Employment contract advise needed!

[yyy]

There are some threads about non-competition clauses, but I think at some point a sticky would be a good idea…

forumosa.com/taiwan/viewtopi … 70&t=77081
forumosa.com/taiwan/viewtopi … 0&t=140637
forumosa.com/taiwan/viewtopi … 70&t=87713

The Ministry of Labor has a handbook about this topic. It’s difficult to find on their website (you can easily find a page that mentions it, but the actual PDF is hidden away in a deep, dark corner), but somewhere on the web you should be able to find “簽訂競業禁止參考手冊”. It explains that unfair contract clauses are invalid on account of the Civil Code.

Civil Code, Article 247-1:

[quote]If a contract has been constituted according to the provisions which were prepared by one of the parties for contracts of the same kind, the agreements which include the following agreements and are obviously unfair under that circumstance are void.
(1) To release or to reduce the responsibility of the party who prepared the entries of the contract.
(2) To increase the responsibility of the other party.
b To make the other party waive his right or to restrict the exercise of his right.[/b]
(4) Other matters gravely disadvantageous to the other party.[/quote]
You can also refer to Article 17:

[quote]No one shall be permitted to waive his liberty.
Any limitation to liberty shall not be against public policy or morals.
[/quote]

Although the conditions making a non-competition clause fair or unfair are not formally codified in law, the Ministry’s predecessor the Council of Labor Affairs released a list of fairness criteria in 2000, and in practice the courts follow this list. (If anyone has an example of a court not following it, please share.)

A good summary in English is available at winklerpartners.com/?p=995

My favorite is #4:

The employee must receive consideration for his loss caused by agreeing to the non-compete clause. This should be in the form of a higher salary, stock option, or other forms of compensation specifically tied to the non-compete clause. It would be obviously unfair to require the employee to restrict his right to work without receiving something in exchange.

Someone in one of the above threads said the compensation doesn’t actually have to be declared (in advance) to be part of the non-competition agreement. I think it would have to be extraordinary compensation for that kind of argument to work; the handbook gives a specific example of bonuses not being accepted as sufficient compensation.

I don’t know if accepting a pen would qualify as bribery, but I doubt the company could get $1m out of you for that, assuming it’s not a diamond-studded pen with a built-in death ray… :no-no:

Bear in mind that firing an employee for breach of contract is only legal if it’s a “serious” violation (Labor Standards Act, Article 12) or if the employee is “clearly not able to perform satisfactorily the duties required of the position held” (Article 11).

[quote]No employer shall, even by advance notice to a worker, terminate a labor contract unless one of the following situation arises:

1. Where the employers’ businesses are suspended, or has been transferred.
2. Where the employers’ businesses suffers an operating losses, or business contractions.
3. Where force majeure necessitates the suspension of business for more than one month.
4. Where the change of the nature of business necessitates the reduction of workforce and the terminated employees can not be reassigned to other suitable positions.
   5. A particular worker is clearly not able to perform satisfactorily the duties required of the position held.
   
   In any of the following situations, an employer may terminate a labor contract without advance notice:
5. Where a worker misrepresents any fact at the time of signing of a labor contract in a manner which might mislead his/ her employer and thus caused him/her to sustain damage therefrom.
6. Where a worker commits a violent act against or grossly insults the employer, his /her family member or agent of the employer, or a fellow worker.
7. Where a worker has been sentenced to temporary imprisonment in a final and conclusive judgment, and is not granted a suspended sentence or permitted to commute the sentence to payment of a fine.
   4. Where a worker is in serious breach of the labor contract or in serious violation of work rules.
   5. Where a worker deliberately damages or abuses any machinery, tool, raw materials, product or other property of the employer or deliberately discloses any technical or confidential information of the employer thereby causing damage to the employer.
8. Where a worker is, without good cause, absent from work for three consecutive days, or for a total six days in any month.
   Where an employer desires to terminate a labor contract pursuant to Subparagraphs 1 and 2, Subparagraphs 4 to 6 of the preceding paragraph, he/she shall do so within thirty days from the date he/she becomes aware of the particular situation.[/quote]