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  • Interpretation
  • No.351【Under Translation】
  • Date
  • 1994/06/17
  • Issue
    • Are the employees who remain with state owned enterprises when they are converted into private enterprises eligible for the six-month additional payment provided to those who leave?
  • Holding
    •        Paragraph 2 of Article 8 of the Act Governing the Conversion of State Owned Enterprises into Private Enterprises applies to those employees that do not transfer with the conversion from state owned enterprises into private ones, whereas Paragraph 3 of the same article applies to those who do transfer.  As provided in the first half of Paragraph 3, Paragraph 2 is only applicable to the settling of accounts for years of service for those remain with the enterprises when the state owned enterprises are converted into private ones. Considering the provision of the whole statute, the additional six-month payment, which is provided for in Paragraph 2, is not applicable to those who remain with the enterprises, so as to give equitable treatment to those who do not remain.
      
  • Reasoning
    •        This interpretation is in response to the Letter (82) T.Y.I. No. 2317 of July 5, 1993, a petition for unified interpretation filed by the Legislative Yuan.
      
    •        According to Paragraph 2 of Article 8 of the Act Governing the Conversion of State Owned Enterprises into Private Enterprises, “Those who are not willing to transfer after the conversion from state owned enterprises into private ones shall leave; the severance payments shall be in accordance to the Labor Standards Act, regardless of age or years of service; and six months’ additional payment with another month’s advance-notice salary shall be paid.  Those who were not eligible under the Labor Standards Act shall be eligible in this case.”  The above provision is for those employees who do not transfer when the state owned enterprises are converted to private ones.  Paragraph 3, which states, “The original enterprises shall settle accounts for years of service on the day of transfer for those who remain with the converted enterprises;  The settling of accounts shall be in accordance with what is provided in the previous paragraph, but without the advance-notice salary;  Those who are laid off within 5 years’ time from the conversion shall be entitled to the six-month additional payment with one month advance-notice salary and the best applicable severance payment based on their salary on the day of conversion”, is only applicable to those who remain with the enterprises when they are converted from state owned to private ones. The first half of this paragraph states that, “…shall settle accounts for years of service.  The settling of accounts shall be in accordance with what is provided in the previous paragraph (Paragraph 2)”, but not “…shall settle accounts for years of service with the additional payments.  The settling of accounts shall be in accordance with what is provided in the previous paragraph (Paragraph 2)”.  Moreover, the nature of the additional payment is different from that of the advance-notice salary. The previous is codified in Paragraph 3 of Article 16 of the Labor Standards Act whereas the latter is not.  The language of Paragraph 2, “the severance payment shall be in accordance with the Labor Standards Act, regardless of age or years of service”, clearly states that the remaining employees are not entitled to the advance-notice salary which is provided in the Labor Standards Act.  Paragraph 3 also clearly states, “but without the advance-notice salary”.  The additional payment is not and need not be included in the language of Paragraph 3, because it is not codified in the Labor Standards Act, thus there is no concern that the remaining employees will request it according to the Labor Standards Act.  Should those who remain, and are thus not entitled to the additional payment, be laid off within 5 years’ time, they then will be entitled to such payment, just as those who leave at conversion. Allowing those who remain to receive the six-month additional payment will simply encourage employees to remain and then leave within 5 years’ time, so as to receive double the additional payments.  This would create problems for the conversion of state owned enterprises into private ones, and is certainly not the purpose of the statute.  This interpretation is made concerning the language and the underlying theories of the statute. Therefore, it does not pertain to any legislative issues.
      
    • * Translated by Fan,Chien-Te.
      
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