The Supreme Court rendered the 106-Tai-Shang-156 Civil Decision of February 15, 2017 (hereinafter, the “Decision”), holding that if a worker is seconded from the original business organization to an affiliated enterprise on the basis of temporary transfer, the employment relationship exists between the original business organization and the worker.
According to the facts underlying this Decision, A asserted that Company B had spun off its originally owned factory into Company C and subsequently transferred A to work in Company C. Later, A was unilaterally informed by Company C that A could only receive the minimum wage. Applying for labor dispute mediation to no avail, A terminated the employment contract between the parties and filed a complaint to compel Company B to pay the severance pay pursuant to law.
According to the Decision, if the original business organization and the affiliated enterprise are different juristic persons, when a worker is seconded from the original business organization to its affiliated enterprise based on temporary transfer, the employment relationship exists between the original business organization and the worker. This is different from the circumstances where for workers who are retained based on negotiation between the old and new employers as a result of the restructuring or assignment of the business organization, the employment relationship exists between the new business organization and the employee.
According to the Decision, A asserted that he had been employed by Company B and had only been transferred to Company C by the same employer, a fact confirmed by the minutes of a labor pension reserve supervisory committee meeting organized by Company B which indicated that since Company C, a spun-off factory of Company B, and Company B were the same employer with the same address and all employees were retained, pension to the retained employees who retire pursuant to law should be paid out of Company B’s pension reserve. Moreover, if a business organization is restructured or assigned with negotiation conducted to retain employees, the terms of labor between the new employer and the retained workers should be specified in writing and communicated to the workers pursuant to law. Since Company B did not substantiate that such communication with the worker had been completed, the credibility of Company B’s defense was questionable. Therefore, since the fact concerning whether A was hired by Company B because of the temporary transfer in this case should be further investigated, the original decision was reversed and remanded.