Draft Amendments to Collective Bargaining Agreement Act Penalize Refusal to Negotiate

by Christine Chen

New amendments to the Collective Bargaining Agreement Act would place new obligations on both labor and management in the collective bargaining process. These amendments were approved by the government in early 2008, and could be enacted and promulgated as early as May 1, 2011.

In addition to the Collective Bargaining Agreement Act, the Council of Labor Affairs has also revised the Labor Union and Settlement of Labor Disputes Acts.

Under the draft revisions to Article 6 of the Collective Bargaining Agreement Act, employers and labor representatives must collectively bargain in good faith. Neither side may refuse to negotiate without a legitimate reason. The new amendments expressly list the following reasons as prohibited refusals:

  • refusing to proceed with negotiations if the proposed agreements have been presented in a reasonable manner and/or time frame;
  • not answering any written notices within 60 days of receipt; and
  • rejecting to offer any information that would otherwise facilitate negotiations;

Any of these acts of non-cooperation can be the basis for the Council of Labor Affairs to determine that either labor or management is refusing to negotiate. The amendments now allow the CLA to fine a party NTD 100,000-500,000 (US$3,195-15,975) if it refuses to negotiate, according to article 32 of the Act. These fines can be imposed repeatedly when labor or management refuses to negotiate on multiple occasions.

Article 6 of the act also clarifies as to who can represent labor in negotiations. Under the new law, a party must have contractual privity in the employment relation to represent. The practical effect is that only management and government-recognized unions will be able to sit at the bargaining table.

For legal guidance on employment law in Taiwan, please contact Christine Chen.