The petitioner, the fourth division of the Taipei High Administrative Court, in hearing its case 103-Su-224 (2014) regarding the Indigenous Peoples Employment Rights Protection Act, found that the plaintiff [winning tenderer] must pay a substitute fee in the amount of NT$2,949,712 according to Article 24, Paragraph 2 of the Indigenous Peoples Employment Rights Protection Act (hereinafter referred to as the disputed provision), but the procurement amount is only NT$1,640,000. Therefore, the petitioner doubted whether the disputed provision to be applied in the trial violates the property rights safeguarded by Article 15 of the Constitution and the proportionality principle stipulated in Article 23 of the Constitution. Hence it decided to suspend the litigation proceedings and request a constitutional interpretation on January 12, 2016.
The petition is reviewed and found to be in accordance with the requirements for a constitutional interpretation outlined in Interpretation Nos. 371, 572, and 590 of this Court. We therefore accept it and render this interpretation based on the following reasons:
Article 15 of the Constitution providing for the protection of people’s property rights aims to ensure that individuals can according to existing property status exercise their freedom of use, enjoyment, and disposition, free from infringement by public power or third parties (refer to Interpretation Nos. 709, 770, and 771 of this Court). When lawmakers impose substitute fee obligations on people for not or not completely performing their legal obligations, it constitutes a restriction on people’s property rights. Therefore, the restriction must comply with requirements of the principle of proportionality in Article 23 of the Constitution.
According to the Government Procurement Act, winning tenderers who do not employ a certain percentage of indigenous people as required by law are required to pay substitute fees. If that amount exceeds the government procurement amount, there should be appropriate mechanisms to reduce the burden (refer to Interpretation No. 719 of this Court), to prevent the duty of paying substitute fees from being disproportionate in specific cases where the substitute fee exceeds the procurement amount, resulting in disproportionate consequences due to serious infringement of people's property rights. The failure of lawmakers to provide proper adjustment mechanisms in this regard restricts people's property rights protected by Article 15 of the Constitution, apparently inconsistent with and in violation of the principle of proportionality in Article 23 of the Constitution.
According to Article 12, Paragraph 1 of the Indigenous Peoples Employment Rights Protection Act: "Companies winning bids according to the Government Procurement Act with more than one hundred domestic employees shall hire indigenous people during the term of contract performance, with the total number of indigenous people accounting for no less than one percent (1%) of the total number of staff thereof." Paragraph 3 of the same Article states: "In the event that the winning tenderer fails to hire enough indigenous people based on the standard stipulated in Section 1, it shall pay substitute fees [make cash payment] to the employment fund of the Indigenous Peoples Comprehensive Development Fund." Additionally, according to Article 24, Paragraph 2 of the same law, the disputed provision stipulates that “…Section 3 of Article 12 shall be calculated based on the monthly minimum wage multiplied by the difference in the number of people." Based on this, a contractor who wins a bid in accordance with the Government Procurement Act and whose total number of domestic employees exceeds 100 should employ a certain proportion of indigenous people during the performance period. If they fail to employ sufficient indigenous people, they shall be obligated to pay substitute fees and the amount shall be calculated in accordance with the disputed provision.
This Court finds that the provisions of Article 12, Paragraph 1 and 3 of the Indigenous Peoples Employment Rights Protection Act do not contravene the principle of equality under Article 7 and the principle of proportionality under Article 23 of the Constitution, and are consistent with the purpose of protecting property rights and business freedom encompassed in the right to work, as guaranteed in Article 15 of the Constitution. It has been established by Interpretation No. 719 of this Court.
This Court then finds that the disputed provision calculates the substitute fee by multiplying the number of indigenous people not employed by the wining tenderer in accordance with the relevant law by the monthly minimum wage. The purpose is to encourage the winning tenderer to hire indigenous people (refer to the letter from the Council of Indigenous Peoples dated October 11, 2016, explanations two and four), which is legitimate and the means adopted also help to achieve this purpose.
However, the disputed provision regarding the method of calculating the amount of substitute fee is always based on the difference in the number of people multiplied by the monthly minimum wage without considering whether circumstances are attributable to the winning tenderer and whether the size of the procurement amount is big or small. As a result, the amount of the substitute fee payable might exceed the procurement amount, so that the winning tenderer needs extra assets in addition to the procurement amount to pay the substitute fee in apparent disproportion to the procurement amount. This exceeds the scope of reasonable burden for the people. In this regard, Interpretation No. 719 of this Court, Paragraph 6 of the reasoning already explained that the relevant authority should promptly review and improve the situation where the amount of the substitute fee exceeds the government procurement amount, but the lawmakers have yet to revise it.
In conclusion, [this Court deems that] the disputed provision calculates the amount of substitute fees in a uniform manner, which in certain special circumstances may fail to take into account substantive justice. In particular, when the calculated amount of substitute fees to be paid exceeds the procurement amount, it may lead to a situation of obviously excessive severity, resulting in disproportionate consequences due to serious infringement of people's property rights. The lawmakers have not established appropriate adjustment mechanisms in this regard. Within this scope, the disputed provision restricts people's property rights protected by Article 15 of the Constitution, apparently inconsistent with and violating the principle of proportionality set forth in Article 23 of the Constitution. The relevant authorities shall make the necessary revisions in accordance with this interpretation within two years from the date of publication of this interpretation. Until the revision is completed, relevant authorities and courts shall handle cases of obviously excessive severity in accordance with the spirit of this interpretation.
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*Translated by Chuan-Ju CHENG