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Winkler Partners seeks Legal Translator

Winkler Partners Attorneys at Law of Taiwan and Foreign Legal Affairs is seeking a full-time translator to handle English-Chinese and Chinese-English translation and related tasks including the following:

  1. Translate documents relating to our firm’s legal work, for example: translate laws, regulations, contracts, financial reports, court documents, letters from administrative agencies, and documents from other wide-ranging field including business, finance, and the environment. Edit the work of fellow translators.
  2. Translate or edit other kinds of documents as the need may arise. Assist with translation on pro-bono cases relating to social and environmental issues aligned with Winkler Partners’ core values.
  3. Coordinate with colleagues and clients on related matters such as preparing price quotations for translation cases.
  4. Help to compile translation reference materials such as glossaries and databases.
  5. Assist the legal staff on matters other than translation as the opportunity or need arises.

Requirements

  1. At least two to three years of relevant work experience or professional training (or both) in E-C/C-E translation. Experience in the law, whether academic or professional, is a strong plus.
  2. Excellent English and Chinese reading comprehension: ability to read and understand complex legal documents in English and in Chinese and translate them accurately and clearly. The candidate must be able to write Chinese at a native, professional level, and to write English at professional level.
  3. Interest in the law and legal matters.
  4. Experience with translation memory tools is a plus.

Please send a resume and anything else that you think will be helpful to evaluate compatibility to: personnel@winklerpartners.com

Exenciones a los requisitos para el permiso de trabajo en Taiwán: El Mecanismo de Consulta

This is a Spanish translation of our English article “Exemptions to Taiwan’s work permit requirements: the Consultation Mechanism”, which you can find here.
Esta es la traducción al español de nuestro artículo en inglés “Exemptions to Taiwan’s work permit requirements: the Consultation Mechanism”, el cuál se encuentra disponible aquí.

Los requisitos para la obtención del permiso de trabajo en Taiwán pueden ser un tanto inflexibles, sin embargo, existen algunas exenciones disponibles para dos de los cuatro requisitos: ingresos/capitalización mínima del empleador y experiencia laboral mínima del empleado (adquirida después de la culminación de los estudios universitarios).

Los Requisitos Básicos

La mayoría de los profesionales extranjeros en Taiwán, fuera de los que trabajan como profesores, corresponden a la Clase A (profesionales o técnicos).

Para contratar a empleados extranjeros bajo la Clase A, el posible empleador del candidato extranjero debe aplicar a un permiso de trabajo ante la Agencia de Desarrollo del Empleo (“WDA” por sus siglas en inglés) bajo la tuición del Ministerio de Trabajo.

En general, cuatro requisitos básicos deben ser cumplidos:

  1. ingresos /capitalización del empleador;
  2. nivel académico/experiencia laboral del empleado;
  3. trabajo profesional o técnico; y
  4. salario mensual mínimo de NT$47,971

Existen exenciones tanto para el requisito de ingresos/capitalización del empleador como para el de educación/experiencia del empleado. Estas exenciones no son disponibles para trabajos que no formen parte del alcance del trabajo profesional o técnico. Tampoco existen exenciones al salario mensual mínimo de NT$47,791 para profesionales extranjeros que posean títulos de universidades extranjeras (no taiwanesas).

Requisito de ingresos/capitalización

Para contratar a un profesional extranjero en la Clase A, el empleador debe ser una empresa nueva con un capital registrado de NT$ 5 millones o una empresa existente con ingresos (del último año fiscal) de NT$ 10 millones (o ingresos promedios de NT$ 10 millones durante los últimos tres años).

Requisito de nivel académico y experiencia laboral

En general, para ser contratado, un empleado extranjero debe tener un diploma universitario y dos años de experiencia laboral relacionada al trabajo por el cual se lo pretende contratar. La experiencia laboral debe ser aquella adquirida después de la culminación de los estudios universitarios.

Exenciones

Las exenciones disponibles corresponden a lo que el Ministerio de Trabajo denomina el “Mecanismo de Consulta” .

Si un empleador no llega a cumplir con el requisito de ingresos/capitalización mínima, el empleador debe adjuntar este formulario (en chino) a la aplicación de permiso de trabajo del empleado.

Si el candidato no llega a tener los dos años de experiencia laboral relacionada al trabajo que se lo pretende contratar, el empleador debe adjuntar este formulario (en chino) a la aplicación de permiso de trabajo del empleado.

Favor tomar en cuenta que los candidatos extranjeros por lo general no pueden aplicar a permisos de trabajo o a las exenciones por su cuenta. El empleador es el que debe aplicar por el permiso para contratar al candidato.

Alta tasa de aprobación

Las exenciones bajo el Mecanismo de Consulta han estado disponibles desde el 2010. Estadísticas parciales del WDA muestran que las exenciones son otorgadas a la mayoría de las aplicaciones. Desde el 2010 al 2015, 176 empleadores aplicaron a la exención del requisito de ingreso/capitalización mínima. De éstas, 156 (89%) han sido aprobadas. De forma similar, durante el mismo periodo, 50 empleadores aplicaron a la exención del requisito de experiencia laboral mínima de dos años. De éstas, 47 fueron aprobadas, alcanzando así una tasa de aprobación del 94%.

Pese a que las tasas de aprobación son altas, el número de aplicaciones es sorprendentemente bajo. Esto puede deberse a que hasta hace algún tiempo el WDA no tenía una guía clara sobre el Mecanismo de Consulta ni en inglés ni en chino.

EZ WORK Taiwán: Información sobre el Mecanismo de Consulta y Permisos de Trabajo en general

Como mencionamos anteriormente, el WDA no tenía un mecanismo directo y eficaz para transmitir información. Sin embargo, a finales de 2016, el WDA añadió una nueva sección a su página web EZWORK Taiwán, la cual proporciona información completa sobre el Mecanismo de Consulta en chino e inglés. Candidatos profesionales extranjeros pueden familiarizarse con el Mecanismo de Consulta en inglés aquí. Dado que es muy probable que el departamento de recursos humanos de las empresas taiwanesas no tenga familiaridad con el Mecanismo de Consulta, los candidatos pueden remitir a sus posibles empleadores a la misma información en chino aquí.

De forma general, la página EZ WORK Taiwán proporciona información completa en inglés y chino para la obtención de permisos de trabajo para trabajos profesionales y técnicos de la Clase A y también para otras clases de permisos de trabajo profesional incluyendo aquéllos para profesores, artistas e intérpretes. Reiteramos que remitir a los posibles empleadores a la versión en chino de la página puede ser de mucha ayuda especialmente si es la primera vez que la empresa contrata a un empleado extranjero.

Reglas especiales para graduados de universidades taiwanesas y empleados de algunas empresas emergentes (startups)

Cabe mencionar que existen reglas especiales para graduados extranjeros de universidades taiwanesas y empleados de algunas startups que cumplen ciertos requisitos (“startups calificadas”). Estas reglas especiales se encuentran fuera del alcance de este artículo pero más información sobre el Sistema de Puntaje para graduados extranjeros de universidades taiwanesas se la puede encontrar aquí. Empleados de startups calificadas no están sujetos al requisito de experiencia de trabajo mínima de dos años.

Amendments to Trade Secrets Act proposed

The Taiwan Intellectual Property Office (“TIPO”) has recently held a series of public hearings on proposed amendments to Taiwan’s Trade Secrets Act (the “Act”). The amendments under discussion include provisions that would give foreign corporations standing to bring private prosecutions for trade secret misappropriation and extend trade secret protection to foreign nationals from jurisdictions that are parties to multilateral treaties. Participants in the hearings also took the opportunity to urge that a mechanism be created to redact sensitive parts of judgments and that the Act address fair competition issues in trade secret protection.

Private Prosecutions and Scope of Trade Secret Protection

Currently foreign corporations without a presence in Taiwan do not have standing to file criminal complaints or private prosecutions for trade secret misappropriation.[1] The TIPO has proposed adding a new Article 13-5 to the Trade Secrets Act that would create a statutory exception permitting such private prosecutions.

The TIPO has also proposed amending Article 15 of the Act to extend trade secret protection to jurisdictions that are members of multilateral treaties to which Taiwan is also a party. Since Taiwan is a member of the WTO, this amendment would extend trade secret protection to businesses from other WTO member jurisdictions. Article 15 currently provides that Taiwan’s protection of trade secrets extends to those jurisdictions whose laws protect Taiwanese trade secrets. The draft amendment of Article 15 clarifies that such laws need not be statutory laws. In other words, if a jurisdiction’s case law protects Taiwanese trade secrets, Taiwan trade secret protection would reciprocally protect trade secrets from that jurisdiction.

Access to Confidential Information

The Act currently permits a judge to issue a protective order restricting access to party filings during litigation. A judge can also order closed hearings to protect trade secrets. The TIPO is proposing a new Article 13-6 that would give prosecutors similar powers during the investigative proceedings that precede an indictment. This amendment has been controversial and it is unclear whether the TIPO will revise its draft of 13-6 or abandon it entirely.

Judgements and Fair Competition

In addition to the amendments proposed by the TIPO, participants in the hearings also discussed whether there should be a mechanism to allow parties to trade secret litigation to comment on judgments before they issue. Proponents of this mechanism take the view that the court should consider the views of the parties as to whether a judgment discloses confidential information before the judgment is published. Such a mechanism could ultimately lead to partial redactions of published judgments to avoid disclosures.

Others at the hearings recommended adding language to the Act prohibiting competitors from obtaining trade secrets by means of coercion, incentives, or other unfair means. A similar prohibition in the Taiwan Fair Trade Act was removed in 2015.

Future Developments

The proposed amendments to the Act reflect the continuing concerns that Taiwanese technology companies have about the adequacy of Taiwan’s trade secret protection. The TIPO will now consider the views expressed during the hearings with a view to revising the proposed amendments prior to submitting them to the Executive Yuan for approval. If approved by the Executive Yuan, a bill will be introduced to the legislature where lawmakers may make further changes before enacting or rejecting the bill.

We recommend that businesses concerned with trade secret protection in Taiwan monitor these amendments as they make their way through the legislative process. There will be further opportunities for international businesses to make their voices heard on this important issue before the law is changed.

For more information about trade secret protection and other intellectual property matters in Taiwan, please contact Christine Chen at cchen@winklerpartners.com.


[1] A 1931 Judicial Yuan interpretation generally precludes unregistered foreign corporations from filing private prosecutions under Article 319 of Taiwan Code of Criminal Procedure unless the legislature has created a statutory exception. Judicial Yuan Interpretation 533. Taiwan Copyright, Trademark, and Patent Acts already have statutory exceptions for unregistered foreign corporations. Taiwan’s Supreme Court has however held that US companies may file private prosecutions under the Treaty of Friendship, Commerce and Navigation between the United States of America and the Republic of China.

Taiwan constitutional court issues decision on marriage equality

Taiwan’s constitutional court today issued Interpretation 748 holding that Book IV Chapter II (marriage) of the Taiwan Civil Code is unconstitutional to the extent that it does not permit same-sex couples to enter into a permanent, exclusive, and intimate relationship in violation of Articles 22 (freedom of marriage) and Article 7 (right to equality before the law) of the Taiwanese Constitution.

The court gave the Taiwan Legislature two years to amend the current Civil Code or enact a new law consistent with Interpretation 748. While the court deferred to the Legislature to decide what form equal protection for marriage freedom should take, it also set a time limit for legislative action.  If the Legislature fails to take action within the next two years, same sex couples can register their marriages under the existing Civil Code.

Taiwan’s Ministry of Labor further clarifies new leave rules

Since amendments to Taiwan’s Labor Standards Act (the “LSA”) came into force in December 2016, both employees and employers have often found themselves unsure of how the changes apply in the workplace. In order to clarify how employers can in practice comply with these amendments regarding flexible rest days and avoid potential disputes with their employees, the Ministry of Labor (the “MOL”) has subsequently issued two interpretative letters. Below is a summary of these two letters, and what they mean for employers.

Make-up leave on flexible rest days

Previously under the LSA, employees who consent to work on flexible rest days could only choose to be provided with overtime payment in respect of their hours worked. The MOL has now clarified that such employees can choose either make-up/compensatory leave or overtime payment after the fact (i.e. after their overtime work has been completed). There must be some written agreement between employers and employees stating clearly the relevant standards for make-up leave, the period within which the make-up leave should be taken, and how any outstanding make-up leave is dealt with at the end of this period. Employers cannot force their employees to choose make-up leave.

This written agreement can be in the form of email correspondence, or a simple consent letter which is signed by the employee each time they complete overtime work on a flexible rest day. In the event of a dispute arising, the burden of proof falls on the employer.

Inability to work on flexible rest days/overtime

A second and related interpretative letter issued by the MOL deals with the situation where an employee agrees to work on a flexible rest day, however due to some personal reason (e.g. sickness) is either (a) unable to come to work at all, or (b) comes to work but is unable to complete the agreed hours of work. Previously, in such a situation, the employee would have to take personal or sick leave and the employer would still have to pay the full overtime pay amount in line with the recent flexible rest day overtime rules (please see our previous update here). This lead to many employment disputes, and was perceived as being unfair to employers. As such, the MOL has clarified that the employees’ consent to work on flexible rest days can be effectively rescinded where they are unable to work due to personal reasons.

In situation (a), this means that the employee will need to inform their employer of their inability to work, and the employer can negotiate with the employee to rescind the employees’ overtime obligation so that they do not need to take leave and overtime pay does not need to be provided.

In situation (b), in respect of the time when the employee is absent, the employer can negotiate with the employee to rescind the employees’ overtime obligation so that they do not need to take leave and overtime pay does not need to be provided. The employee’s overtime period can be dealt with as make-up leave. The details of how the employee’s absence from work in both situations (a) and (b) is dealt with can be mutually agreed upon in writing in a separate agreement, such as work rules, collective agreements (where there is a labor union) or employment contracts.

The MOL has further stated that only the amount of actual overtime hours worked will count towards the total amount of overtime (which cannot exceed 12 hours in one day or 46 hours in one month, under Article 32 of the LSA). This differs from the calculation of overtime payment.

Further developments

As the MOL releases further clarifications on the LSA amendments, employers must ensure that employees are made aware of the rules governing working on flexible rest days, overtime, and annual leave. This will ensure that disputes are minimized or avoided all together, and will prevent administrative penalties being levied on employers.

For more information on Taiwan employment matters, please contact Christine Chen at cchen@winklerpartners.com.

WP awarded B Corporation certification

Winkler Partners, a full service law firm based in Taipei, Taiwan, has become the first legal service provider in Asia to become a Certified B Corporation. According to B Lab, a non-profit that awards B Corporation certification, Winkler Partners is the 17th company in Taiwan to be certified. Worldwide, only 36 legal service providers have received certification, out of a total of 1932 companies since B Lab began awarding certification in 2007.

B Corp stands for Benefit Corporation, a type of for-profit corporate entity that places an equal importance on sustainability, working for the shared benefit of workers, stakeholders, wider society and the environment, as it does on profit making. B Corps adhere to greater accountability and transparency rules than traditional companies. Currently, 30 states in the United States, Italy and the UK (known as Community Interest Companies) allow for Benefit Corporation entities to be formed. B Lab provides certification for businesses in other jurisdictions whose corporate laws do not yet provide for registration as a Benefit Corporation.

The B Corp assessment survey covers sections on Environment, Workers, Customers, Community, Governance, and based on the answers, an Overall score is given. These scores make up our B Impact Report, which can be viewed here. Winkler Partners obtained an Overall score of 98, with 80 being the minimum score needed to receive certification.

Winkler Partners scored high for Environment, which takes into account our commitment to reducing energy usage and increasing energy savings, our extensive recycling program and measurement of our carbon footprint, the use of environmentally friendly products throughout our office, rainwater capture and our roof garden. We also scored above the B Corp median score for Workers, where our salary, benefits, diversity and work environment were evaluated; and Community, where our membership of 1% for the Planet, support for Wild at Heart Legal Defense Association and other organizations, as well as pro-bono work for Forward Taiwan were taken into consideration. Going forward, B Corp certification will allow us to effectively evaluate the ongoing contributions we make to these communities and enable us to identify areas in which we can improve.

You can read more about our commitment to our colleagues, clients and community on our B Corp profile page here. You can find out more about B Lab and the B Corp movement here. For more information on Winkler Partners’ B Corp certification, please contact James Hill at jhill@winklerpartners.com or +886 (0) 2 2311 2345 extension 535.

Data protection enforcement decisions by Taiwan’s Financial Supervisory Commission

Taiwan has had data protection laws since the mid-1990s, but a new era in data protection began in October of 2012 when the Personal Information Protection Act of 2010 (the “PIPA”) took force.

Enforcement of the PIPA is dispersed. Instead of having a single data protection authority (DPA), central government regulators share responsibility for enforcing the PIPA along with local governments. In addition, the Ministry of Justice plays an important coordinating role and interprets the PIPA.

The only regulator that publishes its data protection enforcement decisions is the Financial Supervisory Commission (“FSC”). The FSC is Taiwan’s super-regulator for financial industries. In this role, it oversees securities and futures firms, banks, and insurers. FSC data protection enforcement decisions are thus an important source for understanding enforcement of the PIPA by Taiwan’s executive branch.

Enforcement Cases by the Numbers

The FSC has published 16 enforcement decisions since the PIPA took force in 2012. The number of enforcement decisions in each year has varied. For example, while seven decisions were issued in 2016, no decisions were issued in 2015. Between 2012 and 2014, the FSC issued an average of two or three FSC enforcement decisions each year.

The seven 2016 enforcement decisions included five enforcement decisions against insurance companies by the FSC Insurance Bureau and two decisions against banks by the FSC Banking Bureau. As of this writing (March 2017), the FSC has already issued two enforcement decisions. Both of the 2017 decisions have been against insurers.

Of the various FSC sub-agencies, the Insurance Bureau has been the most active in its PIPA enforcement. Eleven of the 16 FSC enforcement decisions since 2012 have been insurance cases while just five decisions have been banking cases. Thus two trends can be identified. The first is increasing overall enforcement activity by the FSC since 2016. The second is that the FSC is especially concerned about the collection, processing, and use of personal information by the insurance industry.

We anticipate that these trends will continue and expect to see an increasing number of PIPA enforcement cases issued by the FSC with a focus on the insurance industry.

Types of Enforcement Decisions

FSC Enforcement decisions since 2012 can be categorized into four types: data breach cases, failure to obtain consent cases, inadequate security cases, and cases involving failure to notify.

1. Data Breaches

Data breaches are the most common reason for enforcement decisions. In general, these cases have involved negligent disclosures of customer personal information. In some cases, the disclosures were caused by poorly designed or maintained internal control and internal audit mechanisms while in other cases there were procedural errors in the course of business. Examples of data breaches cases are briefly discussed below in reverse chronological order by the date of the enforcement decision.

10 January 2017: Nan Shan Life Insurance Co., Ltd. improperly mailed policyholder personal information to third parties in the course of mailing notices to policyholders. The FSC found that the personal information disclosures were caused by execution errors in Nan Shan’s computer system. This enforcement decision is notable because the FSC also found that the breach was material and penalized Nan Shan for failing to immediately report the breach. This is the only enforcement decision to date in Taiwan that addresses late reporting.

11 April 2016: A customer requested information about salary transfers to the customer’s account at Cathay United Bank. In its response to the customer’s request, Cathay United Bank’s Da’an Branch disclosed the personal information of another customer to the requesting customer.

22 August 2013: CTBC Bank committed an error in its internet banking operations that enabled any internet user to enter, browse, and obtain customer information stored in the bank’s internal index pages.

2. Failure to obtain consent

Enforcement decisions have also been made against financial enterprises who have violated the PIPA by providing personal information of customers for use by third parties without first obtaining the customers’ consent. This type of case is illustrated by the following enforcement decisions.

29 June 2016: Mega International Commercial Bank, without having obtained the consent of its customers, provided basic customer personal information to its affiliate Chung Kuo Insurance Company Limited to conduct telemarketing.

4 October 2013: A Nan Shan Life Insurance solicitor, without obtaining written permission from the policyholders, gave personal information of customers to a third party whom the solicitor had engaged to answer policyholders’ questions about a policy.

10 July 2013: A Chang Hwa Commercial Bank, Ltd. employee made a query to the Joint Credit Information Center about a customer’s credit information without having obtained the customer’s written consent.

3. Inadequate Security

Cases of this type include the following:

16 November 2016: PCA Life Assurance Co., Ltd. inadequately implemented its 2015 personal information inventory operations, resulting in failure to delete personal information before the expiration of the relevant retention period.

11 November 2016: Mercuries Life Insurance Co., Ltd. was penalized for having inadequate overall personal data protection measures and a lack of effective internal control mechanisms in conducting its information operations.

8 September 2016: A Fubon Life Insurance Co., Ltd. customer complaint handler failed to adopt appropriate security measures and failed to use encryption when sending photocopies of policyholder call-in card applications to personal email addresses.

4. Failure to notify

14 February 2017: Mercuries Life Insurance Co., Ltd. was penalized for failing to expressly inform data subjects of statutorily required matters when it collected personal information of customers through its official website on a web page it provided for customer email queries about insurance.

Penalties

Under the PIPA, regulators are empowered to order private sector actors to remedy a violation of the PIPA. Failure to remedy the violation by a prescribed deadline will result in an administrative fine ranging from NT$20,000 (c. US$650) to NT$500,000 (c. US$16,300). However the FSC also has the power to fine financial businesses when they violate rules governing internal controls, and these fines are considerably higher than the fines that may be imposed under the PIPA. A notable feature of the FSC enforcement decisions is that when the FSC determines that a financial institution has violated the PIPA, it usually also finds that the same facts simultaneously constitute a violation of internal controls. As a result, the fines imposed in most FSC enforcement decisions are generally the higher fines for violation of internal controls.

In less serious cases, the administrative fine for a violation of internal controls in a data protection case is NT$600,000 (c. US$19,570). However higher fines are imposed in more serious cases. For example the FSC imposed a fine of NT$1.2 million (c. US$39,100) in the 2016 PCA Life Assurance case where PCA Life Assurance failed to delete personal information by the expiration of the retention period. Relatively high fines were also imposed in two cases involving external leaks of personal information: NT$3 million (c. US$97,830) in a 2014 case in which an ex-employee of Cathay United Bank had downloaded personal information of customers onto a private external storage device, and NT$4 million (c. US$130,400) in the 2013 CTBC Bank data breach case.

Typically, these fines for violations of internal controls are also accompanied with an order to remedy the PIPA violation by a prescribed deadline. In the majority of cases, a deadline of one month was set to remedy the PIPA violation. In a minority of more serious cases, a deadline ranging from seven to ten days was set.

To date, the FSC has imposed stand-alone PIPA fines in just three cases: the 2016 Mega International Commercial Bank decision, the 2013 Nan Shan Life Insurance decision, and the 2013 Chang Hwa Commercial Bank decision. The administrative fines imposed by these decisions were respectively: NT$50,000 (c.US$1,630), NT$20,000 (c. US$650), and NT$50,000 (c. US$1,630). All three of these cases fall in the category of providing a customer’s personal information for use by a third party without having obtained consent.

Conclusions

Taiwan’s Financial Supervisory Commission is actively enforcing violations of the PIPA with remedy orders and fines. While fines remain low by international standards, Taiwan’s media covers violations of data protection law extensively. As a result, members of the public and consumers are increasingly aware of their rights under the PIPA and are already highly sensitive to disclosures of personal information. This will put pressure on other regulators to follow the FSC’s lead and publish enforcement decisions. Ultimately Taiwan is likely to follow regional and international trends and replace dispersed enforcement with centralized enforcement by a unitary data protection authority.

For more information on data protection and privacy matters in Taiwan, please contact Chen Hui-ling at hchen@winklerpartners.com.

Frequently asked questions on merger control in Taiwan

We receive regular inquiries from foreign clients as to whether a particular transaction requires making a merger control filing in Taiwan. The following is the first installment of a multi-part series in which we explore commonly asked questions related to merger control in Taiwan. This first installment covers basic questions related to the scope and coverage of Taiwan’s merger control regulations.

1. Does Taiwan have merger control regulations?

Yes. Taiwan’s Fair Trade Act (the “FTA”) includes merger control provisions. The FTA empowers Taiwan’s Fair Trade Commission (the “FTC”) to prohibit transactions it determines would have a net-negative market impact, after weighing the transaction’s anti-competitive or other adverse effects on the Taiwan market against any countervailing economic benefits.

2. Does Taiwan have pre-merger reporting requirements?

Yes. The FTA requires pre-merger notification if a regulated transaction meets certain market impact thresholds.

3. Do global transactions require filing in Taiwan?

Yes, provided that the transaction: (i) falls within one or more of the categories of regulated transactions and (ii) meets certain market impact thresholds, as set forth in the FTA.

4. What types of transactions are covered by the FTA?

The FTA applies to typical merger and acquisition transactions such as statutory mergers and share or asset purchases. Share and asset purchases for less than the entirety of a target business may be deemed regulated transactions under the FTA.  With respect to share purchases, any transaction resulting in the acquirer holding one-third or more of the voting shares of the target would be covered by the FTA.  Likewise, an asset purchase of a principal or major portion of the assets of a target would fall within the scope of the FTA. The FTA’s regulatory purview also extends to other business combinations including joint ventures and various other arrangements whereby one entity has de facto or contractual control over the operations of another.

5. What are the relevant market impact thresholds?

The FTA requires filing if any one of the following conditions exists with respect to a regulated transaction:

  • upon consummation of the proposed transaction, the combined entity would control one-third of the relevant market in Taiwan;
  • prior to the consummation of the proposed transaction, one of the participants in the transaction controls one-fourth of the relevant market in Taiwan;
  • during the immediately preceding fiscal year, (A) one of the transaction participants had sales revenue in Taiwan exceeding NT$15 billion (~US$465.5 million) and (B) the other participant had sales revenue in Taiwan exceeding NT$2 billion (~US$62.1 million)[1]; or
  • during the immediately preceding fiscal year, (A) one of the transaction participants had global sales revenue exceeding NT$40 billion (~US$1.32 billion) and (B) two participants each had sales revenue in Taiwan exceeding NT$2 billion (~US$62.1 million).

6. Are there any exemptions to the FTA filing requirements?

Yes. Common restructuring transactions are exempted from the FTA filing requirements.  Such transactions include:

  • the merger of (i) a parent enterprise (the “Parent”) with (ii) another enterprise, 50% or more of the voting interests of which is held either directly by the Parent or indirectly by a wholly-owned direct subsidiary of the Parent;

  • the merger of enterprises 50% or more of the voting interests of which are held directly or indirectly (not illustrated below) by the same Parent;

  • a transfer by a Parent of (i) all or a principal part of its business or assets or (ii) all or any part of its business that could be operated separately, to another newly established enterprise wholly-owned by the Parent; and the redemption of shares from certain shareholders by an enterprise (pursuant to certain provisions in the Company Law or the Securities and Exchange Law) resulting in any remaining shareholder(s) holding more than one-third of the outstanding shares of the enterprise.

In the coming months, we expect to publish additional installments of this FAQ.  Future installments will cover questions related to the definition of “relevant market” as well as filing procedures and content.  For more information on mergers and acquisitions in Taiwan, please contact Gregory A. Buxton at gbuxton@winklerpartners.com.


[1] Note that different sales revenue thresholds apply to financial holding companies.

Diez consejos en cuanto a relaciones laborales en Taiwán

This is a Spanish translation of our English article “Ten tips for Taiwan employment contracts”, which you can find here.
Esta es la traducción al español de nuestro artículo en inglés “Ten tips for Taiwan employment contracts”, el cuál se encuentra disponible aquí.

El ámbito laboral se ha convertido en un tema de suma importancia en Taiwán dado que el número de demandas laborales iniciadas por empleados ha incrementado significativamente en años recientes. En este artículo presentamos una lista de diez consejos a tener en cuenta toda vez que un empleador se encuentre negociando o elaborando un contrato de trabajo en Taiwán. Pese a no proporcionar una lista exhaustiva, este artículo contiene información vital para los contratos de trabajo a ser implementados en Taiwán para evitar los problemas que vemos de forma regular en nuestra práctica laboral.

1. Uso de un contrato de trabajo escrito

Taiwán no tiene leyes o regulaciones que específicamente regulen los contratos de trabajo y por tanto, los empleadores gozan de cierta flexibilidad con respecto al formato de sus contratos de trabajo. Pese a que no existe una ley explícita que requiera contratos laborales escritos, para asegurar claridad y evitar potenciales disputas con los empleados en el futuro, es recomendable que los empleadores usen contratos laborales escritos en Taiwán.

2. Uso de un manual del empleado / reglas de trabajo

Empleadores que contraten 30 o más empleados deben tener un manual del empleado o reglas de trabajo. Aunque no se llegue al límite de 30 empleados, muchas empresas eligen tener de forma separada, un manual del empleado o reglas de trabajo que también formen parte del contrato laboral. Tener un documento separado (pero vinculante) que detalle elementos de la relación laboral como los derechos de propiedad intelectual, disciplina y convenios restrictivos, otorga a los empleadores mayor seguridad respecto a los derechos y obligaciones mutuas emergentes del contrato de trabajo.

3. Establecer claramente el término del contrato

Los contratos laborales en Taiwán son de término indefinido a menos que se especifique un término fijo. Los empleados empiezan a gozar de todos los derechos laborales otorgados bajo ley en cuanto comienza la relación laboral. Mientras que los periodos de prueba pueden existir en los contratos laborales, éstos son de uso limitado en Taiwán. Esto se debe a que la terminación de la relación laboral en Taiwán no puede ser a mera voluntad del empleador, sino que dicha terminación debe cumplir siempre con los requisitos especificados bajo la Ley de Normas Laborales (“LSA” por sus siglas en inglés).

4. Protección a la propiedad intelectual

Entre las buenas prácticas en contratos laborales está la clara definición de los derechos de propiedad y creación en relación a toda propiedad intelectual ya existente y futura que se encuentre dentro del alcance de las funciones del empleado. La protección puede ser reforzada haciendo referencia en el contrato laboral al manual del empleado o cualquier otro acuerdo escrito que detalle con especificidad los derechos de propiedad intelectual relevantes.

5. Definir claros convenios restrictivos

De forma similar a los derechos de propiedad intelectual, describir claramente los derechos y obligaciones de los empleados durante y después de terminada la relación laboral con respecto a secretos comerciales, información confidencial, y restricciones a la competencia y solicitación, es un aspecto crucial en cualquier contrato de trabajo en Taiwán. El alcance de los convenios restrictivos con respecto a la no competencia y solicitación deben ser razonables. Por ejemplo, el término de duración de la prohibición a la competencia no puede ser más de dos años, el empleador debe tener un interés legítimo a proteger, las funciones laborales y la posición del empleado que se retira deben ser suficientes para otorgarle acceso al interés legítimo que el empleador pretende proteger, y el empleado debe recibir compensación razonable por cualquier pérdida ocasionada por aceptar el convenio de prohibición a la competencia. Si la cláusula no se ajusta a los principios antes mencionados, es muy probable que las cortes de Taiwán no la consideren válida y ejecutable.

6. Cumplir con leyes relacionadas a la transferencia / despido de empleados

Todo empleado despedido a raíz de un proceso de restructuración o cambio de propietarios de la empresa tiene derecho a indemnización y preaviso bajo la ley. La LSA especifica las circunstancias en las que un empleado puede ser despedido legalmente en Taiwán con preaviso e indemnización, como en el caso de transferencia de propiedad o suspensión de actividades de la empresa. Existen muy pocas circunstancias en las que un empleador puede despedir a un empleado sin preaviso o indemnización. Ejemplos de estas limitadas circunstancias son el grave incumplimiento del contrato laboral o la divulgación de secretos comerciales de la empresa por parte del empleado.

7. Elegir el idioma correcto

Las cortes de Taiwán reconocen los contratos de trabajo redactados en chino o inglés. En el caso de existir un contrato laboral en ambos idiomas, es recomendable especificar en el contrato, cual versión rige en caso de un conflicto entre ambas versiones. Es bueno tomar en cuenta, que muchas veces las cortes en Taiwán deciden que la versión que rige es la del idioma chino.

8. Definir jurisdicción y mecanismos de resolución de disputas

La vía de mediación es disponible a los empleados ya que cada gobierno local en Taiwán tiene una oficina que ofrece mediación y apoyo legal sin costo a empleados que tengan disputas con sus empleadores. Las cortes de Taiwán tienen divisiones especializadas en manejar casos relaciones a temas laborales. Es común que los contratos laborales, particularmente aquellos que implican a entidades o empleados extranjeros, contengan una cláusula que indica que la ley aplicable en caso de disputa es la de la República de China (Taiwán) y que las partes deben  usar sus mejores esfuerzos para llegar a un acuerdo mutuo mediante consultación o mediación antes de iniciar un litigio.

9. Especificar beneficios requeridos por ley

Las leyes de Taiwán establecen que los empleadores que tengan una entidad legal constituida en Taiwán deben aportar al Seguro Nacional de Salud y al Seguro Laboral de cada empleado. Estos y otros beneficios, los cuales deben ser pagados por el empleador, no pueden ser alterados por parte del empleador de forma desfavorable en el contrato laboral.

10. Evitar cambios a las condiciones laborales

Existen restricciones impuestas a empleadores que pretendan cambiar las condiciones laborales del empleado (como el lugar de trabajo) en un contrato de trabajo. Por ejemplo, muchas empresas transnacionales desean poder decidir el lugar de trabajo de sus empleados arbitrariamente; sin embargo, nuevas modificaciones a la LSA establecen que los empleadores que pretendan hacerlo deben cumplir con algunos principios generales o sino estarían incumpliendo el contrato laboral y la LSA. Los principios generales incluyen: (a) el cambio debe ser por las necesidades de la empresa y por un propósito justificable; (b) no pueden hacerse cambios desfavorables en cuanto a salario u otras condiciones de trabajo; (c) los cambios deben ser adecuados a las habilidades especificas del empleado; (d) los empleadores deben proporcionar asistencia a los empleados si el lugar de trabajo es inconveniente; y (e) los empleadores también deben poner en consideración los intereses de los familiares del empleado.

Tomando en cuenta los diez consejos arriba mencionados al redactar sus contratos de trabajo puede ayudar a evitar potenciales disputas laborales de forma preventiva. Para más información sobre temas laborales en Taiwán, favor contáctese con Christine Chen cchen@winklerpartners.com o +886 (0) 223112345 externo 307.

Personal information concerns when conducting due diligence

Transactional attorneys are intimately familiar with due diligence requests (“DDR”). A prospective buyer (“Buyer”) will typically deliver to a target company (“Target”) a DDR which includes a section requesting information related to a Target’s employees and the circumstances of their employment. In Taiwan, we advise Buyers to take steps to ensure they do not inadvertently collect such employees’ personal information, thus violating Taiwan’s Personal Information Protection Act (“PIPA”).[1]

PIPA permits personal information to be collected and processed only in situations where there exists: (i) a specified purpose for such collection and processing; and (ii) one or more of six qualifying conditions.

Purpose

Although the specified purpose must be reasonable, the data collector or processor is largely left free to determine the purpose for collecting or processing any personal information. There is no indication that due diligence associated with an acquisition transaction would not be considered a reasonable purpose for the collection or processing of personal information under PIPA.

Qualifying Conditions

Unlike the purpose requirement, the list of qualifying conditions is strictly limited to the specific conditions delineated in the statute. In the context of an acquisition transaction, the relevant qualifying conditions would likely be one or more of the following:

  1. a contractual or contract-like relationship between data processor or collector and the data subject; or
  2. the data subject’s consent.

Contract or contract-like relationship

In an acquisition context, a Buyer, as data collector, is not in direct privity of contract with Target’s employees; therefore, no direct contractual relationship exists between the data collector and the data subject. However, PIPA and related regulations allow for a less formal contract-like relationship to suffice as a qualifying condition for personal data collection. Such relationships are typically found to exist in pre-contract negotiations or contract formation processes. For example, a contract-like relationship would exist between an employer and a potential employee during the hiring process, prior to any contract actually being signed. Given that Buyers normally do not negotiate with a Target’s employees during the pre-signing phase of a transaction, it is extremely doubtful that any contract-like relationship would be found to exist which would justify the collection of Target employees’ personal information.

We note that this reading of the PIPA creates a slight tension with Taiwan’s Business Merger and Acquisition Act (“BMAA”) pursuant to which a Buyer may negotiate with a Target to determine which of Target’s employees will be retained post-closing. However, the intention of the BMAA to allow such negotiations is not a basis to find that a Buyer has a contract-like relationship with a Target’s employees sufficient to justify collection of their personal information.

Consent

If there is neither a contractual nor contract-like relationship between the Buyer and Target’s employees, the only remaining qualifying condition that would allow for the collection of the employees’ personal information would be receipt of consent from the employees themselves. In the vast majority of cases, this is both impractical and undesirable as Buyers normally wish to keep transactions as confidential as possible.

Personal information

Absent a clear cut path to the legal collection of Target employees’ personal information, we encourage prospective Buyers to take steps to ensure that no personal information is collected from Taiwan data subjects.

In Taiwan, personal information is defined as any information that can directly or indirectly identify a natural person. Buyers should, therefore, request any Target to redact employees’ names, national identification numbers, addresses, and any other information that could identify an employee from all employment agreements before disclosing such agreements. Similarly, payroll information can be disclosed only if employees’ names and other identifying information are redacted.

We recommend that any DDR sent by a Buyer to a Taiwan Target clearly request that any and all employee information to be provided pursuant to such a DDR must not contain employees’ personal information. For more information on data protection and privacy matters in Taiwan, please contact Chen Hui-ling at hchen@winklerpartners.com and Daniel Chen at dchen@winklerpartners.com.


[1] It is important to note that a Buyer’s liability extends to the acts of its agents and professional advisors. So, a Buyer would remain liable even if a DDR were sent out on its behalf by its lawyers or other professional advisors.

 

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