Taiwan Legislative Yuan greenlights Labor Standards Act amendments

In November 2015, the Legislative Yuan approved the amendments to the Taiwan Labor Standards Act in regard to non-competition agreement, relocation of employees, restriction to minimum service period of employment, and child labor to fully protect and improve the well-being of Taiwan’s working population. 

The amendments add a new Article 9-1 into the Act to set forth the legal requirements for post-employment non-competition agreement between the employer and the employee as summarized below. 

1.  The employer must have justifiable business interest to be protected by the agreement;
2.  The employee must be in a position to have access to or use the employer’s trade secrets sought to be protected;
3.  The period, area, and types of jobs as well as the potential future employers precluded by the non-competition agreement should not exceed the reasonable scope;
4.  The employer shall make reasonable compensation for the loss caused by agreeing to the non-competition clause, which compensation should be that in addition to the wages received during the employee’s course of employment. 

Any non-competition agreement in violation of the above requirements shall be considered void and unenforceable.  In addition, the period of the non-competition agreement shall not exceed two years, and any term longer than two years shall be shortened as two years.  (November 2015)
/CCS