Lexgroup Newsletter (Issue No. 331)

Date: Dec 2019

Labor

1. Labor Case Adjudication Rules

On 21 October 2019, the Judicial Yuan announced the draft "Labor Case Adjudication Rule" (Rule) for public consultation.  We summarize the key points below:

(1) In the event that all or a part of a labor case involves intellectual property right, it may be handled by the labor court.

(2) If a civil case is pending before the court, the parties may not add a new claim to such case not initiate a counter claim in respect of the labor case.

(3) If a party applies for or is deemed to have applied for labor mediation, the judge of the labor court shall promptly designate 2 labor mediators to constitute the labor mediation committee.

(4) After the parties have reached the settlement in the mediation, the court shall deduct the application fee from, and return 1/3 of the balance of, the court fee to the applicant.

(5) For cases related to intellectual property right, if the documents or materials to be examined are prohibited from disclosure according to the Intellectual Property Case Adjudication Act, the court shall follow accordingly.

(6) For cases required to be medicated first, the court of second instance may not rescind the judgment of the first instance due to its failure to hold a medication.

(7) The Rule will be effective from 1 January 2019.

Reported by: David Tsai / Naiju Kuan

2. Enforcement Rules of the Labor Incident Act

On 21 October 2019, the Judicial Yuan announced the draft Enforcement Rules of the Labor Incident Act for public consultation.  We summarize the key points below:

(1) If a labor incident initiated before the enforcement of the Labor Incident Act (LIA) has not been closed, the upcoming procedure shall be proceeded in accordance with the LIA.  If the parties have not proceeded with the oral debate on the merit of the case, the labor may apply for the transfer of jurisdiction according to the relevant regulations of the LIA.

(2) If a labor incident initiated before the enforcement of the LIA, the court fees shall be decided according to the applicable law upon the initiation, application, or appeal.  The labor incident remanded after the enforcement of the LIA shall be handled by the labor professional court or division.

(3) A labor incident initiated before the enforcement of the LIA which remains under the mediation procedure, the mediation procedure shall be proceeded in accordance with the provision of the Civil Procedure Act.

Reported by: David Tsai / Paul Hsu

3. Amendment to Tables of Monthly Contribution Classification of Labor Pension and Insured Wage of Labor Insurance

The Ministry of Labor issued a ruling on 30 October 2019 to amend tables of Monthly Contribution Classification of Labor Pension and Insured Wage of Labor Insurance to cooperate with the adjustment of the basis wage from NT$23,100 to NT$23,800 from 1 January 2020.  The ruling will be effective on 1 January 2020.

Reported by: David Tsai / Alex Li

4. Ruling of Ministry of Finance for Tax Deduction or Exemption of Foreign Professionals

On 28 October 2019, the Ministry of Finance issued a ruling providing that if a foreign professional is recognized as the foreign special professional under the Recruitment and Employment of Foreign Professionals (REFP) who has been engaged in professional work in Taiwan before 8 February 2018, and the period of the first employment agreement covers the year of 2018, such foreigner may apply for the reduction and exemption of income tax according to the REFP.

Reported by: David Tsai / Paul Hsu 

Banking

5. Ruling Related to Guarantee or Insurance Credit Extended by Banks

On 22 October 2019, the Financial Supervisory Commission (FSC) announced a ruling related to guarantee or insurance credit extended by banks.  We summarize the key points below:

(1) Subject to certain conditions, the amount of facility granted by a bank to the same legal entity guaranteed or secured by insurance provided by the foreign central government, its foreign credit guarantee agency, and the official export credit agency announced by OECD, can be excluded from the total outstanding amount of the unsecured credit under Subparagraph 2, Paragraph 2 of the authorized rules of Article 33 of the Banking Act. However, it shall still be counted in the total outstanding amount of credit extended to the same legal entity.

(2) As to the capital requirements of banks for the above-mentioned credit business, the risk weight for the amount guaranteed by the foreign central government shall be that of its sovereign country. The risk weight for the amount guaranteed or secured by the insurance provided by the credit guarantee agency, which complies with the minimum operational requirement for the qualified guarantee, may with reference to the non-central government public sector, adopt the level subordinate to the risk weight of the sovereign country.  

Reported by: Stacy Lo / Lily Huang

6. Draft Amendment to Regulations Governing the Dedicated Deposit Account of Electronic Payment Institutions

On 21 October 2019, the FSC announced the draft amendment to the Regulations Governing the Dedicated Deposit Account of Electronic Payment Institutions.  We summarize the key points below:

(1) To allow an electronic payment institution or trustee bank to open a cooperative account with the Credit Cooperative or the Agriculture Bank of Taiwan.

(2) To simplify the procedures for an electronic payment institution to open, add, close or change the managed account and cooperative account.

(3) To increase the operational flexibility for an electronic payment institution to enter into an agreement with a managing bank, to agree on the ratio of the funds received as an agent and the stored value funds which shall be deposited in the managed account and cooperative account.

(4) To add requirements for an electronic payment institution to instruct a cooperative bank to arrange the allocation of funds.

(5) To require an electronic payment institution to open the query function of the information system, enabling a managing bank to check the account at any time.

(6) To allow an electronic payment institution to open a single dedicated deposit accounts, in order to custody the funds received from business related conducts.

Reported by: Stacy Lo / Bella Chiu

Insurance

7. Amendment to Guidelines for Insurance Enterprises Engaging in Electronic Commerce

On 30 October 2019, the FSC announced an amendment to the Guidelines for Insurance Enterprises in Electronic Commerce (Amendments).  We summarize the key points below:

(1) The Amendment adds the items of internet insurance services (Internet Service) which shall be approved by the competent authority.

(2) The insurance enterprise shall provide consumer and existing insured with the legal capacity with the method approved by the competent authority to proceed with registration and identity qualification when engaging in the Internet Service.

Reported by: David Tsai

State Liability

8. Draft Amendment to State Compensation Law

On 24 October 2019, the Executive Yuan announced the draft amendment to the State Compensation Law (SCL). We summarize the key points below:

(1) The State liability caused by the public facility shall not be conditioned upon the element that the public facility is owned by the State.  

(2) For losses/damages due to the management of the private organization or individual engaged by the state for the public facility, the state shall be liable for negligence of such organization or individual. 

(3) For the state shall not be liable for or may reduce its liability for damages incurred due to the risky or dangerous activities engaged by people, provided that the warning shall have made by the management agency.  For the, natural facilities including among others, areas of mountain, water or its facilities. 

Reported by: David Tsai / Rady Lee

Company Act

9. Interpretation of Article 198 of Company Act

On 25 October 2019, the Ministry of Economic Affairs issued a ruling that in respect of the cumulative voting system under Article 198 of the Company Act, the number of votes for each share shall be the same as the number of directors to be elected, which can be used to vote in favor of one single candidate or a number of candidates. The number of "candidates" to be voted for shall not exceed the total number of the directors to be elected.

Reported by: Mike Lu / Angela Lin

Intellectual Property

10. Memorandums of Understanding Signed between Taiwan and Japan

On 30 October 2019, the Taiwan-Japan Relations Association and Japan-Taiwan Exchange Association signed the Memorandums of Understanding (MoUs) on Patent Prosecution Highway (PPH) and on Design Patent Priority Document Exchange (PDX).  Through the two cooperative programs, the Taiwan Intellectual Property Office (TIPO) and Japan Patent Office (JPO) will provide applicants with more efficient and convenient examination services.

The PPH pilot program between TIPO and JPO was launched in May 2012 which was upgraded to PPH MOTTAINAI in 2014 and extended for three years in 2017.  In view of its excellent performance, TIPO and JPO agreed that following the expiry of the pilot program, a permanent PPH will replace it, starting on 1 May 2020.  This permanent program will provide applicants with stable and convenient PPH services.

The PDX between TIPO and JPO was established in 2013 to facilitate electronic exchange of priority documents for invention and utility model patent applications.  TIPO and JPO have decided to expand the current scope of electronic exchange to incorporate design patent priority document as well.  The new service is estimated to be officially launched in April 2021.

Reported by: Jolene Wang / Linda Cheng

Housing

11. Mandatory and Prohibitory Provisions of Standard Contracts for Readily Available House and Mandatory and Prohibitory Provisions for Introduction of Property

On 31 October 2019, the Ministry of Interior (MOI) announced attached the amendments to the Confirmation of Present situation of building to the ''Mandatory and Prohibitory Provisions of Standard Contracts for Readily Available House'' and Point 2 of the ''Mandatory and Prohibitory Provisions for Introduction of Property, under which the particulars of replay pump and cell site shall be included.  The amendments will become effective on 1 May 2020. 

Reported by: Kang-Shen Liu / Edison Tang

12. Mandatory and Prohibitory Provisions of Standard Contracts for Pre-sale House

On 31 October 2019, the MOI announced that the effective date of the amendments to Points 11 and 19 in relation to building materials and disbursement of loan of the ''Mandatory and Prohibitory Provisions of Standard Contracts for Pre-sale House'' shall be changed to 1 May 2020. 

Reported by: Kang-Shen Liu / Edison Tang

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