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  • Interpretation
  • No.643
  • Date
  • 2008/05/30
  • Issue
    • Is Article 45, Paragraph 2, of the Rules Governing Staff Members of Industrial and Commercial Organizations unconstitutional?
  • Holding
    •        The provision of Article 45, Paragraph 2, of the Rules Governing Staff Members of Industrial and Commercial Organizations that “the retirement pension referred to in the preceding paragraph shall be paid, depending on the financial capability of the organization, in a one-off amount equal to two-months salary of the staff member for every full year he was in service of the organization or an amount in pro rata for his service for less than one year; the maximum amount of such retirement pension is limited to an amount equal to his total salary for sixty months and is payable one-off only” is a guiding criteria of retirement pension established by the competent agency as allowable to staff members of such organizations for the purpose of strengthening the personnel structure of commercial organizations and maintaining the public interest. It does not go beyond the scope of power granted by Article 72 of the Commercial Organizations Act; nor does it impose any improper restriction on the property right or freedom of contract of the people to the extent of contradicting the purpose of Article 23 of the Constitution.
      
    •        Personnel management and financial operations of commercial organizations have to do with restrictions on the property right and freedom of contract of commercial organizations as well as the protection of the rights and interest of retired employees of such organizations. Because these are matters of importance to the right and obligation of the people, they should more appropriately be prescribed explicitly by law and the competent agency must conduct review and revision of the rules as early as practicable to bring into effect the purpose of safeguarding the people’s right as embodied in the Constitution.
      
  • Reasoning
    •        The people’s property rights and freedom of contract are protected by Articles 15 and 22 of the Constitution. Any restriction imposed by the State on such rights and freedom must be prescribed by law and the restriction must be conformable with the principle of proportionality in order to fulfill the purpose of Article 23 of the Constitution. Where the law grants the competent agency the authority to issue orders to supplement the law, the purpose, content and scope of the authority so granted must of course be clear and precise, and additionally the content of such orders may not go beyond the scope of the authority or contract the purpose thereof. Where the law grants a general power to issue orders, however, the issues whether the authority granted is clear and precise and whether the order has gone beyond the scope of the authority granted must be judged by taking into account the legislative purpose of the enabling law and the correlated meanings of the provisions as a whole rather than sticking rigidly to the text of the provisions. This has been repeatedly explicated in our previous interpretations.
      
    •        The criteria on payment of retirement pension to employees of commercial organizations were laid down by the Rules Governing Staff Members of Industrial and Commercial Organizations established by the Ministry of the Interior, the central competent agency charged with the power to supervise over all commercial organizations, on April 25, 1974 and amended on June 4, 1980, when the Commercial Organizations Act had incorporated in it no provision enabling the competent agency to establish such rules. The Rules were functional orders established by the Ministry of the Interior to protect the interest of retired employees of commercial organizations. Thereafter, the Commercial Organizations Act as amended on December 15, 1982 provided in Article 72 that: “Rules governing personnel management and financial operations of commercial organizations will be established by the central competent agency.” Consequently, the Rules were amended by the Ministry of the Interior on June 29, 1990 (hereinafter called “Rules in dispute”), with the result that the part of the Rules in dispute with respect to commercial organizations has now become legally enabled upon addition of Article 72 to the Commercial Organizations Act.
      
    •        As set forth in Article 1 of the Commercial Organizations Act, the objectives of commercial organizations include promoting domestic and foreign trade, accelerating economic development, harmonizing the relationship of persons of the same trade, and increasing the common interest of the trade. The functions of commercial organizations are enumerated by Article 5 of the Act to include a total of thirteen categories in connection with the investigation, statistics, research and development of domestic and international commerce in the generalized areas of economy, politics, social conditions and education, showing clearly the strong public welfare characteristics of commercial organizations. In light of the fact that staff of commercial organizations are the persons actually taking charge of the business of the organizations as assigned by the organizations, their faculty and service efficiency concern greatly the effective fulfillment of the functions of the organizations. To ensure the accomplishment of the aims of commercial organizations, Article 72 of the Commercial Organizations Act enables the competent agency to establish rules to govern the personnel management and financial operation of commercial organizations. The purpose of such enabling appears to be proper.
      
    •        While Article 72 of the Commercial Organizations Act grants the central competent agency only the general power to establish rules to govern the personnel management and financial operation of commercial organizations, without prescribing specifically whether the substance of personnel management and financial operation includes payment of retirement pension, the protection of the retirement benefits of the staff of such organizations should be deemed to be one of the components of the personnel management and financial operation rules established by the central competent agency by virtue of the power granted under the aforesaid article because the payment of retirement pension is not only a part of the management of the staff of commercial organizations but is also closely related with the financial operation of the organizations. Furthermore, we have noted that when the Commercial Organizations Act was being amended in 1982, the legislative body had in mind the lack of legal basis for the abovementioned criteria established by the Ministry of the Interior on payment of retirement pension to employees of commercial organizations and had thus resolved upon the addition of Article 72 to the Act for the purpose of protecting the retirement benefits of the staff of commercial organizations to upgrade the faculty and service efficiency of such organizations and to make such criteria legally enabled. Hence the payment of retirement pension to staff of commercial organizations is a matter within the scope of authority granted by said article.
      
    •        The Rules at issue provide specifically in Article 45, Paragraphs 1 and 2, with respect to the payment of retirement pension: “The retirement of staff members shall be handled in the manner prescribed below and the retiring staff shall be given a one-off retirement pension: 1. A staff member who has attained the age of sixty-five shall retire; and 2. A staff member who has worked for the organization for 25 years or more or has worked for 15 years or more and attained the age of sixty may apply for retirement;” and “The retirement pension referred to in the preceding paragraph shall be paid, depending on the financial capability of the organization, in a one-off amount equal to two-months salary of the staff member for every full year he was in service of the organization or an amount in pro rata for his service for less than one year; the maximum amount of such retirement pension is limited to an amount equal to his total salary for sixty months and is payable one-off only.” While the provisions impose restraints on the property rights and freedom of contract of commercial organizations, they are properly intended to safeguard the livelihood and maintenance of employees of such organizations after retirement so that the employees may work comfortably and whole-heartedly and that the organizations may thus recruit excellent staff members and strengthen their personnel structure with the aim of upgrading the faculty and service efficiency of the staff to the extent of helping the fulfillment of the missions of commercial organizations. Furthermore, where the criteria on the retirement pension set forth in the employment regulations of a commercial organization are lower than the criteria laid down by Article 45, Paragraph 2, of the Rules at issue, the competent agency, in deciding whether or not to approve such employment regulations, must of course take into account the financial conditions of the organization so as to avoid the situation where the organization is financially incapable of paying the pension, and where the criteria on the retirement pension set forth in the employment regulations of a commercial organization have been approved by the competent agency, the organization must of course pay pension to retired staff members in line with such criteria. Thus, the financial capability of commercial organizations having been taken into consideration by Article 45, Paragraph 2, of the Rules at issue, the Rules and the paragraphs thereof are indeed guideline provisions without imposing unreasonable restraint on the property right and freedom of contract of commercial organizations or going beyond the degree of necessity. The provisions are not contradictory to the purpose of safeguarding the property right of the people as contemplated by Article 23 and Article 15 of the Constitution. 
      
    •        Personnel management and financial operations of commercial organizations have to do with restrictions on the property right and freedom of contract of commercial organizations as well as the protection of the rights and interest of retired employees of such organizations. Because these are matters of importance to the right and obligation of the people, they should more appropriately be prescribed explicitly by law and the competent agency must conduct review and revision of the rules as early as practicable to bring into effect the purpose of safeguarding the people’s right as embodied in the Constitution.
      
    •        With respect to petitioner’s further assertion that the irrevocable final judgment is contrary to Article 15 and Article 23 of the Constitution in applying Article 174-1 of the Administrative Procedure Act, it is found that statement made by the petitioner gives rise to the issue whether or not the court has erred in facts and law in such judgment rather than challenging the constitutionality of Article 174-1 of the Administrative Procedure Act. This part of the petition is found to be non-conformable with the requirement of the Constitutional Interpretation Procedure Act, Article 5, Paragraph 1, Subparagraph 2, and must therefore be dismissed in accordance with Paragraph 3 of the same article.
      
    • *Translated by Raymond T. Chu.
      
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