Company B is going to take over the electronics division of company A, where I am currently working. My current company is saying that my employment relationship will now be transferred to company B. What happens if this promise is not kept? And when I finally retire, do I receive my severance pay from company A or from company B?
If only the sale of assets in that division occurred, it cannot be seen as a transfer of employment relations. This means your labor relationship would continue to remain with company A and severance pay would be from company A.
However, if a company that is organized for a certain business purpose, such as a human or material organization, is to be transferred as a whole while maintaining the same identity, it is referred to as a “transfer of business.” If such a business transfer is made, in principle, the employment relationship with the workers will be inherited in a comprehensive manner by the transferee company—in your case, company B.
If the business is transferred, the employment relationship between the transferor (company A) and the employee is, in principle, transferred to the transferee (company B) in a comprehensive manner, unless there is a special agreement opposing this. If an agreement exists between the parties to the business transfer to exclude employment relations from the transfer, the employment relations will not be inherited. However, since such an agreement is practically dismissal, it would be valid only if there is justifiable reason according to the Labor Standards Act. Dismissing workers simply because a business transfer has occurred or will occur will not be regarded as justifiable.
Moreover, in transfers of business, the employment relations with the workers are also transferred to the transferee (company B), unless there are unusual circumstances otherwise. So unless there is a special agreement, the transferee (company B) must pay severance pay at the time of final retirement, including the period the employee worked for the transferor (company A). However, if the employee submits his/her resignation voluntarily at the time of a business transfer that includes transfer of employment relationships and receives severance pay from company A, the employee may be considered to have consented to the discontinuation of employment. Even so, if the submission of such resignation is a unilateral decision in accordance with the management policy of company A, and occurs as cessation of employment with company A and integration into company B, then even if severance pay was received from company A, the employment relationship will not cease.