Taiwan Legal Update: Amendments to Labour Standards and Labour Pensions Acts & MOHW Responds to Demonstrations

Taiwan Legal Update: Amendments to Labour Standards and Labour Pensions Acts & MOHW Responds to Demonstrations

Labour Standards Act and Labour Pension Act Amended to Safeguard the Right of Employees

On April 26, the legislature passed the amendments to Labor Standards Act as well as the amendment to Labor Pension Act on third reading. According to the Ministry of Labor (MOL), the amendment will not only guarantee the stability of the work of dispatched labor and ensure their right to obtain wages, but protect Taiwanese workers’ livelihood after retirement and strengthen the relations between workers and management by the means of expanding the scope of application and tax incentives, increasing penalty and disclosing the name of illegal employers.

The Ministry of Labour stated that the Labour Standards Act amendments contain several provisions on the essential rights and interests of the dispatched workers for the first time, which set milestone of paramount importance for the government’s goal of safeguarding the right of dispatched labours by preventing the business owners from treating them as “disposable tableware.” The MOL emphasized that protecting the right of dispatched labours is a major policy of the government authority. The work and the wage for dispatched workers could be effectively secure and stabilize as the relevant regulations are included in the Act for the first time. “This will not encourage the business to hire more dispatched worker and crowd out full-time employee”, stressed the ministry, which plans to implement administrative guidance and various measures to further secure the benefits of dispatched labours.

In the meanwhile, in order to protect the rights and benefits of workers’ pensions, the parliament had enacted Labour Pension Act on July 2005, which required the management to pay at least 6% of the employee’s monthly wages as pensions. On the other hand, to encourage workers to prepare for retirement as early as possible, workers can also voluntarily pay pensions within 6% of their monthly salary and enjoy tax benefits. Until February 2019, more than 6.79 million workers have taken part in the new pension insurance. The newest amendments to the Labour Pension Act intend to secure for the economic life of the workers after their retirement and has a positive impact on society. The focus of the amendments include:

  1. Expanding the scope of applicable objects.

The foreigners who have obtained permanent residence will be included in the application of this Regulation to guarantee the retirement life in Taiwan.

  1. Widening the applicable scope of pension tax benefits.

Self-employed operators, employers concurrently engaged in labouring services and appointed personnel who voluntarily pay the pensions in the execution of their business, can also enjoy tax incentives that encourage them to pay and accumulate retirement income early.

  1. Authorizing the labours to open the designated account.

Labours, who apply to the lump sum payout provided by the act, may present the proof of documentation the insured has issued to open a designated account at a financial institution exclusively for depositing the annuity payout. The deposit held in this designated account may not be used as the instrument for offsetting, seizure, or as a guarantee or court seizure.

  1. Lengthening the statute of limitations for a personal pension claim.

The statute of limitations for the survivor or designated claimant’s pension claim extended from 5 years to 10 years after the death of labour.

  1.  Strengthening the protection of labour claims.

(1) Those who violate the provisions of the Regulation and fined for administrative fine or delinquency charges, the authority will reveal the name of the employer, the owner or the trustee, the name of the person in charge, the date of the administrative injunction, the provisions which was violated and the amount of the administrative injunction.

(2) When a company fails to pay a pension or delinquency charges in accordance with the Labour Pension Act, and its property is insufficient to pay off, its representative or responsible person shall be liable for liquidation.

(3) Pensions and delinquency charges have the priority right for a claim.

(4) Labour pensions are not subject to the discharge in reorganization under Company Act, the liquidation of the consumer debt under Statute for Consumer Debt Clearances, and the bankruptcy under Bankruptcy Act.

  1.  Increasing penalties.

Based on Article 78 of the Labour Standards Act, employers failing to give severance pay or pensions in accordance with the criteria or timelines set forth in Labour Pension Act and Labour Standards Act shall be subject to fines between NTD$300,000 and NTD$1,500,000.

  1. Cooperating with the Executive Yuan to reorganize the government institution.

The MOL will be in charged with the supervision of the labour pension fund in the future, while the Bureau of Labour Funds under the Ministry of Labour is responsible for the operation and the management of the fund.


MOHW Responses to Medical Workers Demonstrations

In reply to the protest march held by several labour unions consisted with medical workers this week, the Ministry of Health and Welfare(MOHW) said that it has undergone a number of amendments and administrative measures to improve the medical practice environment and protect the labour rights of medical personnel in recent year, which are:

  1. Strictly prohibiting medical violence.

On May 10, 2017, the amendments to Article 24 and 106 of the Medical Care Act are amended to aggravate the criminal responsibility for medical violence, stipulating that no person may obstruct medical treatment by violence, coercion, intimidation, blatant insult or other illegal methods. Those on-going acts or situations shall be prevented or eliminated by the police; if criminal responsibility is involved, it shall be transferred to the judicial organ for investigation. Besides, the ministry also strives for promoting anti-hospital violence measures, implement medical violence notifications, and cooperate with the prosecutor’s investigation.

  1. Promoting the reform of medical disputes to reduce medical litigation cases.

On January 24, 2018, Article 82 of the Medical Care Act are amended to clarify that medical personnel who cause damage or even death to patients because of performing medical services, the criminal liability shall be determined by the violation of the necessary duty of care and beyond the reasonable clinical professional discretion. Additionally, the ministry has the inclination to promote the Medical Accident Prevention and Dispute Resolution Act (draft) with the three major principles, which are “immediate care after the medical accident”, ” obligation to conduct mediation first for medical disputes”, “notification of disclaimer”. The bill was reviewed on an article-by-article basis by the Legislative Council of the Legislative Yuan on May 24, 2018. The second and third reading procedures are estimated to be completed soon after the consultation of the political party in Congress.

  1. Systemizing the right of employed physicians.

According to MOL, resident doctors will be subject to the Labor Standard Act in September this year. On the other hand, the MOHW has drafted amendments to Medical Care Act which augment a chapter that contains the provisions on the protection of labour rights and interests of physicians, and include work contracts, annual expenditures, occupational disaster compensation, pensions, and medical business risk protection into the bill. It is under review by the Executive Yuan and is expected to be sent to the Legislative Yuan for consideration.

  1. Putting nurse-to-patient ratios in law.

On February 1, 2019, the Article 12-1 of Standards for Medical Institutions were augmented to regulate nurse-to-patient ratios. The law stipulated the nurse-to-patient ratios shall be 1 to 9 in a medical centre; 1 to 12 in a district hospital, 1 to 15 in a regional hospital. The regulation will be officially taken into effect on May 1, 2019.


The Department of Medical Affairs under the MOHW claimed that relevant measures such as hospital evaluation and supervision by the department of health under local government will be implemented to ensure the enforcement of the protection of medical personnel’s rights and interests.


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