August 2017
If an insurance agent can freely decide the specifics of the insurance solicitation service to an insurance company and receive compensation based on the completion such service, the relationship between the insurance agent and the insurance company shall be considered that of a contractor(Taiwan)
Ankwei Chen
The Taiwan High Court rendered the 104-Zhong-Lao-Shang-27 Civil Decision on February 2, 2016 (the "Decision"), in which it held that if an insurance agent can freely decide the specifics of the insurance solicitation service to an insurance company and receive compensation based on the completion such service, the relationship between the insurance agent and the insurance company shall be considered that of a contractor.
Appellants argued in this case that they are a couple, with the husband working as the assistant sales manager and the wife a sales agent of the Appellee. The employment agreement between the parties was terminated after Appellee revoked their sales login credentials as a result of this insurance dispute. However, the Appellee became aware on December 30, 2013 that the husband was engaged in the solicitation of investment-linked policies in violation of the employment agreement, but did not terminate the employment agreement until May 9, 2014, which constituted a violation of Article 12, Paragraph 2 of the Labor Standards Act (ÒLSAÓ). Therefore, the termination was not effective and a declaratory action was brought to declare the existence of the employment relationship between the parties.
According to the Decision, as the Appellants could arrange their work hours for their insurance solicitation business, solicit and recommend insurance agreements in manners that they preferred, as well as engage in the insurance solicitation business in a guided, planned or creative manner. All of the above are significantly different from services provided by a hired employee bound under an employment or labor agreement in which such employee must mechanically provide services pursuant to the employerÕs instructions. Further, the Appellants did not have to share their workload with their co-workers to achieve the objective of the insurance solicitation work. Moreover, if Appellants unilaterally decided to stop soliciting, it would not cause AppelleeÕs business or the other insurance agentÕs work to come to a halt. It is then sufficient to conclude that when Appellants solicited insurance for Appellee, they are not considered employees of Appellee in a personal or organizational perspective; as a result. Given that Appellants could freely decide the specifics of the insurance solicitation service provided to Appellee and receive compensation based on the completion such service, as well as the lack of any kind of employer-employee relationship with Appellee from a personal, economic or organizational perspective, the service agreement between the parties is not an employment agreement governed by the LSA but an independent contractor agreement, to which the provisions of the LSA do not apply. Consequently, the Appellants' appeal was rejected.
The Taiwan High Court rendered the 104-Zhong-Lao-Shang-27 Civil Decision on February 2, 2016 (the "Decision"), in which it held that if an insurance agent can freely decide the specifics of the insurance solicitation service to an insurance company and receive compensation based on the completion such service, the relationship between the insurance agent and the insurance company shall be considered that of a contractor.
Appellants argued in this case that they are a couple, with the husband working as the assistant sales manager and the wife a sales agent of the Appellee. The employment agreement between the parties was terminated after Appellee revoked their sales login credentials as a result of this insurance dispute. However, the Appellee became aware on December 30, 2013 that the husband was engaged in the solicitation of investment-linked policies in violation of the employment agreement, but did not terminate the employment agreement until May 9, 2014, which constituted a violation of Article 12, Paragraph 2 of the Labor Standards Act (ÒLSAÓ). Therefore, the termination was not effective and a declaratory action was brought to declare the existence of the employment relationship between the parties.
According to the Decision, as the Appellants could arrange their work hours for their insurance solicitation business, solicit and recommend insurance agreements in manners that they preferred, as well as engage in the insurance solicitation business in a guided, planned or creative manner. All of the above are significantly different from services provided by a hired employee bound under an employment or labor agreement in which such employee must mechanically provide services pursuant to the employerÕs instructions. Further, the Appellants did not have to share their workload with their co-workers to achieve the objective of the insurance solicitation work. Moreover, if Appellants unilaterally decided to stop soliciting, it would not cause AppelleeÕs business or the other insurance agentÕs work to come to a halt. It is then sufficient to conclude that when Appellants solicited insurance for Appellee, they are not considered employees of Appellee in a personal or organizational perspective; as a result. Given that Appellants could freely decide the specifics of the insurance solicitation service provided to Appellee and receive compensation based on the completion such service, as well as the lack of any kind of employer-employee relationship with Appellee from a personal, economic or organizational perspective, the service agreement between the parties is not an employment agreement governed by the LSA but an independent contractor agreement, to which the provisions of the LSA do not apply. Consequently, the Appellants' appeal was rejected.
