] if, in the calculation of the amount of retirement benefits for the length of service before the merger, the predetermined coefficient by which the base salary amount is to be multiplied differs depending on the reason for retirement, the coefficient for voluntary retirement is to be applied; and [iv] retirement benefits for the length of service after the merger would not be paid to employees who retire voluntarily before the new retirement benefit system is set up (hereinafter the changes to the retirement benefit payment standards mentioned in [iii] and [iv] above are referred to as the "2004 Changes to the Standards").

The appellee's representative director instructed the branch managers and the screening department manager of District D General Headquarters to provide a verbal explanation of the details of the changes to the working conditions as described in the Instruction on Explanation to the employees of their respective divisions and make them understand such details. Following this, around February 2, 2004, the branch managers, etc. read aloud to the employees of their respective divisions the part of the Instruction on Explanation which described the changes to the working conditions, and then the branch managers, etc. and the employees of the respective divisions (including the appellants) signed their names in the column of "Names of Persons Who Consent to Work under the New Working Conditions" in the document titled "Report on Explanation to Employees on the New Working Conditions after Merger" (hereinafter referred to as the "Report").

(8) On April 1, 2009, the appellee put into force the Rules for Retirement Benefits for Employees that prescribe the new retirement benefit system applicable after the 2004 Merger (hereinafter referred to as the "2009 Rules"). Among the appellants, five persons retired before the 2009 Rules were put into force, and the remaining seven persons retired after the enforcement of the rules.

With regard to retirement benefits for the length of service before the 2004 Merger, the payment standards after the Changes to the Standards and the 2004 Changes to the Standards were applied in relation to all of the appellants, and as a result, the total amount of deduction corresponding to the amount of employee pension benefit and the amount of corporate pension refund came to be larger than the total amount of retirement benefits obtained by multiplying one-half of the monthly amount of salary at the time of retirement by the number of years in service and the coefficient for voluntary retirement. In consequence, no retirement benefits were to be paid to the appellants. With regard to retirement benefits for the length of service after the 2004 Merger, the payment standards after the 2004 Changes to the Standards were applied to, among the appellants, those who had retired voluntarily after the 2009 Rules were put into force. In consequence, these appellants did not receive any retirement benefits.

3. Given the facts mentioned above, the court of prior instance determined as summarized below and dismissed all of the appellants' claims.

(1) The appellants who were in the managerial positions, by seeing the Schedule of Retirement Benefits presented thereto, obtained specific information of the tentative amount of retirement benefits that they were supposed to receive if they continued to work for the appellee after the Merger as well as the calculation method thereof, and they affixed their signatures and seals to the Consent Form after understanding its content, and thus they can be deemed to have consented to the Changes to the Standards by signing and sealing the Consent Form. Consequently, the Changes to the Standards by agreement have taken effect with regard to the appellants who were in the managerial positions.

Furthermore, since the appellants signed the Report of their own will, they can be deemed to have consented to the 2004 Changes to the Standards. Consequently, the 2004 Changes to the Standards by agreement have taken effect with regard to the appellants.

(2) Under the charter of the Labor Union, the chair of the executive committee is vested with the authority of comprehensive representation for concluding the Collective Agreement. Therefore, even if the conclusion of the Collective Agreement had not gone through the decision or other procedure by the plenary assembly or executive committee, it cannot be deemed to have been concluded by a person without authority only because of such circumstances. Consequently, the 2004 Changes to the Standards by the conclusion of the Collective Agreement have taken effect with regard to the four appellants who had been members of the Labor Union (they are different from the appellants who were in the managerial positions; hereinafter referred to as the "appellants who were union members").

4. However, we cannot affirm any part of the determination by the court of prior instance mentioned above, on the following grounds.

(1) Agreement on the Changes to the Standards and the 2004 Changes to the Standards

A. Working conditions, which constitute the content of a labor contract, may be changed by an individual agreement between a worker and an employer, and it is construed that the same applies even where working conditions as prescribed in the rules of employment are changed in a manner disadvantageous to a worker, except for the rule that it is necessary to change the rules of employment in order to reach an agreement (see Articles 8 and 9 of the Labor Contract Act). However, where changes to working conditions proposed by an employer are related to wages and retirement benefits, even if a worker performs an act by which he/she accepts such changes, it is inappropriate to consider immediately from said act that the worker has consented to the changes, because the worker is in the position where he/she is hired by the employer and subjected to the employer's command and has only a limited ability to gather information based on which he/she can make his/her own decision. Therefore, careful determination should be made as to whether or not the worker has consented to the changes. Accordingly, it is appropriate to construe that determination as to whether or not a worker has consented to changes to his/her working conditions concerning wages and retirement benefits as prescribed in the rules of employment should be made not only by considering whether the worker has performed an act by which he/she accepts the changes, but also from the perspective of whether reasonable grounds exist objectively for finding that the worker has performed said act of his/her own free will, and in order to consider the latter point, it is necessary to take into account factors such as the content and degree of the disadvantage that may be caused to the worker due to the changes, the circumstances leading up to the worker performing said act and the manner in which he/she performed it, and the content of the information or explanation provided to the worker before his/her performance of said act (see 1969 (O) No. 1073, judgment of the Second Petty Bench of the Supreme Court of January 19, 1973, Minshu Vol. 27, No. 1, at 27, 1988 (O) No. 4, judgment of the Second Petty Bench of the Supreme Court of November 26, 1990, Minshu Vol. 44, No. 8, at 1085, etc.).

B (a) From this standpoint, we examine whether the appellants who were in the managerial positions consented to the Changes to the Standards. The Changes to the Standards were designed to partially change the payment standards under the Former Rules with regard to the retirement benefit payment standards applicable to Credit Cooperative A's employees on the occasion of the Merger that was effected in order to avoid the cooperative's failure. The appellants who were in the managerial positions received an explanation that their consent to the Changes to the Standards was requisite to achieve the Merger, and then affixed their signatures and seals to the Consent Form that stated that they would consent to the Changes to the Standards. In the draft consent form mentioned in 2.(2) above, which had been distributed to the employees at the briefing meeting held before this affixing of signatures and seals, it was stated that the same level of payment as that under the retirement benefits payment standards applicable to the persons who had been employees of the appellee since before the Merger would be guaranteed. However, according to the payment standards under the New Rules after the Changes to the Standards, the total amount of retirement benefits would be one-half of or smaller than the conventional total amount, while maintaining the inclusive method and deducting both the amount of employee pension benefit and the amount of corporate pension refund from the total amount of retirement benefits. As mentioned in 2.(8) above, as a result of the coefficient for voluntary retirement having been applied in the calculation of the amount of retirement benefits to be paid to the appellants upon their retirement for the length of service before the 2004 Merger, no retirement benefits were to be paid in relation to all of the appellants. In view of these facts, it can be said that the payment standards under the New Rules after the Changes to the Standards were very likely to lead to the situation where no retirement benefits were to be paid if the coefficient for voluntary retirement was to be used in the calculation of the amount of retirement benefits, and it can also be said that, contrary to what was stated in the abovementioned draft consent form, said payment standards were extremely imbalanced when compared with the payment standards applicable to the persons who had been employees of the appellee since before the Merger, which did not adopt the inclusive method.

In light of the content, etc. of the disadvantage that may be caused due to the Changes to the Standards and the circumstances, etc. leading up to the affixing of signatures and seals to the Consent Form, the appellants who were in the managerial positions cannot be deemed to have been provided with the necessary and sufficient information for considering and deciding by themselves whether to consent to the Changes to the Standards if they were only provided with the information and explanation concerning matters such as the necessity to change the payment standards under the Former Rules, but rather they should have been further provided with the information and explanation concerning the content and degree of the specific disadvantage that may be caused to them in terms of payment of retirement benefits due to the Changes to the Standards, such as the likelihood that no retirement benefits would be paid in the case of voluntary retirement and that the outcome would be contrary to what was stated in the abovementioned draft consent form and extremely imbalanced when compared with the payment standards applicable to the persons who had been employees of the appellee since before the Merger.

(b) However, the court of prior instance determined that the appellants who were in the managerial positions consented to the Changes to the Standards, on the grounds that they knew, from the Schedule of Retirement Benefits presented thereto, the tentative amount of retirement benefits payable after the Merger as well as the calculation method thereof, and then affixed their signatures and seals to the Consent Form after understanding its content. When so determining, the court of prior instance did not fully consider such matters as mentioned in (a) above, namely, the content, etc. of the disadvantage that may be caused due to the Changes to the Standards and the circumstances leading up to the affixing of signatures and seals to the Consent Form. As a result, with regard to the information, etc. provided to the appellants who were in the managerial positions before the affixing of signatures and seals, the court of prior instance only found such facts that an explanation concerning the calculation method for the amount of retirement benefits after the Changes to the Standards was provided at the briefing meeting for employees and that the Schedule of Retirement Benefits indicating the amount of reserves for retirement benefits in the case of ordinary retirement was presented, but it failed to make finding or give consideration sufficiently as to whether any information or explanation concerning the matters mentioned in (a) above was provided to these appellants.

(c) Thus, with regard to the point of whether or not the appellants who were in the managerial positions consented to the Changes to the Standards, the court of prior instance did not fully examine it from the perspective of whether reasonable grounds exist objectively, in light of the circumstances mentioned in (a) above, for finding that these appellants affixed their signatures and seals to the Consent Form of their own free will, but it determined that they gave consent by the affixing of signatures and seals immediately from such facts that they saw the Schedule of Retirement Benefits presented thereto. The determination by the court of prior instance as such is illegal due to errors in the application of laws and regulations resulting from insufficient examination.

C. In order to determine whether or not the appellants consented to the 2004 Changes to the Standards, the issue questioned here is whether or not their signing of the Report is deemed to be their giving consent to the 2004 Changes to the Standards, that is, the use of the coefficient for voluntary retirement in the calculation of the amount of retirement benefits to be paid to the appellants on the premise of applying the New Rules to them. As in the case mentioned in B. above, the court of prior instance, without fully examining the case from the perspective mentioned in A. above, determined that the appellants gave consent immediately from the fact of their signing of the Report, and hence its determination as such is illegal due to errors in the application of laws and regulations resulting from insufficient examination (if the rules of employment were not changed when the 2004 Changes to the Standards were made, the 2004 Changes to the Standards would be held to be based on an agreement stipulating working conditions that do not meet the standards prescribed in the rules of employees and therefore void in accordance with Article 93 of the Labor Standards Act prior to the amendment by Act No. 128 of 2007, without needing to examine and determine whether the appellants consented to these changes).

(2) Conclusion of the collective agreement concerning the Changes to the Standards

The Collective Agreement stipulates the Changes to the Standards in connection with the payment of retirement benefits to members of the Labor Union. Regarding the authority of the chair of the executive committee who affixed his/her signature and seal to the Collective Agreement Form, the charter of the Labor Union provides nothing more than that the chair of the executive committee has authority to represent the union and presides over its business, and therefore the charter cannot be interpreted as vesting the chair of the executive committee with the authority to conclude the Collective Agreement. In that case, in order to establish that the chair of the executive committee had the authority to conclude the Collective Agreement, it may be necessary for the chair to have been vested with such authority by the plenary assembly or executive committee, which is an organ of the Labor Union. However, the court of prior instance made no examination or determination as to such vesting of authority. Thus, the court of prior instance, without fully examining this point but relying only on the provisions of said charter, determined that the Collective Agreement cannot be deemed to have been concluded by a person without authority, and that the Changes to the Standards by the conclusion of the Collective Agreement have taken effect with regard to the appellants who were union members. The determination by the court of prior instance as such is illegal due to errors in the application of laws and regulations resulting from insufficient examination.

5. As explained above, the determination by the court of prior instance involves violation of laws and regulations that apparently affects the judgment. The appeal counsel's arguments are well-grounded in that they allege this point, and the judgment in prior instance should inevitably be quashed. We remand the case to the court of prior instance to have it further examine the points indicated in 4. above.

Therefore, the judgment has been rendered in the form of the main text by the unanimous consent of the Justices.

Justice CHIBA Katsumi

Justice ONUKI Yoshinobu

Justice ONIMARU Kaoru

Justice YAMAMOTO Tsuneyuki