Under Articles 24 and 32 of the Labor Standards Law (hereinafter, the "Law"), an employer shall pay overtime compensation based on the number of overtime hours of employees. For the convenience of management, many employers require their employees to apply for overtime work in advance pursuant to required corporate procedures to serve as the basis for overtime hour calculation and overtime compensation. Even so, the calculation and determination of overtime hours are still controversial in practice. Is this type of overtime application system legal? In addition, how will this system affect employers and employees? Since this system has major impact on both employees' wage interest and employers' personnel expenditures, it is necessary to explore various aspects of this system.
According to the facts underlying this Decision, Company A, which developed a1 and a2 computer programs, asserted that the computer program which is part of the b1 computer program produced by Company B that generates the screen shot on a computer screen is entirely reproduced from the user interface and code used by the Company A's a1 and a2 computer programs and infringes the Company A's copyright to all the works at issue. The Company A also claimed damages from the Company B.
- The legality of an overtime application system adopted by employers is recognized in practice.
Courts generally hold that according to the gist of Articles 24 and 32 of the Law, overtime work requires the consent of both the employees and the employers. If workers unilaterally extend their work hours without the permission of the employers, overtime compensation should not be claimed. (The 98-Lao-Zai-Yi-5 Civil Decision of the Taiwan High Court, the 97-Lao-Shang-Yi-68 Civil Decision of the Taiwan High Court and the 101-Lao-Shang-Yi-35 Civil Decision of the Taiwan High Court Kaohsiung Branch Court hold the same opinion) An employer may adopt an overtime application system to address management needs. The 100-Lao-Shang-Yi-172 Civil Decision of the Taiwan High Court serves as a good reference.
"Except for work of special characteristics, the services provided by employees should be provided during regular work hours under general circumstances. Therefore, if employees need additional work hours to complete work which cannot be completed during regular work hours, it is certainly necessary to agree with the employers separately to have the employees work overtime and to have the employers pay the overtime. Otherwise, if employees are allowed to go overtime on their own without the permission of the employers regardless of the work efficiency or productivity of the employees during regular work hours, this would not only contradict the gist of the employment contract under the Civil Code but also violate the above provisions of the Law. Therefore, an employer's requirement out of management need that employees who need to extend their work hours should apply for permission before granting the permission is not incompatible with law. If workers stay overtime in the company while their employer does not need them to work beyond regular business hours or fail to apply for overtime work pursuant to the procedures required by the employer, the workers cannot claim overtime compensation from their employer since the employer cannot control if the workers do need to go overtime due to a need to perform their job duties.
- Under an overtime application system, the employees are required to assume the main burden of proof for the fact of overtime work.
According to current practical opinions, if an employer adopts an overtime application system, the employer can basically refuse to pay overtime if the employees fail to apply for overtime work pursuant to applicable requirements. However, if the employees can substantiate that the overtime work was permitted or requested by the employer and that their job duties were performed during the overtime period, the employees can still claim overtime compensation from the employer. Based on the above-mentioned opinions, an employer is only required to substantiate that the employees failed to apply for overtime work as required, and the main burden of proof will be assumed by the employees.
In actual cases (See the 100-Lao-Shang-Yi-172 Civil Decision and the 97-Lao-Shang-Yi-68 Civil Decision of the Taiwan High Court), the court is quite strict in assessing evidence submitted by workers to substantiate their overtime work. If workers only submit clock in records as evidence, most courts would believe that this only proves that the employees stayed overtime in the company and is not sufficient to prove that they stayed overtime in the company to handle work relating to their job duties or did so at the request of their employer. Such opinion makes it more difficult for employees to substantiate their overtime work. In the 98-Bei-Lao-Jian-44 Decision of the Taipei district Court, different results can be found in the decision on the overtime compensation claims of two plaintiffs based on the criterion of whether there is any evidence to substantiate the overtime work had received prior approval of the employers. This decision serves as valuable reference and is abstracted below:
With respect to Plaintiff C's overtime compensation claim, it was held in the Decision that Plaintiff C not only failed to apply for overtime work pursuant to his company's requirements and the punch card records can only prove that he was still at the company to conduct overtime work beyond office hours but cannot prove that he had obtained the Defendant's approval or had been requested by the Defendant to work overtime. As for a co-worker's statement that he had heard from other co-workers that the President requested that shifts should not be arranged around the clock, this is merely hearsay and cannot directly prove that Plaintiff C's overtime work was requested by the Defendant in advance. In addition, the shift arrangement table produced by Plaintiff C is merely a computer printout without the signature of his supervisor and cannot prove that Plaintiff C's overtime was requested and approved by the defendant. Therefore, Plaintiff C's claim was rejected.
With respect to Plaintiff B's overtime compensation claim, although Plaintiff B did not apply for overtime work as required, still it was found in such decision that the shift arrangement table which was produced as evidence was created on the Defendant's computer based on the arrangement of his supervisor, i.e., Plaintiff C, according to such shift arrangement table, punch card records and the testimonies of witnesses and Plaintiff C, showing that Plaintiff B's overtime work was requested by Plaintiff C in advance. Since Plaintiff B's overtime work was requested by the Defendant and was approved in advance, Plaintiff B's claim was upheld.
Although current practical opinions are more favorable to employers, they should still heed the opinions in the 101-Lao-Shang-Yi-18 Civil Decision of the Taiwan High Court, which held that although an employer has an overtime application system in place, if the employer does not use it as a method and standard in determining overtime work, the employer shall not refuse to pay overtime on the ground that the employees fail to apply for overtime work pursuant to applicable requirements. To wit, although an employer may adopt an overtime application system, still when the system is implemented, it is necessary to ensure that all employees are clearly aware of such system for the sake of compliance and to thoroughly implement the system as a determination standard for overtime work to avoid future disputes.