Note: 
These summaries constitute no part of the Judgments but are prepared only for readers' reference by the Department of Clerks for the Constitutional Court.
Original paragraph numbers that the summarized texts correspond to are put into lenticular brackets after each paragraph. 
In case of any conflict of meaning between the Traditional Chinese version and the translated English version, the Traditional Chinese version shall prevail.

Headnotes

    The Taiwan Constitutional Court (TCC) applied intermediate scrutiny and upheld the constitutionality of Article 2, Subparagraph 2 of the Recalculation and Clawback of Retirement Payments for Civil Servants with Combined Tenure from Certain Non-State Organizations Act (hereinafter the "Act"), finding no violation of the principle of equality to single out certain non-state organizations for clawbacks (claw-back). 

    The TCC applied rational basis review and ruled Article 4, Paragraph 1 and Article 5, Paragraph 1, Subparagraph 1 of the Act constitutional, finding no disproportionate restriction on the right to property to request certain retired civil servants to return overpaid retirement payments (including pensions and subsequent gains from the civil servant preferential interest rate). The TCC also noted that these civil servants cannot claim the protection of legitimate expectations (Vertrauensschutz) because the overpayment resulted from illegitimate policies. 

    The TCC applied rational basis review and ruled Article 5, Paragraph 1, Subparagraphs 1 and 2 of the Act constitutional, finding no violation of the principle of  lex retro non agit (non-retrospective effect of law)and the protection of legitimate expectations (Vertrauensschutz) for requesting the concerned organizations to repay (either solely or jointly and severally with the recipients) the overpaid pensions. 

    The TCC upheld the constitutionality of Article 7 of the Act, finding no violation of the principle of legal stability under the rule of law (Rechtsstaat). The TCC pointed out that excluding the existing statutes of limitations for clawbacks in the Act is necessary for realizing transitional justice.

Background Notes

Historical Background (Rearranged from parts of the reasoning for better understanding)

    Taiwan received the legal system of the Republic of China (ROC) after World War II and underwent two years of political tutelage with Kuomintang (KMT, the Nationalist Party) leading the state^[1]. Taiwan entered the constitutional period after the promulgation of the Constitution on December 25, 1947. However, following the implementation of the Martial Law (May 10, 1948) and the Temporary Provisions Effective During the Period of National Mobilization for Suppression of the Communist Rebellion (May 20, 1949), the single-party state political system was prolonged de facto. It was not until after the end of the Martial Law era (July 15, 1987) and the end of the Period of National Mobilization for Suppression of the Communist Rebellion (May 1, 1991) that the State gradually shifted into a liberal democratic constitutional order. 【42】

    During the party-state era, the ruling party KMT carried out its policies and the volition of its leaders by setting up affiliations within government agencies. To ensure KMT's grip, party members who held offices as heads of ministry or the five Yuans may be asked to attend KMT Central Reform Committee meetings. In this respect, KMT's decisions could avoid the supervision of the separation of five powers under the Constitution, thus enabling its political leadership. 【44】

    In the aspect of social movements, the KMT developed various non-state organizations to tone down its presence while promoting its propaganda, recruiting new members, and enlarging its supporters. The KMT placed efforts in training and making use of the cadres in these affiliated organizations to mobilize the civil society toward its goals. 【45】

    It can be seen that the KMT ensured its comprehensive single-party rule and the party-state system through party members within the government and the cadres within affiliated organizations. On that account, facilitating exchanges between said two types of personnel became an important party policy and practice to strengthen its authoritarian rule. To further this policy, the KMT took advantage of its political leadership and government resources.【46】

    One of the influences of this policy was the perversion of tenure calculation in the civil service. The government has established the civil service pension since 1943, which only applies to certified staff within the civil service. The Judicial Yuan also issued several interpretations since 1952 emphasizing that as parties are non-state organizations after the end of political tutelage, those who hold party positions are not civil servants. However, through its influence in the Ministry of National Defense, the KMT pushed for the civil servants' past tenure at the China Youth National Salvation Corps (CYC, a KMT-affiliated organization) to be included in the calculation of civil service tenure in 1969. The Examination Yuan approved this request, which later opened a gateway for various KMT-affiliated organizations to include their former employees' tenure in the calculation of qualifying years for civil servant pension. Relevant letters, directives, or standards were issued by the Examination Yuan from 1970 to 1983. 【46】

    After the Martial Law was lifted, the Examination Yuan decided not to include civil servants’ periods of employment in non-state organizations when enrolling or approving civil servant's retirement. However, the decision was not retroactive. Those who entered the civil service before December 2, 1987, and applied for retirement before April 20, 2006, were not affected. 【49】

    To implement transitional justice and to rectify said unjust status, the Legislative Yuan passed the Recalculation and Clawback of Retirement Payments for Civil Servants with Combined Tenure from Certain Non-State Organizations Act^[2] (hereinafter "the Act") on April 25, 2017. The Act was promulgated and implemented on May 10, 2017. 【50】

Case History

    Eight petitioners in this case were either judges from Administrative Litigation Panels of District Courts or panels of judges from the Taipei High Administrative Court. When hearing cases concerning the disputed provisions, the petitioners were convinced that Article 2, Paragraph 2; Article 4, Paragraph 1, Article 5, Paragraph 5, Subparagraphs 1 and 2; Article 7 of the Act have violated the principle of lex retro non agit, the protection of legitimate expectations, the principle of equality, thus consequently infringed the people's right to property under the Constitution. Their original court cases all concerned retired civil servants or non-state organizations who were ordered to return overpaid pensions under the Act. 

    The petitions were consolidated and later argued on December 20, 2022. Relevant parties including the Ministry of Civil Service (of Examination Yuan), the KMT, and the CYC gave their statements during the oral argument.
 

Summary of the Judgment 

Holding (Summary)

1. Article 2, Subparagraph 2 of the Recalculation and Clawback of Retirement Payments for Civil Servants with Combined Tenure from Certain Non-State Organizations Act^[3] (hereinafter, "Provision I") does not violate the equality principle under Article 7 of the Constitution.
2. The parts where retired political appointees are required to return jointly and severally (with the designated organizations) their overpaid retirement payments under Article 4, Paragraph 1^[4] and Article 5, Paragraph 1, Subparagraph 1 of the Act^[5] (hereinafter, "Provision II" and "Provision III") are not in contravention with the protection of property rights, the principle of lex retro non agit, and the protection of legitimate expectations (Vertrauensschutz) under the Constitution. 
3. The parts where the designated organizations are required to return certain overpaid retirement payments (jointly and severally for the retired political appointees, in full for retired non-political appointees) under Provision III and Article 5, Paragraph 1, Subparagraph 2 of the Act^[6] (hereinafter, "Provision IV") are not in contravention with the protection of property rights, the principle oflex retro non agit, and the protection of legitimate expectations (Vertrauensschutz) under the Constitution.
4. Article 7 of the Act^[7] is not in contravention of the requirement of the principle of legal stability under the rule of law (Rechtsstaat).

Reasoning

1. In terms of Part 1 of the Holding:

    The Act affects certain non-state organizations and civil servants previously working at these organizations, thus constituting a special law. However, this Act is stipulated to realize transitional justice, rectify the illegal status caused by the party-state system, and set the democratized State back on the track of constitutionalism. The Act re-evaluated previous actions of the State as illegal in order to strengthen the liberal democratic constitutional order and to prevent the State from recoiling back to authoritarian rule. The purpose of this Act is of especially important public interest (Please refer to Paragraph 39 of the Reasoning of J.Y. Interpretation No.793). 【60-62】

    The organizations listed in Provision I (hereinafter the "Provision I Organizations") were those permitted by the Examination Yuan for their previous employees to combine periods of employment at the organizations with their civil service tenure. This classification is substantively related to its purpose, which is to rectify past illegitimate policies and reinstate the legal framework of civil service pensions (for retirements, resignations, and military discharges).【62】

    In CYC’s case, although it was subordinate to the Ministry of National Defense from October 31, 1952, to December 23, 1969, this status had no legal basis in the Ministry's organization law. The Executive Yuan also pointed out expressly that the CYC is a non-state organization instead of an administrative organization. The fact that the Examination Yuan agreed past periods of employment at the CYC to be included in the calculation of civil service tenure further supports that CYC personnel were not certified staff within the civil service. Consequently, the two periods of employment at the CYC and the civil service should not be combined. Provision I's inclusion of the CYC does not violate the equality principle.【64-65】

2. In terms of Part 2 of the Holding: 

    Discounting certain periods of employment directly reduces a civil servant’s pension and subsequently the amount eligible for preferential interest rates (together as "retirement payments"). Provision III requested retired political appointees to return jointly and severally (with Provision I Organizations) their overpaid retirement payments. These two measures (discounting and returning) amount to restrictions on civil servants' or political appointees' right to property. 【68】

    Provision II confirmed the illegality of including periods of employment in Provision I Organizations into civil service tenure. For this illegality, subsequent clawback for retired political appointees is stipulated in Provision III. These two provisions are retroactive laws (ex post facto laws). 【72】

    The Constitution does not prohibit retroactive laws (in this case, the Act) if it was for the purpose of transitional justice, which is of especially important public interest. The relevant standards and letters were majorly flawed as they violated superior regulations. Those retirees who have benefited from the flawed standards and letters may not claim the protection of legitimate expectations.【73-75】

    In terms of Provision II and III's proportionality, for the reason that the pre-1995 civil service pension plan was solely sponsored by the government and that the preferential interests are supported by governmental tax income, the legislature shall have larger legislative discretion when it comes to adjusting retirement payments (Rational basis review). Viewing from Article 1 of the Act, said provisions are of legitimate purpose and their measures are reasonably related to its purpose. 【78-79】

    Considering that the civil servants applying the Act are too old or unable to re-enter the civil service, the legislators have set up special retirement payment recalculation formulas to cushion the impact (Article 4, Paragraphs 2 and 3 of the Act). The affected retirees may also apply for installment plans for their clawbacks in cases of major financial loss. 【80-81】

    To conclude, the parts where retired political appointees are required to return jointly and severally (with Provision I Organizations) their overpaid retirement payments under Provisions II and III are not in contravention with the protection of property rights, the principle of lex retro non agit, and the protection of legitimate expectations (Vertrauensschutz) under the Constitution.【82】

3. In terms of Part 3 of the Holding:

    Provisions III and IV imposed the joint and several liabilities of returning the overpaid retirement payments on Provision I Organizations. This is Provision I Organizations, as employers, should have paid relevant civil servants' pensions for their period of service at the organization.【86】

    Provision I Organizations such as the KMT, CYC, the Free China Relief Association (FCRA, the present "Chinese Association for Relief and Ensuing Services"), and Central News Agency, etc., have taken advantage of the illegal Examination Yuan letters/standards and stipulated in their internal rules to pass on their pension payment responsibilities to the State. It is sufficient to say that they have unjustly benefited from this scheme. Although Provision I Organizations were not actual recipients of the overpaid retirement payment, the joint and several return and clawback framework of Provision III is still considered rationally related (to the legislative purpose), and so is the framework of Provision IV. 【87-88, 90】

    The period of employment for employees in Provision I Organizations ended when they entered the civil service. The government stopped combining tenures for these personnel since December 2, 1987. However, nearly 30 years have passed since then until the implementation of the Act on May 10, 2017. Under Article 125 of the Civil Code, the statute of limitations should have expired for claiming clawbacks against Provision I Organizations if not stipulated otherwise. Therefore, Provisions III and IV are designed to be retroactive. 【91】

    The purpose of the Act is to reinstate the legal order in civil service pensions and pursue transitional justice. These are especially important public interest. Combining civil servants' periods of employment in Provision I Organizations with civil service tenure was an illegal policy under the party-state system. Given that Provision I Organizations actively requested to apply this scheme after CYC's case, they were all collaborators in compromising the civil service pensions and should not deserve the protection of legitimate expectations. Provision I Organizations were subjectively aware of the illegality involved and have objectively benefited from it. Making them liable to return the clawback under Provisions III and IV are means rationally related to the aforementioned purpose. 【93】

4. In terms of Part 4 of the Holding:

    The institution of the statute of limitations is to finalize legal relations sooner in order to maintain the stability of legal order. Legal relations and rights finalized by statutes of limitations should be protected by relevant fundamental rights under the Constitution. This is required by the principle of legal stability under the rule of law (Rechtsstaat principle). However, it is not prohibited by the Constitution for legislators to exclude the application of the statute of limitations if they were to pursue an especially important public interest and excluding the statute of limitations is the essential way to reach their purpose. 【96】

    The Act aims at realizing transitional justice, which is of especially important public interest under the Constitution. When States try to implement transitional justice after democratization, they are most commonly faced with the obstacles posed by the statutes of limitations. Although the second Legislative Yuan was elected in 1992, the ruling party during the authoritarian era (KMT) still held the majority for a long time, hence it is difficult to re-evaluate and rectify relevant unjust enrichments at the early stage of democratization. It was not until the ninth Legislative Yuan in 2016 that the KMT first lost majority, and subsequently paved the way for legislatures of transitional justice. In view of the specific historical background of the Country’s gradual democratization, it would be hard to realize transitional justice through law without special regulations on the statute of limitations.【97】

    The ratio legis of Provision V has stated that it was designed to avoid relevant claims (under Articles 4 and 5 of the Act) from being time-barred. Given the historical factors and the purpose of the Act, Provision V is necessary and does not violate the principle of legal stability under the rule of law (Rechtsstaat principle).【98】

[1] Please refer to Articles 30, 31, 32, 72 and 85 of the Provisional Constitution for the Period of Political Tutelage of the Republic of China.

[2] [公職人員年資併社團專職人員年資計發退離給與處理條例]. This Act has no official English translation. This name was translated by the translator of this summary for the readers to better understand. 

[3] Article 2, Subparagraph 2 of the Act: "The terms in this Act are defined as follows: (…) (2) Full-time employees of (non-state) organizations: Which means full-time employees of all level of branches of the Kuomintang Party, the ROC Public Service Association and its branches, the China Youth National Salvation Corps, the General Association of the Scouts of China, Free China Relief Association, the Republic of China Chapter of the World Anti-Communist League, the Republic of China Chapter of the Asian Peoples' Anti-Communist League, the Grand Alliance for China's Reunification under the Three Principles of the People, etc." (This Act has no official English translation. This provision was translated by the translator of this summary for the readers to better understand.)

[4] Article 4, Paragraph 1 of the Act: "For Civil servants stipulated in Article 2 who still receive pensions, the paying agencies shall discount their periods of full-time employment in the non-state organizations, and recalculate their retirement payments per the legal standards and paying methods that they should have applied under." (This Act has no official English translation. This provision was translated by the translator of this summary for the readers to better understand.)

[5] Article 5, Paragraph 1, Subparagraphs 1 and 2 of the Act: "After recalculating retirement payment per the previous Article, should there be an overpayment, the paying agencies shall order the recipients or the non-state organizations whose period of employment of its full-time employers were counted to return the overpayment within one year after the implementation of this Act in accordance with the following regulations: (1) For retired political appointees: the recipient and the non-state organization (where the recipient's previous period of employment was counted) shall return the overpayment jointly and severally; (2) For retired/resigned/discharged non-politically appointed civil servants: the non-state organization (where the recipient's previous period of employment was counted) shall return the overpayment." (This Act has no official English translation. This provision was translated by the translator of this summary for the readers to better understand.)

[6] Please refer to the previous note. 

[7] Article 7 of the Act: "Existing statutes of limitations do not apply to the rules on recalculating retirement payment in Article 4 and that of clawbacks in Article 5 unless stipulated otherwise in the Act." (This Act has no official English translation. This provision was translated by the translator of this summary for the readers to better understand.)