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.

1. 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

2. Agenda:
A. Introduction
B. Different Types of Employment and the HR implications
1. Mandate vs. Employment Agreements
2. Treatment of Overtime
3. Fixed-Term Contracts
4. 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

3. 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.

4. 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 in
which they serve at the pleasure of their board, meaning that formally:
■ They can be removed immediately
■ For or w/o cause
■ No severance owed

5. 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.

6. 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.

7. 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

8. 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

9. 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.

10. C. Updates and Analysis of Major
Employment Laws
Child labor laws
Minimum wage
Criminalization of trade-secret theft and HTC case
Personal data protection issues

11. 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.

12. 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.

13. Q&A Time!
John Eastwood
e: john.eastwood@eigerlaw.com
o: +886 2 2771 0086