Taiwan - An Introduction Of The Labor Matters Act.

Legal News & Analysis - Asia Pacific - Taiwan - Labour & Employment

4 February, 2019

 

To protect labor rights and to establish specific procedural rules for resolving disputes over labor matters, the Labor Matters Act (“LMA”) was passed by the Legislative Yuan on November 9, 2018, and published by the President on December 5. The implementation date of the Act is to be decided and announced by the Judicial Yuan.

 

The LMA, containing 53 articles in total, is a special law to the Code of Civil Procedures (“CCP”).  The LMA provides for specific procedural rules applicable to disputes over the so-called “labor matters.” 

 

Currently, there are only a few special laws to the CCP besides the LMA, including the Non-Litigious Act, Family Matters Act, Juvenile Delinquency Matters Act, and the recently-passed LMA.  This shows the significance of the LMA as well as the emphasis that has been placed upon enhancing labor welfare by the legislators in recent years. 

 

The LMA’s legislative purpose, as stated in Art. 1 of the Act, is “to resolve labor matters efficiently, appropriately, professionally, effectively, and equitably, to protect the rights and interests of both workers and employers, and to facilitate a harmonious labor-management relationship, so as to foster a healthy society and a harmonious social life.” 

 

To achieve such legislative goals, the definition of the “labor matters” in the LMA should cover as broad a scope as possible of the disputes that are likely to occur between workers and employers.  According to Art. 2 of the LMA, “labor matters” covers three broad types of disputes: (1) civil disputes arising from labor-management relationships, such as disputes over labor agreements, resolutions of labor-management conferences, work rules, etc.; (2) civil disputes arising from business-education cooperation projects; and (3) tort claims arising from labor-management relationships, such as violation of prohibition against workplace gender discrimination, employment discrimination, occupational injuries, etc.

 

To achieve the goals of resolving labor matters “efficiently, properly, professionally, effectively, and equitably”, the LMA provides for various rules applicable to the labor court proceedings.  For example, Art. 4 provides that all levels of courts should establish a labor branch to handle the labor matters, and the labor branch judges should have relevant educational or practical experience in the field of labor laws; Art. 16 provides that the labor matters are by default subject to a mandatory mediation process, and Art. 20 provides that the mediators should also have educational or practical experience in the field of labor-management matters.  These provisions all illustrates the requirement of “professionality” under the LMA.  Further, according to Art. 32, when hearing a labor matter, the court should as a general rule conclude the oral-argument in one hearing, and the court of first instance should conclude the trial within 6 months.  Contrastingly, it is very common for a first instance court to spend over a year to hear and conclude a general civil dispute.  As such, Art. 32 illustrates the requirements of “efficiency” and “effectiveness” prescribed in the LMA.  Moreover, according to Art. 33, when hearing a labor matter, the court should clarify and instruct the parties to state necessary facts, and the court may investigate necessary evidence on its own initiative.  Compared to a general civil litigation that adopts the so-called “adversarial system”, the labor court should rather adopt the so-called “inquisitorial system”.  This is due to said requirements of “equality” and “appropriateness” in the LMA.

 

Many procedural rules set forth in the LMA clearly indicate the legislators’ intention to favor the protection of workers over employers.  This deserves employers’ special attention before the implementation of the Act, and the employers should begin to contemplate responsive measures to deal with the potential impacts following the implementation of the Act.  For example, Art. 12 of the LMA provides that, to lower the barrier for workers to initiate a litigation, the required court fees for matters including verification of existence of employment relationship, claims for unpaid wages, and court fees for filing a complaint, appealing a judgement, and enforcing a judgment should be reduced or temporarily waived.  In addition, there are various rules that shift the burden of proof from the workers to the employers under the LMA. 

 

For example, for disputes over wages, if the worker has proved that a payment he/she received from the employer was based on the labor-management relationship between the parties, then such payment should be presumed to constitute a part of the worker’s wages (Art. 37); a worker is entitled to the presumption that he/she has obtained the employer’s consent to work during and throughout the attendance hours as recorded in the attendance records (Art. 38).  In Chapter 4 of the LMA, “Injunctive Procedures”, the court is further authorized to, per the worker’s application, grant an injunctive relief ordering the employer to pay wages or to continue employing the worker prior to the conclusion of a labor matter action for matters including claims for wages, damages for occupational injuries, verification of existence of employment relationship, etc.  This way, the hardships that the worker may normally face when undergoing a prolonged litigation could be minimized.  

 

According to Art. 51 of the LMA, the Act is also applicable to labor matters occurred before the implementation of the Act.  Taking a severance payment case for instance, the Act is likely to apply retrospectively to a dispute over unpaid severance payment that arose 15 years before the implantation of the Act since in practice most of the courts held that a claim for severance payment is subject to a 15-year statute of limitations.  As such, the potential impacts that the implementation of the Act may bring are significant and deserve the attention of all employers, who should start contemplating responsive measures as early as possible in order to be prepared for the impacts once the Act enters into force.

 

 

For further information, please contact:  

 

Max Lee, Tsar & Tsai Law Firm

maxlee@tsartsai.com.tw