employees are entitiled to be paid for work done in full, and employers cannot withhold pay.
if there are penalty clauses in the contract, they cannot be deducted from the final pay check (only money that has been lent to the employee can be deducted). However, the employer can sue to try and get the penalty money back (at a later date) and employers often use the contract as evidence of prior agreemement. The lawyers then get paid to squabble about which clauses are fair and how much everyone has to pay up. In reality this rarely happens because it’s an expensive process. [/quote]
The law on the matter is ambiguous in my opinion, but what the lawyer told you could certainly be correct, but then a lawyer on behalf of the school would also have a very valid argument to the contrary in my opinion.
The law protects the rights of employers to include penalties for breach of contract. The law also states that employers cannot make ‘advance’ deductions from employees wages to prevent breach. What is not clear is what the word ‘advance’ means in this context.
Does it mean:
a) in advance of breach (i.e. bonds and deposits levied even before a breach has occured), or
b) in advance of payment to the employee.
Although a costly court battle could probably get to the bottom of this and set a precedent on the matter, I think that the answer for our purposes lies in the initial reason for inclusion of that clause in the law.
We all know that bonds and deposits are illegal and that foreign blue collar workers are particularly vulnerable to unscrupulous agents and employees in this regard. It is my belief that this vulnerability is the reason for this clause in the law in the first place.
I believe that your lawyer is taking the other opinion that the law intends to prevent any form of advance deduction from an employees wages. However if his point of view was correct, then surely it could be argued that tax, health insurance and retirement salary deductions, as well as the routine staff travel and ‘weiya’ deductions of local staff are also illegal. There are any number of pre-payment deductions that employers and employees agree upon in an employment contract or verbally, and if as your lawyer suggests, all pre-payment deductions are illegal, then that would make these illegal also. I concede that it is a valid argument, but as I have stated above I don’t believe that it fits with the intent of the law.
So rather than argue the intricacies of the legislation endlessly I really think that the best advice to give foreigners in Taiwan is that if you sign a contract with a breach penalty stated in the contract then you should accept that if you breach then you will have to pay that penalty – regardless of whether the employer takes it out before paying you, or whether you are required to hand it back after receiving it. We are all adults and we are all clear on exactly what the breach agreement means so let’s not try and weasel our way out of it or we may find that our employers also feel justified in trying to weasel their way out of things also.