In brief

 

  • In June 2010 the Taiwanese Legislative Yuan passed significant amendments to the Labour Union Act, giving teachers the right to form and join unions and allowing foreign workers to participate in union activities.
  • While unions will still be subject to government oversight and intervention, the passing of these amendments marks the completion of significant industrial relations reform in Taiwan, aimed at promoting worker rights in unionised and collective bargaining. However, the protections will not apply to Taiwan’s increasing number of temporary dispatched workers. The reforms are expected to take effect in May 2011.
  • It is likely that the amendments will cause a significant increase in union membership levels in Taiwan.  

Background

Three key statutes regulate industrial relations matters in Taiwan, the Labour Union Act, the Settlement of Labour Disputes Act and the Collective Bargaining Agreement Act. Organised labour union action has not been a major social force in Taiwan in the past. Unions are generally subject to extensive government oversight and intervention.

However, the amendments ratified by the Legislative Yuan in June 2010, and expected to take effect in May 2011, provide new rights for workers in relation to union membership.

The amendments

The key features of the amendments are as follows:

  • The amendments identify three types of unions—corporate unions, industrial unions and craft unions. Under the amendments, employees are legally obligated to join the corporate union at their place of employment, but there are no penalties for not joining the union.
  • The amendments ensure the right of workers, including teachers, to organise and participate in labour unions. Teachers may organise craft or industrial unions, subject to the requirements of Taiwan’s school system. Moreover, the Settlement of Labour Disputes Act will continue to prohibit teachers from going on strike, in order to minimize disruption to students’ education.
  • Soldiers and workers in industries associated with national defence, such as weapon-making, are not able to form unions.
  • Unions have discretion over the rules for the election, dismissal and suspension of union directors and supervisors. In addition, foreign workers are now able to take part in union elections and be elected as union officials. Further, union officials can take time off work to conduct union business.
  • The amendments explicitly prohibit, and provide penalties for employers who engage in, unfair labor practices, such as hindering the organisation or operation of unions and discriminating against union members. Employers are subject to fines if they terminate, lay off, reduce workers’ salaries or impose any other adverse treatment on workers for joining a union or engaging in union activities.
  • The amendments stipulate limits on the union membership fees that can be charged, with reference to a worker’s monthly salary.
  • The amendments do not apply to Taiwan’s increasing number of temporary dispatched workers, ie employees of employment agencies who are contracted out to third parties.

Implications for employers

It is expected that the implementation of the amendments will lead to a significant increase in union membership levels and union activity. It is important that employers are familiar with the detail of the new provisions.

Employers will need to prepare themselves for the provisions coming into effect, including:

1.ensuring that management is aware of the need to avoid treating workers adversely by virtue of workers’ union membership or activities, and 2.putting in place a strategy to deal with the possibility that further to the likely increase in union membership and activity, more unions may seek to engage in collective bargaining at the enterprise level, as provided for under the Collective Bargaining Agreement Act.