The Taiwan Labor Standards Law (LSA) provides strict measures protecting dismissed employees, and Taiwan employers are required to fully comply with these termination requirements when dismissing their employees. Unlike jurisdictions such as the United States, there is no 'at-will' employment in Taiwan. According to the LSA, employers can only terminate their employees when at least one of the statutory situations set forth in Article 11 or Article 12 has been met. Therefore, employers need to first determine whether the intended termination fits within any of the following statutory termination causes. If so, then a termination can be categorized as being one without notice or with notice, depending on the circumstance.
a) at the time of entering into the employment agreement, the employee made a false or misleading representation that is likely to cause harm to the employer b) the employee commits a violent act or an act of gross insult against the employer, the family members or agents of the employer or fellow employee; c) the employee has been sentenced to imprisonment in a confirmed judgment, unless the employee otherwise receives a suspended sentence or a decree allowing payment of a fine in lieu of imprisonment d) the employee commits a material breach of the employment agreement or a serious violation of work rules e) the employee intentionally damages machinery, tools, raw materials, products or other property of the employer; or intentionally discloses any technological or confidential business information of the employer, thereby causing harm to the employer f) the employee is, without justifiable reason, absent from work for three consecutive days, or six days in a month.
a) where the employers' business is suspended or has been transferred b) where the employers' business suffers operating losses or business contractions c) where force majeure necessitates the suspension of business for more than one month. d) where a change in the nature of business necessitates the reduction of workforce and the terminated employees cannot be reassigned to other suitable positions e) a particular worker is clearly not able to perform satisfactorily the duties required of the position held.
However, Taiwanese courts generally treat unilateral termination by the employer as a last resort, which makes it very difficult to terminate an employee without a compelling case and solid evidence. The jurisdiction in this respect, is an employee friendly one. Accordingly, employers should consider the following criteria set by the courts in the wrongful termination litigations:
We are seeing an increase in the number of employee complaints either with the labor bureau or the courts for wrongful terminations. If an employee wins the wrongful termination litigation, he or she may be reinstated and receive back pay for the compensation lost. Therefore, it is important to seek legal assessment of the strength of the termination and collect sufficient evidence to defend a claim if any before the court. If the termination case is not strong as assessed, then a mutual termination with a higher severance pay may be considered to avoid future disputes.
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. Any views expressed herein are those of the author(s) and not necessarily those of the law firm’s clients.