International Newsletter

Taiwan’s New Labour Incident Act Places Burden of Proof on Employers in Employment Disputes

May 26, 2020

Taiwan’s new Labour Incident Act (LIA) came into effect on 1 January 2020, representing a major overhaul of how labour disputes are handled. The LIA aims to strengthen protection for employees by simplifying access to the court system, but places additional burden on employers.

Handling Labour Disputes: The Basics

Previously, employees were required to file complaints at their local government labour office. A mediation process would then commence, aimed at resolving the dispute before litigation proceedings took place. If the employee decided to pursue litigation, the burden of much of the proof was on them. Under the LIA, a judge will oversee the mediation process and on transfer to the courts, the case will be considered a continuation of the mediation process, rather than tried as a brand new case. The burden of proof now rests with the employer, which will be expected to provide documented evidence that proves it acted within the law.

The Intended Results: Reduction in Litigation Costs and Timeframes

The hope is that litigation costs and timeframes will be reduced for both parties and that the barrier for employees to bring claims in court will be reduced. The new legislation may also encourage quicker settlement and potentially avoid litigation altogether.

Best Practices

In order to substantiate that employers have acted within the law’s requirements, employers may want to ensure that they keep accurate records of employee work hours (e.g., keep clock-in and clock-out records to the minute), salary and bonus payments, overtime worked, and other information that can serve as evidence should a dispute arise. The onus is on employers to provide this evidence if and when a dispute is brought to the attention of the authorities. Employers may want to make sure that statutory documents are well-kept and prove that their actions are legitimate and reasonable.

It is important that companies maintain up to date work rules, internal policies, and employee handbooks so that employees are aware of any changes and can access these at all times (e.g., on an intranet or bulletin board). This is of particular importance for those companies where such policies (e.g., bonuses and work schedules) are nontraditional in scope or involve complicated calculations, as these types of policies often cause the most contention.

Written by Christine Chen of Winkler Partners and Roger James of Ogletree Deakins

© 2020 Winkler Partners and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.