Hiring is important, for countless reasons, one of them being that firing is difficult.

Taiwan is not an at-will termination jurisdiction. In Taiwan, terminating an employee’s employment may only be done with cause, which could be either punitive or non-punitive.

Termination for punitive cause basically involves an employee at fault. For instance, the employee lied in his resume, was violent to his employer or co-workers, wilfully caused damage to company equipment or products, deliberately leaked company trade secrets, or went AWOL for 3 consecutive days or for 6 days in one month without good reason.

Termination for non-punitive cause, on the other hand, typically involves economic business reasons on the part of the company or incompetence on the part of the employee. Economic business reasons come in 4 forms, including company cessation or transfer of ownership, business loss, business shutdown for more than one month due to force majeure, and change in business resulting in reduced workforce. Employee incompetence refers to the employee’s inability to meet the demands of the job.

In firings for non-punitive cause, the employer has to give prior notice and pay severance, whereas firings for fault do not have the same requirements. During the notice period, the employee is entitled to come to work and get paid, and gets up to 2 days off each week to go find his next job. If the employer chooses to effect immediate termination without the employee having to come to work during the notice period, the employer may straight out pay the employee’s salary in lieu of the notice period.

How long notice period should be depends on how long the employee has worked with the employer. Likewise, the amount of severance depends on how long the employee has worked with the employer. In most cases, an employee is entitled to a half-month pay for every year of service.

The information above is intended to give a general introduction only and does not constitute legal advice. If you require further assistance, please contact alicia.hsu@dentons.com.tw (August 2020).