By Hung Ou Yang & Shih-Cheng Yen
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An employer may not fire an employee without good cause under Taiwanese laws. The recurring question is whether an employer's reason to fire an employee can satisfy the Taiwanese Labor Standards Act's "good cause" requirement. When an employer does have good cause against an employee, the employer will be further required to give advance notice for terminating the employment relationship if such good cause falls into certain category provided by the Taiwanese Labor Standards Act. There are two main categories of good causes under Taiwanese laws.
Good Causes Which Require Advance Notice
An employer may dismiss an employee but will be required to give advance notice for one of the following causes:
(1) the employers' businesses are suspended or have been transferred;
(2) the employers' businesses suffer operating losses or business contractions;
(3) force majeure necessitates the suspension of business for more than one month;
(4) the change of the nature of business necessitates the reduction of workforce and the terminated employees cannot be reassigned to other suitable positions; or
(5) a particular worker is clearly not able to satisfactorily perform the duties required for the position.
Good Causes Which Do Not Require Advance Notice
An employer that notices one of the following causes occurred may dismiss an employee within 30 days without giving advance notice if:
(1) an employee misrepresents any fact at the time of signing of a labor contract in a manner that might mislead his or her employer and thus caused him or her to sustain damage therefrom;
(2) an employee commits a violent act against or grossly insults the employer, his or her family member or agent of the employer, or a fellow worker;
(3) an employee is in serious breach of the labor contract or in serious violation of work regulations;
(4) an employee deliberately damages or abuses any machinery, tool, raw materials, product or other property of the employer or deliberately discloses any technical or confidential information of the employer thereby causing damage to the employer; or
(5) an employee is, without good cause, absent from work for three consecutive days, or for a total of six days in any month.
In addition, an employer may also dismiss an employee without giving advance notice when the employee has been sentenced to temporary imprisonment in a final and conclusive judgment and is not granted a suspended sentence or permitted to commute the sentence to payment of a fine. Here, the employer will not be required to dismiss the employee within 30 days of discovering this violation.
Regarding The Change of Business Nature Requirement
When an employer dismisses an employee in the absence of good cause, the termination shall be null and void. In such a situation, the employee may file a lawsuit against the employer to restore the employment relationship. If successful, the employer will be ordered to pay the regular payments or wages to the employee whom the employer rejected the labour and performance of during the litigation period. Recently, some employers in Taiwan attempted to argue that internal reorganization satisfies the change of business nature requirement. However, when an employer merely combines internal departments, continues to market the same products, and the staff in charge of selling the products are still providing the same services, the change of business nature requirement will not be satisfied. Therefore, in a well known leading case in Taiwan, the court held that Taita Chemical Company ("Taita"), a listed company in Taiwan, shall be responsible for its illegal termination of employment relationship where it transferred an employee from a senior officer position to a title called "counsel", and then dismissed the employee several months later. Taita's reason was that it combined internal departments with aims to facilitate internal communication and enhance market competitiveness. The court refused to take Taita's reason. The court pointed out that the change of business nature requirement could not be satisfied, granting the employee's claims both on restoring the employment relationship and the compensation. See 109 Taiwan High Court Chong Lao Shang (重勞上) No. 20 (2020).
Regarding The Unsatisfactory Performance Requirement
Moreover, it is not easy for an employer to claim an employee is clearly unable to satisfactorily perform the duties required for his or her position. However, an employer can continue to record the performance of an employee at issue for a certain period of time to satisfy the good cause requirement. Generally, an employer will not dismiss an employee until it has, with the assistance of lawyers, collected sufficient and convincing evidence to justify dismissal with good cause.
If you want to know whether your employment relationship can be legally terminated, you shall consult a lawyer. Brain Trust International Law Firm definitely can help you clarify your legal status.
AUTHOR: Hung Ou Yang
Managing Partner
Taipei
+886-2-2707-9976
[email protected]
AUTHOR: Shih-Cheng Yen
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Taipei
+886-2-2707-9976
[email protected]
Copyright Brain Trust International Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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