Asia-Pacific employment law bulletin 2023
In Taiwan, there have been two recent key developments in employment law: the expansion of the labour insurance coverage and the recent decision of the Taipei High Administrative Court with respect to gig workers.
The Labor Occupational Accident Insurance and Protection Act
The Labor Occupational Accident Insurance and Protection Act (Act) was promulgated and took effect on 1 May 2022. The Act is a more complete regulation for occupational accident insurance and expands the scope of coverage of labour insurance.
Previously, only employers with more than five employees were required to enroll employees in the government’s labour insurance. After the Act, all employers, regardless of the number of employees they employ, are required to insure all of their employees aged 15 or above under labour occupational accident insurance. As before, the employer shall pay the insurance premium in full.
If an employer fails to participate in labour occupational accident insurance for its employees, the employer will face a fine of NT 20,000 - 100,000 (approx. USD 650 - 3300) and may be fined for each such violation found. The competent authority will also publish the name of the employer and the name of the representative of such employer as a “name and shame”.
Relationship between a food delivery platform and its delivery drivers
As in many other places, Taiwan has seen the rise of food delivery platforms. Although food delivery platforms typically argue that food delivery drivers are merely independent contractors, the Ministry of Labor (the labour competent authority in Taiwan), has previously taken the view that food delivery drivers should be considered to be employees of the food delivery platform. Recently, the Taipei High Administrative Court affirmed the view of the Ministry of Labor that the contract between a food delivery platform and its delivery drivers can be considered as an employment relationship if it has the following characteristics:
- a personal subordination relationship exists between the food delivery platform and its delivery drivers (i.e., a delivery driver must follow detailed specifications of the food delivery platform and cannot make independent decisions on how they should perform the service);
- an economic subordination relationship exists between the food delivery platform and its delivery drivers (i.e., the food delivery platform unilaterally calculates the revenue and bonus of the delivery driver, and the delivery driver does not need to bear any financial risks);
- an organizational subordination relationship exists between the food delivery platform and its delivery drivers (i.e., when delivering food, the delivery driver solely represents the food delivery platform brand instead of himself or herself. The delivery driver is also required to work with other personnel of the food delivery platform to complete the delivery work); and
- delivery drivers are required to personally fulfill the delivery services (i.e. the service contract mainly asks for the provision of labour services from the delivery drivers, and the delivery driver is required to personally fulfill the delivery services and cannot delegate the work to others).
Based on the court ruling, a food delivery platform with the above-mentioned characteristics should be classified as an employer under Taiwan labour laws and relevant regulations. For example, a delivery platform shall participate in labour insurance, labour occupational accident insurance, and national health insurance for its delivery drivers, allocate certain percentages of employee salary for the labour pension fund, grant statutory leave, and comply with working hour regulations. Service contracts must also follow labour regulations’ requirements for termination and payment of severance. These developments will have key implications not only for food delivery platforms, but also other platforms in the growing gig economy.
LCS & Partners: Yu Kai-Hua
Kathleen Healy Partner
Stephanie Chiu Counsel
Ada Chan Associate
Fan Li Associate
River He Associate