Taiwan's Labour Landscape - Expert Perspectives for Effective Hiring and Firing
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Taiwan's Labour Landscape: Expert Perspectives for Effective Hiring and Firing Employment Law Asia Masters March 6, 2013, Hilton Singapore John Eastwood Partner www.eigerlaw.com
description
This presentation addresses the different types of Employment in Taiwan and the HR implication, Updates and Analysis of Major Employment Laws, Taiwan’s Unique Features (3 unique things you must know), and last but not least Managing and pre-empting industrial relations disputes.
Transcript of Taiwan's Labour Landscape - Expert Perspectives for Effective Hiring and Firing
Taiwan's Labour Landscape: Expert Perspectives for Effective Hiring and FiringEmployment Law Asia Masters March 6, 2013, Hilton Singapore
John EastwoodPartner
www.eigerlaw.com
Agenda:
A. Introduction
B. Different Types of Employment and the HR implications1. Mandate vs. Employment Agreements2. Treatment of Overtime3. Fixed-Term Contracts4. Termination and Severance Rights
C. Updates and Analysis of Major Employment Laws
D. Taiwan’s Unique Features: 3 unique things you must know
E. Managing and pre-empting industrial relations disputes
A. Introduction
The Taiwan legal system is based on the civil code systems of Germany and continental Europe.
Major decrease in expatriate population, in line with the return home of many Taiwanese with advanced scientific, technical and MBA degrees.
Labor Standards Act (LSA) provides the rules governing nearly all company-employee relations, while the Labor Pension Act (LPA) has some key provisions that affect pension and severance matters.
B. Different Types of Employment and HR implications
1. Mandate vs. Employment Agreements Employment agreements must follow the minimum standards set out in the Labor Standards Act (LSA), Labor Pension Act, etc. These affect:
■ Permitted grounds for termination
■ Pre-termination notice periods
■ Vacation days
■ Severance rights, and
■ Overtime pay
Top-level managers can be placed under "mandate" agreements inwhich they serve at the pleasure of their board, meaning that formally:
■ They can be removed immediately
■ For or w/o cause
■ No severance owed
2. Treatment of Overtime■ This can be a major stumbling block for multinational companies operating
in Taiwan because assumptions about defining employees as "exempt" or "salaried" will be enough to avoid overtime.
■ Other than the top-level country manager, everybody else will normally need to be paid for overtime work, including senior and mid-level managers.
■ Typical problems erupt at the end of the employment relationship, when employees who feel they have nothing left to lose may suddenly produce saved evidence of uncompensated overtime work.
■ Maintaining control over overtime is important -- a common practice is to set out and communicate prior approval procedures before employees perform overtime work.
3. Fixed-Term Contracts ■ Employment contracts in Taiwan are either: 1) fixed-term or 2) non-fixed-
term, with the intent to ensure that employees are not deprived of appropriate labor rights.
■ Taiwan's LSA doesn't allow "revolving" fixed-term contracts in which there are multiple renewals or repeated terms. Fixed-term contracts are limited to: 1) seasonal work of a non-continuous nature or 2) specified work that can be completed in a set period of time.
■ Under the LSA, a fixed-term contract will be treated as a non-fixed-term contract if the employer breaks these rules.
4. Termination and Severance Rights Taiwan does not have an "at will" doctrine for employment relationships. An employer is limited to statutorily permitted grounds for terminating.
■ A simple dismissal (with full severance rights and notice period) is allowed in several common situations if:
● the company is shutting down
● the ownership of the company is transferred
● the employer suffers economic losses or curtails operations
● the operations are affected by force majeure for more than 1 month
● the employer's business nature is altered, requiring a reduction of employees and there are no suitable job openings
● the employee is deemed incompetent
Termination and Severance Rights, continued ■ A more immediate termination is allowed in a range of
situations, if:
● the employee misrepresents facts at the time of signing
● the employee seriously breaches to contract or work rules
● the employee damages or abuses company equipment.
● the employee intentionally discloses trade secrets
● the employee is sentenced to jail
● the employee is absent for 3 consecutive days or 6 days in a month without justifiable reasons
Termination and Severance Rights, continued If severance must be paid, then the calculation will depend on when the employee was hired, whether the employee is Taiwanese or non-Taiwanese, and the employee's average pay over the previous six months.
■ Employees hired before July 1, 2005 (when the LPA came into force) and non-Taiwanese employees, are subject to the LSA provisions' calculation of 1 month's severance pay per year of service.
■ Taiwanese employees hired on or after July 1, 2005, are subject to the LPA provisions' calculation of 1/2 month's severance pay per year of service, up to a maximum of 6 months' severance.
■ Taiwanese employees hired before July 1, 2005 who opted-into the provisions of the LPA will get a pro-rata blend of the two rates.
■ However, if the employment contract specifies a severance benefit more generous than the legal minimums, that will be deemed to apply.
C. Updates and Analysis of Major Employment Laws
Child labor lawsMinimum wageCriminalization of trade-secret theft and HTC casePersonal data protection issues
D. Taiwan’s Unique Features: 3 unique things you must know
1. Personal Data Protection has become very important with regards to employees and job applicants. Companies have to be very careful about the kinds of information they keep and how securely they keep it.
2. Company work rules are a really important part of your office environment and affect many situations regarding terminating or disciplining employees.
3. The Cross-Strait business environment means that employees who steal trade secrets or want to violate non-competes will go straight to China and attempt to get direct relations with your suppliers and customers.
E. Managing and pre-empting industrial relations disputes
1. Setting out the ground rules and communicating regularly with employees helps to set out expectations that can be very useful for avoiding disputes.
2. Reductions to salary, benefits, or bonuses will often require employee consents, and it is important to have credibility with the employees when asking them to give anything up.
3. Rumors move really fast through Taiwan companies. Once a problem has erupted, make sure you deal with it fast and in a very straightforward manner.
