Labor: Legislature Amends Labor Standards Act.

[2015/12/15]

On 27 November 2015 the Legislative Yuan enacted amendments to the Labor Standards Act (LSA). The main points of the amendments are as follows:
I. Regulation of post-severance noncompetition clauses
  1. An employer may enter into a post-severance noncompetition agreement with a worker only if the following conditions are met:
    (1) The employer has legitimate business interests that are entitled to protection.
    (2) The duties undertaken or position held by the worker enable the worker to access or use the employer’s trade secrets.
    (3) The duration, geographical extent, occupational scope, and types of potential employer limited by the agreement may not exceed reasonable limits.
    (4) The employer must provide reasonable compensation for the losses suffered by the worker by not engaging in competing activities. Such reasonable compensation does not include any payments received by the worker during the period of employment.
  2. The amended Act expressly provides that any post-severance noncompetition agreement that does not comply with the above conditions shall be invalid.
  3. The period of application of a post-severance noncompetition agreement shall not exceed two years. Any agreement that provides for a longer duration shall be reduced to two years.

II. Five principles governing reassignments
Based on opinions from judicial and administrative practice, the amended Act expressly provides that if a worker is reassigned to new duties or to a different work location at the employer’s initiative, the following principles must be complied with:
  1. The reassignment must be necessary for the enterprise’s business operations, and must not be made for improper motives or purposes.
  2. There must be no disadvantageous change in the worker’s wages or other conditions of employment.
  3. The worker’s physical capabilities and skills must be sufficient for them to successfully undertake the work to which they are reassigned.
  4. If the distance to the location to which the worker is reassigned is excessively far, the employer must provide necessary assistance.
  5. The employer must consider the interests of the worker’s and their family’s daily lives.

III. Minimum length of service agreements
  1. Where an employer enters into a minimum length of service agreement with a worker, the new Act expressly requires the employer to arrange specialized skills training for the worker and to provide the cost of such training, or to give reasonable compensation for the minimum length of service agreement. Otherwise the agreement shall be invalid.
  2. In addition, the terms of such an agreement must not exceed a reasonable scope, and must take into consideration the duration and cost of the training to be given by the employer, the possibility of human resource substitution, and the amount and scope of the compensation provided to the worker.

IV. Protection of minors
The amended Act also expressly provides that child workers and persons between the ages of 16 and 18 may not undertake dangerous or harmful work. In addition to the existing requirement with respect to child workers, for workers aged 16 to 18 the employer must keep on file the written consent of the legal guardian, and documentary proof of the worker’s age.