New Era of Taiwan Labor Dispute Cases

Taiwan is considered to have relatively better protection for employees than for employers in terms of legal and practical framework. Taiwan’s Labor Standards Law has been amended 16 times in the past 10 years, and the amendments provide greater protection for employees. While the Code of Civil Procedure governs disputes and civil court proceedings, the Labor Incidents Act, which only applies to cases of labor disputes, came into force on January 1, 2020, opening a new era for labor dispute cases in Taiwan.

Mediation is commonly used in Taiwan, where a judge sits as an executive member of the mediation committee to ensure reliable and efficient procedures for the parties involved. Under the supervision of the judge, certain evidence must be disclosed, so even if the mediation fails, the same judge will take over and continue the case until the trial. Therefore, early conclusions could be expected for disputes after mediation fails.

Samrong Hwang
Senior partner
Formosa Transnational in Taipei
Email: [email protected] com

In litigation proceedings, the legislative design places the burden of proof of wages and working hours on the employee, which could have a significant impact on the management of the employer’s work. The Labor Incidents Act establishes a special interim remedy dedicated to labor dispute cases, which necessitates lower costs for labor dispute cases compared to general cases, in the event the judge recognized that ” there is a chance of winning the case, and it is not difficult for the employer to continue to employ the worker” in the context of an action for confirmation of the existence of an employment relationship, the action special provisional will be ordered. The burden on both parties in a special interim appeal is less than that of a general interim appeal, and improves the chances of success in the case of a special interim appeal.

The article below covers mediation procedures under the Workplace Incidents Act.

MEDIATION OF LABOR DISPUTES

Since employees are economically more vulnerable in a labor dispute, the matter must be resolved quickly and appropriately due to the impact on the employees’ household. By actively involving experts with specialized knowledge and experience in labor incidents, and fact-finding, disclosure and adjudication of legal effects will be carried out during mediation, allowing both parties to understand the possibility of litigation. . Accordingly, an Alternative Dispute Resolution (ADR) framework has been established to introduce a mediation agreement at an early stage by ensuring that both parties understand in advance the possibility of winning or losing.

Under article 16 of the law, labor cases must be submitted to mediation before litigation, for which the principle of prior mediation is adopted, except in certain circumstances. It is said that this labor mediation system was based on the Japanese Labor Court Law. However, Taiwan’s mediation system has its own characteristics based on local circumstances, customs and related laws. These distinguishing features are:

Strengthening the participation of experts. Unlike the conventional approach, the Taiwan framework has a labor court judge as a member of the mediation committee and two other members from the employee and employer groups. The court carefully appoints these members after assessing their professional training and experience, as well as the appropriate composition of the committee (Articles 20 and 21 of the law). The members of the mediation committee will discuss the issues intensively to understand the nature of the dispute and the characteristics of the parties involved in order to obtain a satisfactory mediation.

Albert Kao, New Era of Taiwan Labor Dispute Cases
Albert Kao
Partner
Formosa Transnational in Taipei
Email: [email protected]

Quick conclusion of the mediation procedure. In principle, the judge sets the date for the first mediation within 30 days of the filing of the request (article 23). Although it sounds easy, finding an agreed time for the judge, other committee members, the plaintiff and the defendant could be difficult. While written notification is common in conventional litigation proceedings, the court flexibly schedules parties by telephone or other means of mediation.

The mediation procedure is completed in three three-month sessions. An effective realization in such a short time requires the cooperation of both parties, in addition to the directives of the judge and the experience of the members of the mediation committee.

The law aims for a quick conclusion to fix the issues and examine the evidence as soon as possible. It establishes the principle that each party’s submission must be completed before the end of the second mediation session (article 24). When reviewing the evidence, the Mediation Committee will disclose the possible outcome of the dispute in a timely manner so that it can recommend an agreement to mediate based on certain factual findings and legal opinions.

Several methods of concluding mediation. The ideal is to conclude a mediation by an agreement, but if the parties cannot agree, several modalities are granted to the mediation committee. With the agreement of both parties, the mediation committee drafts the terms of the mediation (article 27). This cannot be done without a considerable level of trust.

Suppose the parties fail to reach an agreement. In this case, the committee will prepare on its own initiative a suggested mediation path by taking all things into consideration and presenting a proposal (the eventual appropriate plan) based on the premise of balancing the interests of both parties. If the parties do not file an objection within 10 days of submission, the mediation is deemed successful (Article 28).

DISTRICT COURT LABOR MEDIATION DATA

Year Number of
business done
(A)
Success
mediations
(B)
Unsuccessful
mediations
(VS)
(B/B+C)×100%) (B/A×100%)
2017 2,237 527 1,159 31.26% 23.56%
2018 2,116 514 1,258 29.01% 24.29%
2019 2005 537 1,160 31.64% 26.78%
2020 2,595 999 913 52.25% 38.50%
2021 3,337 1,171 1,236 48.65% 36.29%

Source: Taiwan Judicial Yuan Statistics

POSITIVE IMPACTS

With the above two types of conclusion methods, about 40 cases were settled in the first year after law enforcement, and in the second year, the number doubled to 78 cases. By comparing the figures before and after the application of the law, the positive result obtained by reliable and effective mediation procedures is evident.

Firstly, regarding the number of cases concluded (A) and successful mediations (B), the number of cases concluded has increased significantly since the entry into force of the law in 2020 and constitutes a turning point. The number of successful mediations has also more than doubled since then.

Pang-Heng Hung, New Era of Taiwan Labor Dispute Cases
Pang-Heng Hung
Partner
Formosa Transnational in Taipei
Email: [email protected]

The rate of successful mediations, compared to unsuccessful mediations, has improved from the previous 30% in 2017 to around 50% in 2020 and 2021, and the ratio of mediations ending successfully has a favorable outcome, with the ratio increasing from around 25% to more than 35% over the same period.

Analyzing these figures, one could say that if the legal framework determines the number of labor mediations, the number of concluded cases inevitably increases. The court has seen a dramatic increase in the number of successful mediations by conducting labor court proceedings, appointing judges and actively participating in mediation proceedings without increasing the number of its employees. The improvement in the success rate to around 50% means that the mediations carried out by the mediation committee enjoy a high degree of confidence.

Following the application of the Labor Incidents Act, disputes have been resolved more efficiently than before, which shows that reliable solutions can be expected with the involvement of experts and judges. From the perspective of corporate legal affairs, cases of labor disputes can be avoided, and the structure of an appropriate internal framework that complies with Taiwan’s labor standards law has become equally important.

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