With respect to labor rights and compliance thereto, listed companies should bear greater social responsibilities than their non-listed counterparts.  In consideration of this principle, the Ministry of Labor is collaborating with the Taiwan Stock Exchange Corporation and the Taipei Exchange to examine new IPO applications. In accordance with "Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings" and "Taipei Exchange Rules Governing the Review of Securities for Trading on the TPEx,” the examination will cover new applicants’ compliance with labor laws within the past three years.

Article 83 of the Labor Standards Act requires companies to hold labor-management meetings.  In the past, local labor administrations reviewed compliance with conducting legally-required labor-management meetings; these local labor administrations review whether companies submitted attendance rosters as required by law.  To facilitate enforcement of Article 83, the Financial Supervisory Commission and the Ministry of Labor decided that, starting January 1, 2019, first time IPO applicants shall submit: 1) "photocopies of labor-management meeting records (including meeting notices and attendance signature sheets)," and 2) "roster of labor-management meeting representatives (including reference letters)," to the Ministry of Labor before submitting their applications to the Taiwan Stock Exchange Corporation or the Taipei Exchange.  Within 3 months from receiving a receipt letter from the Ministry of Labor, the applicant company shall attach the receipt letter to its application and submit them to the Taiwan Exchange Corporation or the Taipei Exchange for examination.

The new examination method will be implemented on January 1, 2019, and the number of required labor-management meetings will increase monthly, through several phases:

1.Phase 1: From January 1 to the end of March, 2019, the applicant company shall attach relevant records for at least one labor-management meeting held in compliance with the law within three months prior to the application date (exclusive of special meetings).

2.Phase 2: From April 1 to the end of June, 2019, the applicant company shall attach relevant records for at least two labor-management meetings in the six-month period prior to the application, one for each three-month period held in compliance with the law (exclusive of special meetings).  

3.Phase 3: From July 1 to the end of September, 2019, the applicant company shall attach relevant records for at least three labor-management meetings in the nine-month period prior to the application, one for each three-month period held in compliance with the law (exclusive of special meetings).

4.Phase 4: From October 1 onward, the applicant company shall attach relevant records for at least four labor-management meetings in the twelve-month period prior to the application, one for each three-month period held in compliance with the law (exclusive of special meetings).

Note: Calculation for the above periods is based on the date of the applicant campany’s submission of labor-management meeting documents to the Ministry of Labor.

(Author: Sherry Wu; currently an associate of Formosan Brothers, Attorneys-at-Law.)

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