What is the Labor-Management Conference and why should you care?

The Labor-Management Conference (“the Conference”) is a formal assembly of labor and management representatives gathered to discuss various aspects of the employment relationship. It is prescribed by Article 83 of the Labor Standards Act. The express statutory purpose of the Conference is to coordinate the employment relationship, enhance labor-management cooperation, and increase work efficiency.[1]

The employer operating in Taiwan should understand the role of the Conference. Taiwan’s labor laws and regulations together afford the employee a favorable degree of legal protection in the workplace. A consequence is that the employer must generally clear a higher statutory bar than it may otherwise need to in a jurisdiction like the United States in which many federal, state, and local laws governing employment are only prohibitory in nature.[2] In some cases, however, the employer in Taiwan possesses some latitude to loosen restrictions on limited aspects of the employment relationship. The consent of the labor union is required for this but, in its absence, the Conference may fill in. For the employer without a union seeking increased flexibility, then, the Conference takes on a heightened importance.

How does the Labor-Management Conference differ from the labor union?

With few exceptions, employees in Taiwan have the right to organize and join labor unions.[3] At the end of 2022, there were only 5,777 unions in Taiwan consisting of 5,016 institutional members and 3.43 million personal members.[4] Only 33.4 percent of the workforce was part of a union.[5] At the end of 2021, there was a total of 141,608 Labor-Management Conferences in Taiwan. Of these, 2,073 were within public entities and 139,335 were within private entities.[6]

The Conference can be distinguished from the labor union in meaningful ways. Fundamentally, the legal basis for the labor union in Taiwan is the Labor Union Act. Meanwhile, rules governing the formation and operation of the Conference, whose institution is imposed by a single article in the Labor Standards Act, are provided in the Regulations for Implementing Labor-Management Meeting (“the LMC Regulations”). As an ordinance issued by an administrative agency, it is of lesser legal authority than both the Labor Standards Act and the Labor Union Act. As for their respective legal statuses, while the labor union is a juristic person, able to assume legal rights and obligations, the Conference serves only as an internal organization within a business entity.[7]

In addition, the labor union, which can be established with thirty or more signatories, has a more ambitious mission than does the Conference. For this expansive mission it is endowed with certain unique powers. For example, unlike the Conference, it may join, amend, or repeal collective bargaining agreements.[8] It also holds the right to strike and enjoys protection under the Labor Union Act from the employer’s undue influence on union matters.[9] Lastly, it is noteworthy that the labor union commands the power to override resolutions adopted by the Conference. For instance, even if the Conference adopts a resolution to allow for the extension of working hours, the labor union may still nullify that resolution.

What are the key requirements for the Labor-Management Conference?

A Conference meeting must be held in accordance with the LMC Regulations. Here are some of its key requirements:

Applicability: Any employer to which the Labor Standards Act applies should convene a Conference.[10] The employer’s branch office should convene a separate Conference if it has 30 or more employees.[11] A newly effective Ministry of Labor interpretive rule provides that the employer with three or fewer employees can obtain the approval of individual employees in lieu of holding a Conference for matters typically requiring the formal approval of the latter at larger business entities.

Representatives: Depending on the number of employees in the business entity, employees should elect between two to 15 individuals to serve as labor representatives.[12] If an employer has 100 or more employees, the Conference must comprise five or more representatives from each side.[13] Any employee aged 15 or older has the right to vote for, and to be elected as, a labor representative.[14] Meanwhile, the employer should appoint the same number of individuals to serve as management representatives.[15] Besides having familiarity with the employer’s business and its working conditions, management representatives should also wield considerable decision-making power.[16]

Representatives serve four-year terms and may be reelected or reappointed to serve consecutive terms. Notably, management representatives need not be based in Taiwan.

Frequency: A Conference meeting should be held at least once every three months but may be held more frequently if necessary. The employer does not need to hold a Conference meeting every time a new employee joins the business entity.

The Conference may be convened only when more than half of each of the labor and management sides is present.

Resolutions: Three-fourths or more of the representatives in attendance (from both sides) must agree about a resolution for it to be approved.

What items under the Labor Standards Act must be approved by the Labor-Management Conference?

Change of Working Hours: With the approval of the Conference, the employer may make certain changes to working hours: First, the employer may distribute the regular working hours of two days within a two-week period to other workdays. At most two of these hours may be allocated to each workday. Still, the employee may not work more than 48 hours per week.

Second, with the approval of the Conference, the employer may further distribute the regular working hours within an eight-week period to other workdays. Still, the employee may not work more than eight hours per day and 48 hours per week.

Third, once more with the approval of the Conference, the employer within designated industries may distribute the regular working hours within a four-week period to other workdays, with a maximum of two hours per day.

Change of Mandatory Day Off: The employer within designated industries may, with the approval of the relevant authorities and the Conference, move the mandatory day off within a seven-day period.[17]

Extension of Working Hours: The employer must obtain the Conference’s one-time general approval for employees to work overtime. It is worth remembering that this approval only allows for the possibility of working overtime hours, and that the individual employee’s consent must be given, on each occasion, for that employee to work overtime.[18] On each occasion, the employee can choose whether to take overtime payment or compensatory leave.

Including regular working hours (of up to eight hours per day) and overtime hours, the employee may work no more than 12 hours per day. In addition, the employee may usually work no more than 46 hours of overtime per week. However, upon the approval of the Conference, the employee may work up to, but no more than, 54 hours per month of overtime, provided that the employee’s aggregate overtime hours do not exceed 138 hours over a three-month period. For example, if the employee works 54 hours of overtime in April and another 54 hours of overtime in May, he or she may only work 30 hours or fewer of overtime in June.[19]

Change of Rest Period Interval
Under the Labor Standards Act, employees working shifts should receive at least eleven hours of continuous rest between shifts. However, upon the approval of the Conference and the authorities, the employer needs to grant only eight hours or more of continuous rest between shifts.

Attendance in the Event of Natural Disasters
With the prior approval of the Conference and if the nature of the business calls for it, a business entity may ask the employee to work upon or after the occurrence of a natural disaster.[20]

What are the penalties for failing to establish the Labor-Management Conference?

Although the Labor Standards Act provides that any employer to which it applies ought to hold a Conference meeting, no provision in the Act or the Regulations penalizes the failure to do so.[21]

However, the employee faces administrative penalties if it takes, without having received the approval of the Conference, any measure requiring that approval. For example, if an employee works overtime, but the employer has yet to obtain the Conference’s general approval for overtime work, it risks administrative penalties. Even if the employer “volunteers” to work overtime, without the Conference’s approval, it remains likely that the employer has violated the law.

If the employer is found to have violated the relevant provisions of the Labor Standards Act (in our discussion, those related to working hours, time off, and leave), it faces a fine between NT$20,000 and NT$1,000,000. And if the employer is fined for violations of the relevant regulations, the authority will publicize its name, the name(s) of the individuals in charge, the article(s) contravened, the amount levied, and the date of the penalty. In addition, the authority will provide a date by which the employer must make the appropriate improvements. If the employer does not make these improvements by the assigned date, it faces further administrative fines.[22]

If you have any questions or require additional information on the legal issues related to employment matters in Taiwan, please contact Christine Chen at cchen@winklerpartners.com.

[1] Article 83, Labor Standards Act. The Labor Standards Act is Taiwan’s principal employment-related legislation. It sets the minimum terms and conditions of employment for almost all industries and occupations.

[2] Shea, Patrick, and Erin LaRuffa. “Chapter 52: United States.” Essay. In The Employment Law Review, 5^th ed., 810–21. London: Law Business Research Ltd., 2014.

[3] Article 4-1, Labor Union Act

[4] Table 3-1 from the Department of Employment Relations, the Ministry of Labor.

[5] Ibid.

[6] Table 3-7 Status of Collective Agreement and Labor-Management Committees of Enterprises from the Department of Employment Relations, the Ministry of Labor.

[7] Article 2, Labor Union Act.

[8] Ibid.

[9] Ibid., Article 35.

[10] Article 2, Regulations for Implementing Labor-Management Meeting.

[11] Ibid.

[12] Ibid., Article 3.

[13] Ibid.

[14] Ibid., Article 7.

[15] Ibid., Article 3.

[16] Ibid., Article 4.

[17] Article 36-4 and 36-5, Labor Standards Act.

[18] Ibid., Article 32-1.

[19] Ibid., Article 32-1.

[20] Point 4, Directions for Worker Attendance Management and Wage Payment by Business Entities During National Disasters.

[21] Ibid., Article 83.

[22] Ibid., Article 80-1.