TAIWAN: Annual Update – Expected labour law changes in 2016

Working hours

Reduction of regular working hours and number of public holidays: With effect from January 1, 2016 , the maximum regular working hours are reduced from 84 hours in two weeks to 40 hours in one week. In response to the reduction of regular working hours, the number of public holidays is reduced from 19 days to 12 days.
Action required: Employers should update the work hours stated in their templates of employment contracts, overtime policies and the Work Rules.

Non-compete covenants

Restriction to post-employment non-compete agreements: Subject to a Government announcement expected in 2016, any post-employment, non-compete restriction agreement will be void unless these legal requirements are met:
(1) The employer has justifiable business interests to be protected by the agreement;
(2) The employee has had access to or the use of trade secrets of the employer;
(3) The time period, area, scope of occupational activities and potential future employers of the non-compete restrictions shall be reasonable and justifiable; and
(4) The employer shall make reasonable compensation to the employee for the loss arising from their non-competing conduct.
Action required: Employers should carefully evaluate employees’ job positions, the restrictive period, area, scope of occupational activities and potential competitors so as to offer a reasonable compensation to enforce a post-employment non-compete agreement.

Contract changes

Restriction to changes of job position and workplace: Subject to a Government announcement expected in 2016 , any changes to an employee’s job position and/or workplace must be in accordance with their employment contract and must meet certain legal requirements.
Action required: Employers should reserve a right to change the employees’ job positions and/or workplace in their employment contracts and ensure all the changes are compliant with the legal requirements.

Minimum service periods

Restriction to minimum period of service contracts of employment: Subject to a Government announcement expected in 2016, any minimum service period employment contract will be void unless these legal requirement are met:
(1) The employer provides the employee with professional or technical training, and pays for such training; and/or
(2) The employer provides reasonable compensation for the employee to comply with the minimum service period agreed upon by both parties.
These are in addition to the existing rules which require that the employer has a reasonable interest to protect by imposing the minimum service contract and that any penalty for breach by the employee must balance the employer’s interest to be protected with the employee’s ability to pay the penalty.
Action required: Employers should prepare a separate contract for minimum service periods of employment on a case by case basis.