TheConstitutional Court rendered the judgment 112-Xian-Pan-Zi No. 7 on May 19, 2023(a case on establishing factory/site corporate labor unions) holds thatParagraphs 1 & 2 of Article 2 of the Enforcement Rules of Labor Union Act violatethe principle of legal reservation in Article 23 of the Constitution, and shallbecome invalid later after two years from the pronouncement of the judgment.

I.Fact of the case

（I）Paragraphs 1 & 2 of Article 2 of theEnforcement Rules of Labor Union Act respectively provide, “Factories and sitesreferred to in Subparagraph 1, Paragraph 1 to Article 6 of the Act are thoseworkplaces with independent personnel, budget and accounting systems, and areentitled to apply for factory, business or commerce registration according torelated statutes.” “The independent personnel, budget and accounting systemsreferred to in the preceding paragraph shall meet the following requirements: 1.The right to hire and dismiss workers of the workplace. 2. Planning andexecuting its own budget. 3. Establishing its own accounting unit and accountto calculate its gains, losses, and deficits.”

（II）There are two applicants in this case. One is thecorporate labor union of the maintenance division of China Airlines, another isthe corporate labor union of the Shalu factory of the Aerospace IndustrialDevelopment Corporation (AIDC). Both applied to their local governments forfactory/site corporate labor union registration, and received the respectiveapprovals from Taoyuan City Government and Taichung City Government. However,both China Airlines and AIDC already had corporate labor unions established inthe company, i.e., the China Airlines Corporate Union and the AIDC CorporateUnion, who then expressed their objections as stakeholders by each filing anadministrative complaint to the Ministry of Labor. The Ministry of Labordecided that neither the maintenance division of China Airlines nor the Shalufactory of AIDC were factories having the three elements of independentpersonnel management, independent budgeting, and independent accounting, andhence could not establish their own factory/site corporate labor unions. The corporatelabor unions of the maintenance division of China Airlines and the Shalufactory of AIDC believed that Paragraphs 1 & 2 of Article 2 of theEnforcement Rules of Labor Union Act were suspect of conflicting with theConstitution and filed for a constitutional review.

II.Holdings of the Constitutional Court

（I）The formation of labor unions represents acommon will and the freedom of association, which fall within the scope ofprotection of the right of association under Article 14 of the Constitution. Thestrictness of the requirements for the formation of labor unions relates towhether workers are free to form labor unions. Any intervention with the rightof association of workers should in compliance with the principle of legal reservationand the principle of proportionality as required by Article 23 of theConstitution.

（II）Paragraphs 1 & 2 of Article 2 of theEnforcement Rules of Labor Union Act violate the principle of legal reservationas provided in Article 23 of the Constitution, and shall become invalid later aftertwo years from the pronouncement of the judgment:

1.According to the labor union system asprovided in the current Labor Union Act, a “corporate union” means a laborunion organized by employees of the same factory or workplace, of the samebusiness entity, of enterprises with controlling and subordinate relationshipbetween each other in accordance with the Company Act, or of a financialholding company and its subsidiaries in accordance with the Financial HoldingCompany Act, and the number of corporate union of the same scope so organizedshall be no more than one. (Subparagraph 1 of Paragraph 1 of Article 6 andParagraph 1 of Article 9 of the Labor Union Act)

2.On the other hand, Paragraphs 1 & 2 ofArticle 2 of the Enforcement Rules of Labor Union Act provide definition andrequirements for the aforementioned term “factory and workplace.” They areimportant provisions regarding whether workers may form labor unions, which isan intervention with the workers’ right of association, and hence should bebased on the law or explicitly authorized by the law.

3. However, the concept of the same factory orworkplace has not been defined by the Labor Union Act, and the Labor Union Act doesnot specifically provide authorization to a specific competent authority either.The Enforcement Rules of the Labor Union Act are only formulated based on thegeneral authorization provisions in Article 48 of the Labor Union Act. Hence, inthe absence of explicit authorization from the law, the competent authority’s formulationof regulations with respect to the definition and requirements of a corporatelabor union of a factory or workplace in Paragraphs 1 & 2 of Article 2 ofthe Enforcement Rules of the Labor Union Act violate the principle of legal reservationand such provisions shall become invalid later after two years from thepronouncement of the judgment.

（III)Paragraphs 1 & 2 of Article 2 of theEnforcement Rules of the Labor Union Act are not in conflict with the principleof proportionality of Article 23 of the Constitution; however, legislators andrelevant authorities should still pay attention to the purpose of protectingthe right of association of workers:

1. The formation of corporate labor unionsinvolves the balance of the interests of employees, employers, and the public. Legislators have greater legislative discretion.Therefore, when conductinga review for the principle of proportionality, the purpose must be justifiedand there must be a reasonable correlation between the means and the purpose.

2. The purposes of using a factory or a site asthe smallest unit for the formation of corporate labor unions is to prevent laborunions from being too fragmented and unable to aggregate their strength, and tofacilitate reciprocal negotiations between unions and employers, the signing ofcollective agreements, and the enhancement of the labor rights of union members.Such purposes are justified. The purpose of Paragraphs 1 and 2 of Article 2 ofthe Enforcement Rules of the Labor Union Act providing the requirements forworkers forming factory or site corporate labor unions is to avoid theproliferation of small labor unions within the same company, which may lead toinability to conduct collective negotiations with the employer and result in competitionsamong laborers. There is a reasonable connection between the means and the end,and therefore Paragraphs 1 & 2 of Article 2 of the Enforcement Rules of theLabor Union Act are not in conflict with the principle of proportionality ofArticle 23 of the Constitution.

3. However, at the end, the Constitutional Courtespecially stated that, although Paragraphs 1 & 2 of Article 2 of theEnforcement Rules of the Labor Union Act are no violation of the principle ofproportionality, legislators, when formulating relevant provisions, shouldavoid imposing excessively stringent restrictions on the requirements for the formingof labor unions on the grounds of protecting the collective interests ofworkers. Relevant authorities, when amending the Enforcement Rules of the LaborUnion Act, should also properly review and improve the provisions, so as to bein line with the constitutional protection of the right of association of workers.

III. Conclusion

Based on this Constitutional judgment, theLegislative Yuan and the Ministry of Labor need to review and amend the LaborUnion Act and the Enforcement Rules of the Labor Union Act within two years. Howwill the law and policy change then? Will the substance of the amended lawremain the same as the existing provisions? Or will there be some adjustmentsto the amended provisions? Since it involves the issue of the formation ofmultiple labor unions within a company, employers should pay special attentionto it in the future. In addition, we would like to point out that, if there aremultiple labor unions in a company, the employer should maintain a neutralattitude towards each union, recognize and respect the exercise of the right ofsolidarity of each labor union on an equal footing, and should not arbitrarilytreat one of the labor unions in a particularly favorable manner, in order toavoid constituting improper labor practices.

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