Employment 2024 Comparisons

The Taiwan Labor Standards Act does not specifically distinguish between blue- and white-collar workers with respect to domestic employees. Instead, this distinction mainly applies to foreign workers under the Employment Service Act, which categorises them into two groups: specialised or technical workers (white-collar) and those primarily engaged in manual labour (blue-collar).

For domestic workers, distinctions under the Labor Standards Act are based on the nature of the employment contracts, distinguishing between definite- and indefinite-term contracts. Additionally, Taiwan recognises apprenticeships, which are regulated separately.

Taiwan’s labour law recognises two main types of employment contracts: indefinite and definite. Definite-term contracts are restricted to specific circumstances, such as temporary, short-term and seasonal contracts, as well as to particular project engagements as stipulated by Article 9 of the Labor Standards Act. The maximum durations for these contracts are as follows: up to six months for temporary or short-term, nine months for seasonal and over one year for project-specific contracts; the latter requires prior notification to the appropriate authority.

Although a written employment contract is not universally mandated in Taiwan, it is required for apprentices as per Article 65 of the Labor Standards Act. Despite this, it is advisable to formalise all employment agreements in writing to ensure clarity and legal compliance. Article 7 of the Enforcement Rules of the Labor Standards Act recommends that employment contracts include key elements such as:

• job description and workplace;
• working hours, breaks and rotational shifts;
• salary details, including payment methods and timing;
• contract terms, termination conditions and retirement policies;
• benefits including severance, pension and bonuses;
• worker responsibilities for expenses;
• safety, health and welfare policies;
• labour training;
• disciplinary and reward systems; and
• other relevant rights and obligations of employees and employers.

Under the Labor Standards Act, the maximum allowable working hours are 8 hours per day and 40 hours per week (Article 30). Overtime is permitted but cannot exceed 12 hours in a single day or 46 hours per month (Article 32). For every four consecutive hours worked, employees are entitled to a minimum break of 30 minutes (Article 35). Additionally, employees should receive one regular day off and one rest day off every seven days (Article 36), and they are entitled to annual paid leave (Article 38).

The Ministry of Labor also provides for flexible work schedules, allowing two-, four- and eight-week flexible working periods for eligible industries and thereby facilitating a more adaptable employment environment.

Part-time employment contracts are subject to the same labour rights as full-time contracts, with specific adaptations to account for reduced working hours as outlined in the “Guidelines for Hiring Part-time Workers”.

Overtime provisions are also governed by the Labor Standards Act, which integrates comprehensive regulations to ensure fair compensation and proper working conditions for all employees.

In accordance with Article 21 of the Labor Standards Act, wages are to be negotiated between the employer and employee but must not fall below the minimum wage. The minimum wage covers remuneration earned during “normal working hours” and excludes overtime payments and bonuses. Notably, Taiwan does not guarantee a 13th-month salary, and there is no specific legislation solely dedicated to setting the minimum wage.

Currently, the Basic Wage Deliberation Committee, initiated by the Ministry of Labor, typically convenes in the third quarter of each year to discuss potential adjustments to the minimum wage.

The Ministry of Labor in Taiwan has recently prepared a draft Minimum Wage Act encompassing 19 articles. This draft outlines the creation of a “Deliberation Council” tasked with holding regular meetings and defines “deliberation reference indicators” to ensure a comprehensive decision-making process regarding minimum-wage adjustments.

Vacation and Leave Entitlements

Employees in Taiwan are entitled to various forms of paid and unpaid leave under multiple legislative frameworks, including the Labor Standards Act, the Regulations of Leave-Taking of Workers and the Gender Equality in Employment Act. The provisions for leave include:

• wedding leave – eight days with full pay;
• bereavement leave – three to eight days with full pay, depending on the relationship to the deceased;
• sickness leave – up to 30 days annually at up to half pay;
• personal leave – 14 days per year without pay;
• military/public leave – full pay (duration not limited);
• menstruation leave – one day per month at half pay (up to three days per year);
• maternity leave – eight weeks, with the pay varying depending on the length of service;
• miscarriage leave – four weeks for pregnancies over three months, one week for pregnancies of two months and above and five days for pregnancies less than two months, with full pay if the employee has been employed for over six months (otherwise, 50% pay);
• pregnancy check-up leave – seven days with full pay;
• pregnancy check-up accompaniment and paternity leave – seven days with full pay;
• parental leave – up to two years until the child reaches three years of age, without employer pay but eligible for an allowance; and
• family care leave – seven days per year, counted within personal leave, without pay.

Overtime Compensation

Employees are generally entitled to overtime pay under the Labor Standards Act for rest-day overtime, regular-leave overtime and holiday overtime. Employers must compensate employees for extended work hours as follows.

• rest-day overtime:
1. for the first two hours, payment is one-third above the normal hourly wage;
2. for two to eight hours, payment increases to two-thirds above the normal hourly wage; and
3. for eight to 12 hours, payment escalates to one- and two-thirds above the normal hourly wage;
• regular-leave overtime:
1. work on regular leave is compensated for at least eight hours; and
2. overtime beyond eight hours on regular leave is paid at double the rate; and
• public holidays overtime:
1. for up to eight hours, pay is equivalent to eight hours at the normal hourly wage;
2. for eight to ten hours, pay increases by one-third of the normal hourly wage; and
3. for ten to twelve hours, pay increases by two-thirds of the normal hourly wage.

Confidentiality and Liability

Regarding confidentiality and non-disparagement, Taiwanese labour law does not specifically mandate these requirements; instead, they are typically governed through employment contract terms.

However, if an employer’s confidential information qualifies as a trade secret protected by appropriate confidentiality measures, employees are prohibited from disclosing such information under the Trade Secrets Act.

In Taiwan, the Labor Standards Act outlines specific conditions under which post-termination non-compete covenants are considered valid and enforceable. These covenants must protect legitimate business interests, particularly concerning employees privy to trade secrets, and must be reasonable in terms of duration, geographical scope and the nature of the restricted activities. Additionally, there is a requirement for employers to provide reasonable compensation for employees who adhere to these restrictions after employment. The enforceable duration for non-compete clauses is capped at two years.

Pursuant to Article 7-3 of the Enforcement Rules of the Labor Standards Act, the enforceability of non-compete clauses also hinges on providing “reasonable compensation” during the non-compete period. Requirements for meeting the definition of reasonable compensation include:

• the monthly compensation must not be less than 50% of the employee’s average monthly wage at the time of resignation;
• the compensation should be adequate to support the employee during the non-compete period;
• the compensation should equate to the losses incurred by the employee due to the restrictions regarding the period, area and scope of occupational activities, as well as prospective employment limitations; and
• other relevant factors that may affect the reasonableness of the compensation should be considered.

Taiwan’s labour law does not explicitly regulate non-solicitation covenants; thus, the enforceability and validity of restrictions against soliciting customers, employees or suppliers post-employment are not specifically addressed.

However, as a best practice, it is generally advisable to include non-solicitation clauses in employment contracts to safeguard business interests without statutory regulation.

Taiwan’s Personal Data Protection Act grants employees specific rights concerning their personal data that are irrevocable and cannot be contractually limited. These rights ensure the employees’ control over their personal information and include:

• the right to inquire about and review personal data held by the employer;
• the right to request copies of their personal data;
• the right to supplement or correct any inaccuracies found in their personal data;
• the right to demand a halt in the collection, processing or use of their personal data by the employer; and
• the right to request the deletion of their personal data from the employer’s records.

These provisions are designed to protect the privacy and integrity of employee data and ensure that employers handle personal information responsibly and transparently.

General Rules

The employment of foreign workers in Taiwan is governed by Articles 42 to 62 of the Employment Service Act and the Regulations Governing Visiting, Residency, and Permanent Residency of Aliens. These laws require employers to obtain employment permits for foreign workers, specify the necessary documentation, define permissible job categories and establish the qualifications required for both employers and employees. The validity period of the employment permit is also stipulated within these regulations.

Employers who hire foreign workers without the requisite authorisation are subject to administrative fines and may face criminal charges, as outlined in Articles 63 and 68 of the Employment Service Act.

Visas

While Taiwan does not impose numerical limits on most short-term visas, there is a specific cap for foreign professionals seeking employment: only 1,000 six-month employment-seeking visas are issued annually under Article 11 of the Act for the Recruitment and Employment of Foreign Professionals. This quota is enforced by directives from the Ministry of Foreign Affairs and the Ministry of the Interior.

Spouses

Spouses and children of foreign workers are eligible to apply for dependent residency; however, this status does not automatically grant them the right to work. Spouses desiring to work must obtain their own work permits under the guidelines set forth in Articles 42 to 62 of the Employment Service Act, as per the Immigration Act and the Regulations Governing Visiting, Residency, and Permanent Residency of Aliens.

This ensures that all foreign workers, including spouses of authorised workers, meet local employment regulations before they can commence employment.

Resident Labour Market Test

There is no requirement for a labour market test in Taiwan as a prerequisite for employers to hire foreign workers, or for the issuance of short- or long-term visas.

In Taiwan, employers must obtain authorisation from the central competent authority before hiring foreign workers, except under special regulations. This involves a review and approval process by the Ministry of Labor, which must be completed before the foreign professional can commence employment. Each employment permit application for foreign professionals can be granted for up to three years, with the possibility of renewal without limitation on the number of extensions. If the foreign professional meets the criteria for specific talents, the permit can be extended for up to five years per application.

Most foreign workers must be hired by an employer and sign an employment contract, which is accompanied by the necessary documentation to apply for a “Work Permit for Foreign Professionals”.

Notably, foreign individuals can also apply directly to the Ministry of the Interior for an Employment Gold Card, which allows them to engage in professional work once approved by the Ministry of Labor after a joint review of their qualifications.

Taiwan currently lacks specific legislation for mobile work except for guidelines issued during the COVID-19 pandemic by the Occupational Safety and Health Administration. These guidelines, titled “Reference Guidelines for Home Office Occupational Safety and Health”, require employers to identify potential hazards in the home office environment, conduct risk assessments, and implement appropriate control measures within a reasonably practicable scope. Employers must also pay attention to the mental and physical health of home workers.

Regarding data privacy, mobile work must adhere to the provisions of the Personal Data Protection Act concerning the collection, processing, and use of personal data by non-governmental agencies.

Taiwanese law does not provide specific regulations regarding sabbatical leave. This type of leave is typically not recognised formally within Taiwan’s regulatory framework, leaving it to the discretion of individual employers to offer sabbatical options as part of their employment policies based on internal company rules or mutual agreements with employees.

As the concept of “new work” evolves, one of the notable trends is desk sharing in co-working spaces, which reflects a shift towards more flexible and collaborative, and less permanently assigned, work environments. This approach offers various benefits such as increased flexibility, reduced company overheads and opportunities for networking. However, it also brings challenges related to data security and personal privacy.

In co-working and desk-sharing settings, the lack of permanent personal workspaces complicates the safeguarding of sensitive information. Companies must implement robust data security policies that address:

• physical document security – ensuring that sensitive paperwork is securely stored and not left unattended on shared desks;
• digital data protection – utilising secure networks for data transmission, employing strong encryption and ensuring that digital devices are protected against unauthorised access;
• confidentiality in open environments – training employees on the importance of maintaining confidentiality when discussing sensitive matters and using privacy screens and designated “quiet zones” for confidential discussions; and
• adapting company policies for flexible workplaces.

Organisations adopting new work models like desk sharing should revise their operational policies to address these challenges. Policies should clearly define expectations for data protection and outline employee responsibilities in shared work environments. Additionally, implementing regular training sessions on data privacy and security can help mitigate risks associated with mobile and flexible work settings.

Foundational Role and Legal Framework

Unions in Taiwan are pivotal organisations formed under democratic principles aimed at upholding and improving the labour conditions and economic status of workers. The primary legislative framework governing the formation and operation of unions is the Labor Union Act, which explicitly affirms every worker’s right to organise and join unions. These rights are essential as they empower workers to collectively negotiate better working conditions and protect their employment rights.

Types of Unions

According to Article 6 (1) of the Taiwan Labor Union Act, unions can be categorised into three types: “enterprise unions”, “occupational unions” and “industrial unions”. This classification helps tailor union activities to the specific needs of different sectors and workplaces.

The Fundamental Labour Rights

The “three rights of labour”, namely the rights to unionise, negotiate collectively and dispute collectively, are fundamental collective rights aimed at improving labour conditions and enhancing social and economic status. These rights are indivisible and closely interrelated, with the right to unionise being particularly crucial as it forms the foundation for collective action and voice.

Collective Bargaining and Dispute Resolution

Unions represent their members in collective bargaining with employers to enhance labour conditions and protect employment rights. Should negotiations fail, the Labor Union Act allows workers to legally strike or engage in collective dispute actions to compel employers to agree to the conditions proposed by the union.

Role and Importance of Unions

Unions are voluntary organisations for workers that embody the right to free association, which is a special and important human right and a core labour standard crucial for supporting democratic and legal order. Additionally, unions play a unique role as a bridge in establishing stable and harmonious labour relations. The Labor Union Act underscores the purpose of union formation to promote worker solidarity, elevate their status and improve their living conditions, thereby acting as a vital component in the social and economic development of Taiwan.

Formation and Legal Rights

In Taiwan, every worker has the right to organise and join unions, as stipulated by Article 4 of the Labor Union Act. Furthermore, Article 11 of the same Act requires a union to initially be formed by at least 30 workers. These workers must organise a preparatory committee, which is responsible for conducting public membership drives, drafting statutes and convening an inaugural meeting. The committee is then required to submit the necessary documentation, including statutes and member directories, to the local competent authority within 30 days after the union’s establishment meeting for official registration.

If the union is organised on a national scale, registration must be sought directly from the central competent authority, namely the Ministry of Labor.

Role in Collective Bargaining

These representative bodies play a crucial role in the collective bargaining process, negotiating on behalf of all members to enhance labour conditions and protect employment rights.

Should negotiations fail, the law empowers workers to legally strike or initiate collective dispute actions to enforce the conditions proposed by the union. This process is foundational in maintaining fair labour practices and protecting worker rights under Taiwanese law.

Legal Framework and Implementation

A collective bargaining agreement in Taiwan is a formal written contract negotiated between an employer (or an employer’s organisation) and a union established under the Labor Union Act. The agreement is structured to manage labour relations and related matters, conforming to the procedural guidelines outlined in the Collective Agreement Act.

Content and Binding Nature

The potential contents of these agreements are comprehensive, including labour conditions like wages, work hours, allowances and safety, as well as organisational matters such as union operations and enterprise facilities. Article 12 of the Collective Agreement Act provides a detailed list of negotiable items that can be included in these agreements.

Ratification Process

According to Article 9 of the Collective Agreement Act, for an agreement to be effective, it must be ratified either by a majority vote at a general or representative assembly of the union or employer group or through written consent from three-quarters of all members.

If the collective bargaining agreement is not ratified according to these stipulations, it lacks legal force until the required approval process is completed. This ensures that all agreements genuinely represent the interests of the members and contribute positively to the labour-management relationship, fostering a stable and harmonious work environment.

Requirements for Dismissal and Procedures Based on Grounds for Termination

Employers must adhere to a fair process before terminating an employee, which varies based on the specific grounds for dismissal. The process must include severance pay, reporting the dismissal to competent authorities and complying with the minimum advance notice period.

Statutory Grounds for Termination

The Labor Standards Act outlines specific conditions under which employment can be terminated, as follows.

Article 11

Termination with advance notice is required for reasons such as operational adjustments or financial difficulties. Specific grounds include business suspension or transfer, operational losses, force majeure events lasting over one month, changes in the nature of business requiring fewer employees and the clear inability of an employee to meet performance expectations.

Article 12

This allows immediate termination without notice due to employee misconduct or other specific severe conditions.

Procedural Requirements

Termination procedures are specified under Articles 11, 13 and 20 of the Labor Standards Act, along with Article 33 of the Employment Service Act, which mandates the following:

• Notification to authorities – employers must notify local competent authorities and public employment service institutions ten days before the employee’s last working day, detailing necessary personal and job-related information.
• Exception for force majeure – in cases of force majeure, the notification period is within three days from the termination date.
• Involuntary separation certificate – employers must issue an involuntary separation certificate to dismissed employees.

Collective Redundancies

The Act for Worker Protection of Mass Redundancy regulates mass terminations, applying when certain criteria are met.

• Small entities – a site with fewer than 30 employees intending to lay off more than ten employees within 60 days.
• Medium entities – a site with 30 to 200 employees planning to lay off more than one-third of its workforce within 60 days, or more than 20 employees in one day.
• Large entities – a site with 200 to 500 employees aiming to lay off more than one-fourth of its workforce within 60 days, or more than 50 employees in one day.
• Very large entities – a site with over 500 employees planning to lay off more than one-fifth of its workforce within 60 days, or more than 80 employees in one day.
• Extensive layoffs – any business entity intending to lay off over 200 employees within 60 days or more than 100 employees in one day.

For collective redundancies, the employer must create a mass redundancy plan and provide written notice at least 60 days prior to the proposed termination date to the local labour authority, the labour representatives from the Labor Management Committee and the employees to be laid off.

Employees affected by collective redundancies are entitled to advance notice or pay in lieu of notice, severance pay and any outstanding bonuses or payments, similar to the conditions in unilateral terminations.

Required Notice Periods and Formalities

Under the Labor Standards Act in Taiwan, employers are required to provide advance notice prior to terminating an employment contract. The length of the notice period depends on the employee’s duration of continuous service:

• less than one year but more than three months – a minimum of ten days’ notice;
• more than one year but less than three years – a 20-day notice period; and
• more than three years of service – a 30-day notice period.

During the notice period, employees are entitled to take up to two days off per week to seek new employment, with full pay for these days. Employers may alternatively choose to offer pay in lieu of notice.

While notice does not necessarily have to be in writing, it is highly recommended to provide written notification to avoid any misunderstandings or disputes.

Severance Pay Requirements

Severance pay is mandated under specific conditions, as outlined in the Labor Standards Act and the Labor Pension Act. The calculation of severance pay depends on whether the employment falls under the old pension system or the new pension system, as follows.

• Old pension system (Labor Standards Act pension system):
1. employees receive one month’s average salary for each year of continuous service; and
2. for periods of service less than a year, severance pay is calculated on a pro rata basis, with periods less than a month considered as a full month.
• New pension system (Labor Pension Act pension system):
1. employees are entitled to 0.5 month’s average salary for each year of service, with a cap at six months’ average salary; and
2. severance for service periods less than a year is also calculated pro rata, subject to the six months’ average salary cap.

Procedure and External Authorisation

The formalities for termination involve notifying the employee in advance according to the stipulated notice periods. There is no specific requirement for external advice or authorisation for the termination process under Taiwan labour law. However, ensuring compliance with all legal provisions, including appropriate documentation and adherence to severance pay regulations, is crucial for the lawful termination of employment contracts. This structured approach helps protect both the employer and the employee from potential legal complications.

Definition and Grounds for Summary Dismissal

Summary dismissal, or dismissal for serious cause, allows an employer to terminate an employment contract immediately, without the requirement of a notice period, due to severe misconduct or specific situations that necessitate such immediate action. According to Article 12 of the Labor Standards Act, grounds for summary dismissal include:

• misrepresentation – providing false information at the time of the contract signing that leads to employer harm;
• violent or insulting behaviour – acts of violence or severe insults directed at the employer, their family, agents or coworkers;
• criminal conviction – if an employee is convicted and receives a non-suspended temporary imprisonment in a final judgment;
• breach of contract or work rules – serious violations of the employment agreement or workplace regulations;
• deliberate damage or disclosure – intentionally causing damage to the employer’s property or revealing confidential information resulting in employer harm; and
• unauthorised absences – absence from work without a valid reason on three consecutive days or on six days within a month.

Procedure and Formalities

When proceeding with a summary dismissal, the employer must ensure that the reasons for termination fall strictly under the categories listed in Article 12 of the Labor Standards Act. The dismissal process involves:

• documentation – thoroughly documenting the reasons and evidence supporting the dismissal decision, which should clearly match one of the valid grounds under Article 12;
• communication – communicating the decision to the employee, ideally in writing, to provide a clear record of the dismissal and its reasons; and
• immediate effect – the dismissal takes effect immediately, with the employee ceasing work and obligations to the employer from the date of dismissal.

Consequences of Summary Dismissal

Aspects of summary dismissal include the following:

• no notice period required – employers are not obligated to provide a notice period when terminating an employee for serious cause under Article 12;
• no severance pay – the employee is not entitled to severance payment when dismissed for serious cause as defined in Article 12; and
• legal protection – employers must be cautious and ensure the dismissal is justifiable under the stipulated conditions to avoid legal challenges or claims of unfair dismissal from the employee.

Permissibility and General Practices

Termination agreements are permissible in Taiwan. While Taiwanese law does not mandate specific terms to be included in termination agreements, it is commonly recommended to specify the amount of severance payment and to establish the agreement as a final settlement. This means that post-agreement, neither the employer nor the employee can make any further civil or criminal legal claims against each other.

Procedures and Formalities

Employers are required to notify local competent authorities and public employment service institutions ten days before the employee’s last working day. This notification should include details such as the dismissed employee’s name, gender, age, address, phone number, and job position, the reason for layoff and the necessity for employment counselling services.

Statutory Requirements for Enforceable Releases

According to Article 71 of the Civil Code, employees generally cannot waive statutory and contractual rights to potential employment claims in advance. This provision ensures that legal acts contravening mandatory or prohibitive statutes are void. Specifically, any pre-emptive relinquishment of rights to severance payments and pensions before these rights accrue is considered invalid.

Post-termination agreements where an employee consents to waive their rights to severance pay and pensions may hold validity provided these claims have already materialised. This acknowledges that such rights, once accrued, become independent rights that could theoretically be waived. Such waivers, agreed upon after employment has expired or been terminated, reflect the principle of private autonomy, allowing agreements on severance and pensions even if they result in lower compensation than legally prescribed.

Judicial Scrutiny and Fairness

The validity of these post-termination waivers, especially in cases where employees forgo their claims entirely, may still be subject to judicial scrutiny. Courts often examine whether such agreements were made under duress or deception to safeguard the interests of employees. Therefore, while post-termination waivers are theoretically permissible, they must not exploit the employee’s position, ensuring that any consideration given (economic or otherwise) is fair and freely agreed upon without coercion or fraud.

In summary, while termination agreements are allowed in Taiwan, they must be carefully crafted to ensure they do not contravene statutory protections, particularly regarding severance and pension rights.

Specific Protections Against Dismissal

In Taiwan, the law provides specific protections against the dismissal of employees who belong to certain vulnerable categories or who are involved in particular activities. It is unlawful to dismiss an employee for reasons such as:

• pregnancy and maternity – employees are protected from dismissal due to pregnancy, during maternity leave and post-childbirth;
• occupational accidents – employees who suffer work-related injuries or illnesses are safeguarded from being dismissed while they are recuperating;
• participation in labour-management dispute resolution – this includes involvement in mediation, arbitration or any decisions arising from such disputes;
• union membership and activities – employees cannot be dismissed for joining a labour union, participating in union activities or engaging in lawful union-organised events;
• legal actions or complaints – protection is extended to employees who take lawful legal actions or lodge complaints against their employers; and
• whistle-blowing – employees who report or expose any illegal activities within the organisation are protected from retaliation, including dismissal.

Legislative Framework

Acts in the legislative framework include the following.

• Gender Equality in Employment Act (Article 11) – this act explicitly prohibits any work rules, labour contracts, or group agreements that require employees to resign or take unpaid leave due to marriage, pregnancy, childbirth or childcare responsibilities. Any violations of this provision render the stipulations or agreements invalid, and any resultant terminations are deemed without effect.
• Labor Standards Act (Article 13) – this provision protects employees who are on leave due to work-related injuries or are receiving medical treatment as specified under the act. Employers are prohibited from terminating such employees unless the business is unable to continue due to extraordinary circumstances, such as natural disasters. Even in these cases, termination requires prior approval from the competent authorities.

Implications for Employee Representatives

Employee representatives, particularly those involved in union activities or labour-management dispute resolution, are afforded additional protections to ensure they can perform their representative roles without fear of reprisal or dismissal. This safeguard is crucial for maintaining fair and just labour practices, as it allows representatives to advocate effectively for the rights and interests of their constituents.

These protections are designed not only to safeguard the rights of employees during periods of vulnerability but also to ensure that employees are not discriminated against or unfairly dismissed for upholding their rights or fulfilling their responsibilities in workplace relations.

Grounds for a Wrongful Dismissal Claim

Wrongful dismissal occurs when an employer terminates an employee without adhering to the legal grounds stipulated under the Labor Standards Act (Articles 11 and 12) or specific contractual terms agreed upon in the employment agreement, provided these terms do not contravene existing laws. Grounds for a wrongful dismissal claim include:

• dismissal without meeting the statutory reasons for layoffs (economic or operational) or disciplinary dismissals as defined in the law; and
• termination that violates the agreed terms of the employment contract that are themselves lawful.

Consequences of a Wrongful Dismissal Claim

Employees who believe they have been wrongfully dismissed have the right to seek mediation through local government employment centres or to file a civil lawsuit. Most Taiwanese courts have specialised divisions handling labour-related cases to facilitate this process. If the court finds the dismissal to have been unlawful, the consequences for the employer can include:

• payment of the employee’s salary for the period they were unemployed due to wrongful dismissal;
• compensation for any loss or damages suffered by the employee as a result of the dismissal; and
• potential reinstatement of the employee to their former position.

Overall, a successful wrongful dismissal claim may entitle the employee to accrued salary, reasonable compensation and possible reinstatement.

Grounds for Anti-discrimination Claims

Taiwanese labour law prohibits discrimination on various grounds including race, class, language, thoughts, religion, political affiliation, place of origin, gender, sexual orientation, age, marital status, appearance, features, physical or mental disability, astrological sign, blood type or past union membership.

Discrimination can relate to any aspect of employment including hiring, firing, training, benefits, pay and termination.

Burden of Proof

In Taiwan, the initial burden of demonstrating the existence of discriminatory conduct typically falls on the complainant. However, the burden of proving that discrimination did not occur rests with the employer.

This means the employee must initially show plausible evidence of discrimination, after which the employer must demonstrate that their actions were not discriminatory.

Damages and Relief for Discrimination Claims

If an employer is found to have discriminated against an employee, they may face fines ranging from NTD300,000 to NTD1.5 million. Employees can file complaints with local government offices or labour bureaus. Furthermore, any retaliatory actions by the employer, such as dismissal or salary reduction in response to complaints, are deemed invalid under the Labor Standards Act.

In Taiwan, the process for handling employment disputes remains primarily traditional, with physical court appearances being required. Despite the increasing global trend towards digitalisation in judicial processes, Taiwan’s legislation currently does not support conducting employment dispute hearings via videoconferencing as a standard practice. Exceptions can be made, however, if a judge or mediation committee specifically agrees to allow videoconferencing based on the unique circumstances of a case.

This approach reflects a cautious stance towards the digitalisation of court proceedings, particularly in employment disputes where personal interactions and direct negotiations can be crucial. As digital tools and platforms become more integrated into various legal processes globally, there may be future revisions in Taiwan to this policy to allow greater flexibility and accessibility in handling employment disputes digitally.

Specialised Employment Forums

Taiwan has established specialised procedures for handling employment disputes, including alternative dispute resolution mechanisms and designated courts.

Alternative Dispute Resolution for Employment Matters

The Department of Labor plays a crucial role in mediating employment disputes before they escalate to formal litigation; how this process works is detailed in the following.

• Initial mediation by the Department of Labor:
1. the Department conducts a basic investigation of the evidence provided by both parties;
2. mediation is facilitated by a single mediator and is free of charge; and
3. the process typically lasts up to 20 days but, if referred to a mediation committee, can extend from 42 to 49 days.
• Court mediation and litigation:
1. if mediation through the Department of Labor fails, the aggrieved party may file a lawsuit at the District Court;
2. before the trial commences, the judge will attempt a mediation period;
3. under the Labor Incident Act, mediation is mandated before trial, and one of the three labour mediation committee members will be the judge who may later oversee the trial if mediation fails;
4. court-mandated mediation may incur a fee depending on the nature of the claim (proprietary or non-proprietary); and
5. according to the Labor Incident Act, court-mandated mediation should conclude within three months; if the case proceeds to trial, the first instance trial should be concluded within six months.

Class Action Claims

In the realm of employment law, class or collective actions are permitted, primarily facilitated through labour unions. Key points include the following.

• Legal framework:
1. labour unions can initiate class action lawsuits on behalf of employees, as permitted by Article 44-1 of the Civil Procedure Act and Article 40 of the Labor Incident Act; and
2. these provisions allow labour unions to represent their members collectively, providing a unified legal front in disputes affecting multiple employees.
• Representation in court:
1. labour unions play a significant role as representatives in court for collective actions, enhancing the efficiency and effectiveness of the legal process by consolidating similar claims into a single proceeding.

This specialised approach to employment litigation and dispute resolution in Taiwan ensures that both individual and collective employment grievances are handled efficiently, with opportunities for resolution through mediation before escalating to more formal legal proceedings.

Possibility and Enforceability of Arbitration

In Taiwan, arbitration is indeed a viable method for resolving employment disputes outside of traditional court proceedings. This alternative dispute resolution mechanism is supported by the framework provided under the Act for Settlement of Labor-Management Disputes.

Procedure for Initiating Arbitration

According to Article 26 of the Act for Settlement of Labor-Management Disputes, the process for initiating arbitration requires the parties involved to prepare and submit a written application for arbitration to the competent authority. This submission must adhere to the specific procedures and requirements outlined in the Act, ensuring that all necessary documentation and details are properly presented.

Legal Force of Arbitration Decisions

Decisions made through arbitration in labour disputes carry the same legal force as final judgments made by courts. This equivalency means that:

• an arbitration award pertaining to adjustments in labour disputes is considered a court’s judgment between the parties involved;
• if one of the parties is a union, the arbitration award is treated as a collective agreement between the parties; and
• if the parties reach a settlement during the arbitration process, this must be reported to the local government for record-keeping and is considered as binding as a mediation agreement established through labour dispute mediation.

Pre-dispute Arbitration Agreements

Regarding the enforceability of pre-dispute arbitration agreements, while the legal framework allows for arbitration, the specifics regarding the enforceability of such agreements before a dispute arises typically depend on the agreement’s adherence to the legal standards set by the Act for Settlement of Labor-Management Disputes.

Employers and employees are encouraged to clearly define the terms and conditions of any arbitration agreement within the scope of this Act to ensure its enforceability.

In summary, arbitration serves as an effective and legally binding alternative to court litigation for resolving employment disputes in Taiwan, provided the involved parties adhere strictly to the legislative guidelines.

In Taiwan, the issue of covering legal costs, including attorney’s fees, in labour disputes is regulated with specific provisions to aid employees under certain conditions.

Court Fees

Employees who meet specified criteria can apply for reduced court fees, providing financial relief during the process of seeking justice. This concession is designed to make the legal process more accessible to employees who might otherwise be deterred by the costs associated with litigation.

Attorney’s Fees

As per the current legal framework in Taiwan, the following applies.

• The prevailing party in a labour dispute can request the losing party to cover the attorney’s fees, but this is generally limited to the costs incurred during the third (final) instance in the litigation process. This provision ensures that the financial burden of prolonged legal disputes can be mitigated for the successful party at the culmination of the legal proceedings.
• Additionally, employees who meet certain conditions may apply for a government subsidy to cover the attorney’s fees. This support aims to reduce the financial barriers that might prevent workers from seeking legal redress in employment disputes.

These measures reflect Taiwan’s approach to balancing the financial aspects of legal disputes, ensuring that employees have the support necessary to assert their rights without being overwhelmed by the potential costs.