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Labor Standard Act and Employment contracts in Taiwan
The Taiwan Labor Standards Act (LSA) provides strict measures for protecting employees. What should you know before you drafting the employment contracts, so the contract is not against the law and enforceable?
Fixed-term and non-fixed term labor contracts
Employment contracts may be divided into two categories: fixed-term contracts and non-fixed term contracts. A contract in nature for temporary, short-term, seasonal or specific work may be made as a fixed-term contract, but a contract for continuous work should be a non-fixed term contract. If a company violates the abovementioned regulation, the fixed-term contract signed with employees shall be a non-fixed term contract. Fixed-term employment contracts shall have the following denotations: temporary work and short-term work shall not exceed six months; seasonal work shall not exceed nine months; of specific work is to exceed one year, it should be reported to the competent authority for approval and record.
A fix-term contract worker shall not claim from the employer either additional wages for the advance notice period or severance pay.-Labor Standard Act Article 18
However, in any one of the following situations, a fixed-term contract shall be deemed as to be a non-fixed term upon the expiration of the contract:
1. Where an employer raises no immediate objection when a worker continues his/her work.
2. Where, despite the execution of a new contract, the prior contract and the new one together cover a period of more than ninety days and the period of time between the expiration of the prior contract and execution of the new one does not exceed thirty days. - Labor Standard Act Article 9
The Labor Standard Act does define the maximum period of probation. The term “trial period” is not a statutory term defined in the LSA. The length of the trial period is open to the negotiations between employers and employees. Although the longest trial period is not regulated, the normal practices are often three months. During the trial period, employment terms, conditions, and benefits are not required as the same as the regular hired employee, but the terms are still must meet the LSA requirements.
A worker shall be granted annual paid leaves on an annual basis based on the following conditions:
1. 3 days for service of 0.5 ~ 1 year.
2. 7 days for service of 1 ~ 2 years.
3. 10 days for service of 2~3 years.
4. 14 days for service of 3~5 years.
5. 15 days for service of 5~10 years.
6. One additional day for each year of service over 10 years up to a maximum of 30y days.
Employees are entitled to give an advanced notification to the employer when terminating the employment contract as follows:
1. 10 days notice in advance where an employee has worked continuously for 3 ~12 months.
2. 20 days notice in advance where an employee has worked continuously for 1 ~3 years.
3. 30 days notice in advance where an employee has worked continuously for more than 3 years.
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