TAIWAN Law and Practice Contributed by: Chengkai Wang, Yachi Huang, Herman Lin and Tzutien Huang, Dentons Taiwan (Dacheng Taiwan)
• no severance pay – the employee is not entitled to severance payment when dismissed for serious cause as defined in Article 12; and • legal protection – employers must be cautious and ensure the dismissal is justifiable under the stipu - lated conditions to avoid legal challenges or claims of unfair dismissal from the employee. 7.4 Termination Agreements Permissibility and General Practices Termination agreements are permissible in Taiwan. While Taiwanese law does not mandate specific terms to be included in termination agreements, it is com - monly recommended to specify the amount of sev - erance payment and to establish the agreement as a final settlement. This means that, post-agreement, neither the employer nor the employee can make any further civil or criminal legal claims against each other. Procedures and Formalities Employers are required to notify local competent authorities and public employment service institu - tions ten days before the employee’s last working day. This notification should include details such as the dismissed employee’s name, gender, age, address, phone number and job position, the reason for layoff and the necessity for employment counselling ser - vices. Statutory Requirements for Enforceable Releases According to Article 71 of the Civil Code, employ - ees generally cannot waive statutory and contractual rights to potential employment claims in advance. This provision ensures that legal acts contravening manda - tory or prohibitive statutes are void. Specifically, any pre-emptive relinquishment of rights to severance payments and pensions before these rights accrue is considered invalid. Post-termination agreements where an employee consents to waive their rights to severance pay and pensions may hold validity provided these claims have already materialised. This acknowledges that such rights, once accrued, become independent rights that could theoretically be waived. Such waivers, agreed upon after employment has expired or been terminat - ed, reflect the principle of private autonomy, allowing
agreements on severance and pensions even if they result in lower compensation than legally prescribed. Judicial Scrutiny and Fairness The validity of these post-termination waivers, espe - cially in cases where employees forgo their claims entirely, may still be subject to judicial scrutiny. Courts often examine whether such agreements were made under duress or deception to safeguard the interests of employees. Therefore, while post-termination waiv - ers are theoretically permissible, they must not exploit the employee’s position, ensuring that any considera - tion given (economic or otherwise) is fair and freely agreed upon without coercion or fraud. In summary, while termination agreements are allowed in Taiwan, they must be carefully crafted to ensure they do not contravene statutory protections, particu - larly regarding severance and pension rights. 7.5 Protected Categories of Employee Specific Protections Against Dismissal In Taiwan, the law provides specific protections against the dismissal of employees who belong to cer - tain vulnerable categories or who are involved in par - ticular activities. It is unlawful to dismiss an employee for reasons such as: • pregnancy and maternity – employees are protect - ed from dismissal due to pregnancy, during mater - nity leave and post-childbirth; • occupational accidents – employees who suffer work-related injuries or illnesses are safeguarded from being dismissed while they are recuperating; • participation in labour-management dispute resolu - tion – this includes involvement in mediation, arbi - tration or any decisions arising from such disputes; • union membership and activities – employees can - not be dismissed for joining a labour union, par - ticipating in union activities or engaging in lawful union-organised events; • legal actions or complaints – protection is extend - ed to employees who take lawful legal actions or lodge complaints against their employers; and • whistle-blowing – employees who report or expose any illegal activities within the organisation are pro - tected from retaliation, including dismissal.
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