OSAKA — Nearly 100 employees of the Credit Union Osaka Koyo — due to transfer its operations to Osaka Shomin Credit Union in August — filed suit Wednesday seeking to secure employment after the transfer and 100,000 yen compensation payments for psychological pain.
The 97 plaintiffs claim that dismissal would be unlawful because the transfer of operations is a de facto merger, meaning employment contracts, deposits and loans of Osaka Koyo have to be taken over by Osaka Shomin.
According to the transfer contract concluded in August, Osaka Shomin will take over the assets and loans of Osaka Koyo but not its employment contracts. Osaka Shomin will sign new contracts with former Osaka Koyo employees only if it deems it necessary.
So far, 133 of 320 Osaka Koyo employees are expected to be rehired by Osaka Shomin. Another 116 wish to retain their jobs. Among the 97 plaintiffs, 25 are to be rehired but joined the suit because their new contract terms are not at a par with current ones, lawyer Takenobu Kawamura said.
According to the prefecture’s May 1998 bailout plan, 10 troubled credit unions in the prefecture, including Osaka Koyo, will transfer their operations to Osaka Shomin and two other credit unions, all of which will receive a capital injection from a newly created fund. The Resolution and Collection Bank Ltd. would then purchase the bad loans of the 10 institutions.
At the end of March 1998, Osaka Koyo was about 70 billion yen in debt.
A 66 billion yen fund for the three credit unions was launched in December with the prefectural government providing 30 billion yen.
The prefectural government, responsible for the supervision of credit unions, said that it is trying its best to secure jobs for those who will not be rehired. The suit was filed with with the Osaka District Court against the two credit unions and the Osaka Prefectural Government.
Prefectural government officials said that they will consider how to deal with the suit in cooperation with Osaka Koyo and Osaka Shomin.
They also said the prefectural government will make its utmost efforts to complete the reorganization of the credit unions, placing priority on protecting depositors and those who have borrowed money from the institutions, the officials said.