With respect to the participation of a factory-based union in the execution of a collective bargaining agreement and the handling of labor disputes, that a factory has its independent personnel, budgeting and accounting functions only highlights that it has a certain scale, not independence (Taiwan)

Tiffany Hsiao

The Supreme Administrative Court rendered the 108-Pan-449 Decision of September 20, 2019 (hereinafter, the “Decision”), holding that with respect to the participation of a factory-based union in the execution of a collective bargaining agreement and the handling of labor disputes, the employer that confronts the union is the head office.  Therefore, that a factory has independent personnel, budgeting and accounting functions only highlights that it has a certain scale, not independence.

According to the facts underlying this Decision, the employees of a certain operation division affiliated with the Appellant applied to the Appellee to register the establishment of the intervenor.  After the application was accepted by the Appellee, the application was reviewed pursuant to Articles 6 and 11 of the Labor Union Law and Article 2 of the Enforcement Rules of the same law.  Since it was concluded that the application met the criteria for a corporate trade union registration application, a letter was issued to approve the establishment.  Dissatisfied, the Appellant brought an administration action as an interested party.  Since the administration action was rejected, an appeal was filed.  The Appellant asserted that since the Appellant’s guidelines for the selection of new recruits and their pamphlets suggest that the selection, acceptance and assignment operations are all collectively handled by the Appellant’s head office, the operation division has no independent personnel recruitment authority.  In addition, since the operation division always handled personnel and administrative matters, it did not have the authority to decide on the recruitment or discharge of personnel.  In addition, since the approval of the intervenor’s establishment registration in the original disposition has no benefits and resulted in too many small scale labor unions in existence at the same time, thus creating undesirable results detrimental to the rights and interest of workers such as the weakening of the collective bargaining power.  Therefore, it was requested that the decision on the administrative appeal and the original disposition be reversed.

According to this Decision, the so-called “factory” under Article 6, Paragraph 1, Subparagraph 1 of the Trade Union Law shall refer to a workplace under Article 2, Paragraph 1 of the Enforcement Rules of the Labor Union Law as amended on April 29, 2011 which has independent personnel, budgeting and accounting functions, and which may apply for factory registration, company registration, business registration or commercial registration pursuant to law.  According to the legislative purposes of the above Enforcement Rules, the standard was set to avoid the weakening of the collective bargaining power as a result of too many small labor unions within the same enterprise.  According to provisions concerning workers’ representatives participating in collective bargaining in Article 6, Paragraphs 3 and 4 of the Labor Union Missions and Collective Bargaining Law formulated pursuant to Article 5 of the Labor Union Law, the confronting employer is still the head office with respect to the participation of a collective bargaining agreement, the handling of labor disputes and the promotion of terms of labor, and the confronting employer is not limited to a particular factory.  Therefore, that the factory has independent personnel, budgeting and accounting functions requires an extent of independence, which merely demonstrates that such factor has a certain relative scale rather than a high degree of independence.  To wit, it should be considered if the factory is delegated with the entirety or part of the personnel authority through budget preparation and implementation pursuant to relevant requirements for different internal lines of duties, and this has nothing to do whether the personnel, budgeting and accounting functions carried out by the factory are regulated by requirements outside of the organization or controlled within the organization.

According to provisions concerning workers’ representatives participating in collective bargaining in Article 6, Paragraphs 3 and 4 of the Labor Union Missions and Collective Bargaining Law formulated pursuant to Article 5 of the Labor Union Law, the confronting employer is still the head office with respect to the participation of a collective bargaining agreement, the handling of labor disputes and the promotion of terms of labor, and the confronting employer is not limited to a particular factory. Therefore, that the factory has independent personnel, budgeting and accounting functions requires an extent of independence which merely demonstrates that such factor has a certain relative scale rather than a high degree of independence. To wit, it should be considered if the factory has authorized entirety or part of the personnel authority or implementation budget pursuant to relevant requirements for different internal lines of duties, and this has nothing to do whether the personnel, budgeting and accounting functions carried out by the factory are regulated by requirements outside of the organization or controlled within the organization.  The gist of the appeal is groundless since it asserted that although such operation division, which had no independent authority to recruit or discharge personnel, set up an accounting office, still it only operated accommodating administrative operation of its superior agency and did not independently prepare and implement its budget or set up books and records to calculate its profits and losses, and, therefore, the operation division is not independent.