Article 31 of the Labor Standards Act stipulates that ‘Where an employer wishes to dismiss a worker for business reasons, there must be an urgent necessity in relation to business. It shall be deemed that there is such an urgent business necessity in the case of business transfer, merger or acquisition of the business to prevent business deterioration. ( ) the employer shall make every effort to avoid dismissal and shall establish and follow reasonable and fair criteria for the selection of those persons subject to dismissal ( ) Where there is an organized labor union which represents more than half of the workers at a business or business location, the employer shall inform and consult in good faith with the labor union regarding the methods for avoiding dismissals and the criteria for dismissal ( ) at least 60 days before the intended date of dismissal’.

– Thus, the above law clearly states that dismissal for managerial reasons can only be
carried out if justified reasons exist.

There are no special rules for selecting the labor representative, but the representative has to be based on the autonomy of the workers and has to be able to represent their opinions. If a labor-management council is established, and the members represent more than half of the workers, then they are acknowledged as justified representatives of the workers.
Accordingly, if the representative does not represent more than half of the workers, then the representative is not a justified representative, and thus collective dismissal for managerial reasons is invalid.