More On Legal & Compliancefrom The Advisor's Professional Library
- The Custody Rule and its Ramifications When an RIA takes custody of a clients funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous investors.
- Books and Records Rule Thorough and complete books and records enable RIAs to demonstrate that they have fulfilled their fiduciary obligations to clients and complied with applicable rules and regulations.
Goldman Sachs now has what is probably its first-ever employee union. Japanese workers at the company, which has four divisions in the country, joined a union after what they saw as tactics to shed employees that flouted Japan's tough labor laws.
According to a Tuesday report in the Japan Times, Goldman, which has been shedding jobs around the world, first initiated layoffs in June of 2011. Among the first to go, according to an employee pseudonymously identified as Adam, were many who had taken paid vacation or unpaid leave after the March earthquake.
CNBC's NetNet blog was cited as the source of a report that employees were told by Goldman Japan after the earthquake that they would not be permitted to work remotely and instead must take vacation time or unpaid leave if they wanted to be with their families.
Additional layoffs followed a couple of months later, with a noticeable departure from the way Japanese—and foreign—employees are generally treated under the country's labor laws. Jun Kabigting, managing director of HR Central K.K., a human resources consultancy based in Tokyo, said in the report that companies cannot force employees to sign such agreements.
When Goldman Japan called employees in and presented them with "mutual separation agreements," several refused to sign them. At that point, said Adam, company tactics changed. He was quoted saying, "One moment you are a valued employee and the next moment they treat you as the enemy."
While at first extending a one-week deadline to sign the agreements to a month, when employees still refused to sign, Goldman then said, according to Adam, that they were being dismissed for performance issues. However, there are also strict regulations about how such dismissals in Japan are handled, including regular reviews and efforts to help employees improve.
Instead, say employees, the company pressured employees harder, failing to provide signed documents to allow employees to remain in the country and even telling one employees real estate agent that the company would no longer serve as a guarantor of his apartment, so that he and his family would have to move.
When negotiations failed to improve conditions, the employees fighting the loss of their jobs first joined the National Union of General Workers Tokyo Nambu (NUGW), then later formed their own union, the Goldman Sachs Japan Employee Union branch (GSJEU), under the umbrella of the other union.
Kabigting, who is also chief community officer for The Japan HR Society, had written in an editorial for The HR Agenda Magazine, titled "Letting Go of Employees: The Japanese Way," that if employees are to be let go for economic reasons, there "must be a business necessity to resort to the reduction of personnel." Before layoffs can be initiated, he wrote, companies must take a number of steps that include putting a hiring freeze in place, cutting overtime and executive salaries, transferring employees, allowing fixed-term contracts to expire, and asking for voluntary retirement.
Noting that Goldman has set aside $10 billion for 2011 bonuses, employees in the union feel that the company has failed to comply with the way things are done in Japan.