The Supreme Administrative Court rendered the 108-Pan-110 Decision of March 14, 2019 (hereinafter, the “Decision”), holding that if an employer retains an employment institution to provide care services to foreign workers, relevant expenses shall not be directly collected by the employment institution from the foreign workers to offset the retainer fees payable by the employers.
According to the facts underlying this Decision, the Appellant was a licensed private employment service institution (hereinafter, the “Employment Institution”), which was retained by Company A (the employer) to provide the employment service involving Mr. W and Mr. U, both Indonesian workers, and to handle accommodation services for the foreign workers. The Labor Affairs Department of New Taipei Government subsequently found as a result of its service inspection that the Appellant had collected food and lodging expenses and cost of electricity for air conditioning in violation of Article 40, Paragraph 1, Subparagraph 5 of the Employment Service Law effective at the time of the act. As a result, a final disposition imposing a fine was rendered. The Appellee further suspended the Appellant from its employment services for three months under the original disposition. Dissatisfied, the Appellant brought an administrative action.
According to this Decision, the suspension disposition rendered by the competent authority in accordance with Article 69 of the Employment Service Law did not intend to penalize past illegal acts of the Employment Institution but rather to proactively prevent issues. The focus of consideration is on the commensurability between the means taken and the attainment of administrative objectives and on any violation of the principle of proportionality. In this case, the Appellee’s original disposition to impose a three-month suspension in accordance with its Guideline for Adjudicating Suspension and Revocation Cases Involving Violation of the Employment Service Law by the Organization of Private Employment Service Institutions and by Professional Employment Service Personnel should be deemed consistent with the principle of proportionality and has no legal violation for discretionary nonfeasance.
It was further pointed out in this Decision that under Article 22 of the Labor Standards Law and Article 43, Paragraph 1 of the Rules for Employing Foreign Nationals, the food and lodging expenses which foreign workers are required to assume on their own may be included in kind in wage items pursuant to a labor contract between the employer and the employee and be deducted directly from the wages to the foreign workers. As for the air conditioning equipment the employer is requested by the foreign workers to provide, if it is not included in the equipment and supplies under the care service plan, the employer may separately negotiate a reasonable amount with the foreign worker and deduct the same directly from the wages of the foreign worker to deal with the electricity cost associated with the air conditioning so provided. However, if the employer retains the Employment Institution to handle the care service items for foreign workers, the employer still assumes selection and supervision responsibilities under Article 40-2 of the Rules for Employing Foreign Nationals. Since above food and lodging expenses and air conditioning electricity cost, which should be assumed by foreign workers, are not fee items which the Employment Institution may collect from foreign workers, they should be collected by the employer from the foreign workers or should be directly deducted from the wages pursuant to the agreement before the employer makes the payment to the Employment Institution based on the remuneration or fees negotiated between the employer and the Employment Institution. The employer and the Employment Institution shall not directly collect food and lodging expenses or air conditioning electricity cost from foreign workers through a separate agreement with the foreign worker to offset the retainer fees payable by the employer to the Employment Institution. If the Employment Institution directly collects food and lodging expenses and air conditioning electricity cost from foreign workers, this would meet the circumstance of “collecting fees above the required standard” under Article 1, Subparagraph 5 of the Employment Service Law effective at the time of the act. Since the original disposition was deemed lawful, the Appellant’s appeal was dismissed.