It’s not actually an illegal clause, but they may either misunderstand how labor law works or try to mislead you about it (or both).
Assuming your job is subject to the Labor Standards Act, there are basically four ways to terminate:
- employer terminates with advance notice (Art. 11)
- employer terminates without advance notice (Art. 12)
- worker terminates without advance notice (Art. 14)
- worker terminates with advance notice (Art. 15)
Art. 11 requires a condition like the employer being in financial trouble or the worker being incompetent etc. You get severance pay, and if they don’t give advance notice then they still have to give wages for the notice period (Art. 16).
Art. 12 requires the worker to be doing something wrong, like insulting people or violating the contract.
Art. 14 requires the employer to be doing something wrong, like insulting the worker or breaking the contract. You get severance pay.
Art. 15 requires the employer’s consent, which in this case it’s giving in advance through the contract. (Otherwise, it needs to be either a non-fixed term contract or a job the worker has already had for three years.)
A breach penalty of one month’s salary should be enforceable. It’s true that they can’t deduct it in advance (Art. 26) and therefore need to chase you for it.
The most likely problem is that they’ll say the only way to terminate the contract is how the contract says it can be terminated, which is not true. If the contract explicitly forbids the other termination methods listed in the LSA, that’s illegal. If the contract simply is silent on an issue covered by law, the law automatically fills in the blank.
Not all jobs are subject to the LSA, so ask the local labor department or the Ministry of Labor (not CLA) if you have any doubt. Buxiban teachers are definitely covered.
All jobs (as long as they’re 僱傭 i.e. employment not contracting) are subject to Art. 482 to 489 of the Civil Code, in which case (in addition to the LSA if applicable) either party may terminate the contract in the event of a “serious occurrence” (重大事由), and if the serious occurrence is caused by either party’s negligence, that party is financially responsible for it.
It’s still a good idea to ask the labor people about the whole contract, since they usually know what they’re talking about. 