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Practical Trends in Comfirming the Existence of Employment Relationship Litigation to Order Temporary Status Quo Injunction
I. The order of temporary status quo injuction under Article 49 of the Labor Incident Act is a special law of Article 538 of the Code of Civil Procedure.
(1) In the past practice of comfirming the existence of employment relationship, unless an employee obtains a temporary status quo injunction in accordance with the Provisonal Remedies Proceeding of the Code of Civil Procedure and provides a security deposit for its enforcement, it is difficult for the employee to claim for continuous employment and payment of wages from the employer during the litigation. In addition, Paragraph 1, Article 538 of the Code of Civil Procedure states: "Where necessary for purposes of preventing material harm or imminent danger or other similar circumstances," but in terms of whether an employment relationship exists, that is, whether it is lawful to teminate a labor contract, there are only questions of whether an employee can request resuming the origianl position, payment of compensation or damages after a judgment is in favor of the employer in a lawsuit; there is no need for an order of temporary status quo with regard to the legal relation in dispute for purposes of preventing material harm or other similar circumstances. Therefore, past practice had often used the aforementioned reasons to deny the necessity of provisional remedy of order of a temporary status quo injunction during the lawsuit filed by the employee to confirm the employer's termination of employment (refer to the Intent of Supreme Court Civil Judgment Tai-Kang-Zi-92, 1999). Unless an employee has lost wages due to dismissal and results in imminent danger of family poverty and being unable to make a living, it may be possible to request for order of temporary status quo injunction when filing the lawsuit. For other situations, such as unable to continue to accumulate research results and to increase professional knowledge due to the loss of "employee status" by dismissal, which resulted in being out of practice on the work skills, the loss of insurance benefits due to their employee status, the fired or transferred employees unable to enter the union located within the enterprise to perform union tasks, which results in a leaderless union and the suspension of union affairs, etc, it is difficult to claim that there is "material harm or imminent danger or other similar circumstances" that it is necessary for prvisional remedy of the continuous employment in the light of the previous provisions of the provisional remendy of civil action.[1]
(2) In light of the above situation, commentators have repeatedly argued that employees are unable to receive wages to support their livelihood during the litigation, which creates litigation obstacles for employees and makes it difficult to effectively remedy employees' rights and interests. Therefore, in response to the above-mentioned issues, the Labor Incident Act, which was enacted and promulgated in 2018, stipulates in Article 49 regarding the order of temporary status quo injunction: "If the court recognizes that the case for confirming the existence of an employment relationship, as initiated by the employee, has a chance to prevail, and that the employer has no major difficulties in continuously employing the employee, the court may order a temporary status quo injunction, based on the employee's motion, for continuous employment and payment of wages. If the court of first instance delivers a judgment recognizing the existence of an employment relationship, court shall make a disposition in favor of the employee's motion as presented in the preceding paragraph. The court shall exempt the motions, as described in the preceding two paragraphs, from the requirement of a security deposit. If the court revokes a ruling, as mentioned in Paragraph 1 and Paragraph 2, due to the employee losing judgment and the judgment is finalized, the court may, on the employer's motion, order the employee to return the paid wages within the scope of revocation, and the added interest since the date of the employee receiving the wages. However, this provision does not apply if the employee has provided labor services pursuant to the ruling, as stipulated in Paragraph 1 and Paragraph 2. The ruling ordering the return of paid wages may be appealed, and the execution of the ruling should be suspended during the appeal process." In addition, the legislative reasons of Paragraph 1, Article 49 of the Labor Incident Act states: "Employees in labor incidents usually are in strong need to continue working to maintain their livelihood. Based on this characteristic, during the course of the litigation to confirm the existence of the employment relationship, if the court recognizes that the employee has a considerable chance of winning the case (for example: the legality of the employer's termination is in doubt, etc.), and the employer has no major difficulties in continuously employing the employee. It is advisable to follow the provisional remedies for temporary rights protection, and Paragraph 1, Article 49 of the Labor Incident Act is established. In addition, this paragraph is a special provision that takes into account the characteristics of labor relations, and is in nature a materialization of the requirements of legal relationship in dispute and necessity stipulated in Paragraph 1, Article 538 of the Code of Civil Procedure, so that employees may request the court for an order of temporary status quo injunction when the reasons stipulated in this paragraph are present. As to whether to approve and order the continuous employment and payment of wages, the court shall exercise its discretion in light of the specific circumstances of the case, taking into account the employee's chance of winning the case and whether to expect objectively the benefits of continuous employment by the employer." That is to say, this article is a special provision of Article 538 of the Code of Civil Procedure, which not only simplifies the requirements, but also provides in Paragraph 3 of the same article that the court may order a temporary status quo injunction for the exemption of security deposit. In practice, the operation of obtaining an order of temporary status quo injunction under this provision has led to a number of noteworthy developments and has had a significant impact on the disposition of labor dispute of confirming the existence of employment relationship.
II. Labors' requests for order of temporary status quo injunction under Article 49 of the Labor Incident Act are easily granted.
(1) Labors request for orders of temporary status quo injunction in the first instance:
1. As indicated in the preceding legislative reasons, Paragraph 1, Article 49 of the Labor Incident Act defines the order of temporary status quo injunction as a special provision of Paragraph 1, Article 538 of the Code of Civil Procedure, which stipulates that: "Where necessary for purposes of preventing material harm or imminent danger or other similar circumstances, an application may be made for an injunction maintaining a temporary status quo with regard to the legal relation in dispute." Moreover, it is clearly stated that the nature of Paragraph 1, Article 49 of the Labor Incident Act: "If the court recognizes that the case for confirming the existence of an employment relationship, as initiated by the employee, has a chance to prevail, and that the employer has no major difficulties in continuously employing the employee, the court may order a temporary status quo injunction, based on the employee's motion, for continuous employment and payment of wages" Paragraph 1, Article 49 of the Labor Incident Actis a materialization of the requirements of legal relationship and necessity in dispute as stipulated in Paragraph 1, Article 538 of the Code of Civil Procedure. Therefore, with regard to the order of the temporary status quo injunction of confirming the existence of employment relationship litigation, in practice, it is almost no longer necessary to review the requirement of "where necessary for purposes of preventing material harm or imminent danger or other similar circumstances" listed in the Code of Civil Procedure. Usually only two requirements are considered: (1) the employee in this case has a chance to prevail and (2) the employer has no major difficulties in continuously employing the employee. However, there are still some judgments based on the legislative reasons that reveal that "employees usually are in strong need to continue working to maintain their livelihood" and it is believed that "whether employees have the resources to maintain their basic needs" should also be considered at the same time. In addition, there are also a few rulings that consider "whether the employee's loss of employment affects the realization of the employees' self-personality" as an additional requirement.
2. Since the order of temporary status quo injunction is an injunctive procedure, the practice is that the aforementioned requirements only need to reach the level of explanation, and the application trend of the Labor Incident Act is that the aforementioned requirements are leniently recognized. Therefore, at present, once an employee files for confirming the existence of employment relationship and requests for an order of temporary status quo injunction in accordance with the Labor Incident Act. The court is highly probable to approve the motion, and according to the statistics of scholars[2], the percentage is increasing gradually:
A. The employee in the case has a chance to prevail: most practical opinions directly recognize that the employee in the case has a chance to prevail. In practice, there are only a few cases where the employee's claim for an order of temporary status quo injunction is rejected based on the fact that this requirement is not fulfilled. For example, the employee has already notified the company of the intention to terminate the employment contract, so there is no doubt about the legality of the termination of the the employment contract (refer to Taiwan High Court Civil Ruling Tai-Kang-Zi-37, 2024) or the employee had lost the case in both the first and second instances and there was not indicated that the employee in the case has a chance to prevail (refer to Taiwan High Court Tainan Branch Court Civil Ruling Lao-Chung-Zi-1, 2023).
B. The employer has no major difficulties in continuously employing the employee: unless the employee has committed improper conduct ( infringement of trade secrets or expression of refusal to obey the employer's direction and supervision, etc.), this practice is mostly based on the employer's normal operations and the need for talent acquisition (Taiwan High Court Civil Ruling Lao-Kung-Gen-1-Zi-1, 2024), or the employer suffers less harm than the employee from the order of temporary status quo injunction (Taiwan High Court Tainan Branch Court Civil Ruling Lao-Kung-Zi-12, 2021). Therefore, in practice, the recognization of this requirement is lenient.
C. Consideration of employees’ financial strength (for example: whether they have the funds to maintain basic living needs): This is not a requirement stipulated in the literal meaning of the provision but is listed in the explanation of the legislative reasons. Therefore, in practice, it is only adopted in some rulings, and the judgment standards are also different. When discussing the aforementioned requirement "the employer has no major difficulties in continuously employing the employee," some rulings will measure the interests of the employee's financial strength against the employer's capital or business income; however, some rulings will only judge the employee's financial strength independently.
D. Whether the employee's loss of employment affects the realization of the employees' self-personality: This is also not a requirement stipulated in the literal meaning of the provision, but there seems to be a tendency to increase the number of discussions in practice. For example: "The litigation may not be determined in the short term. As the litigation progresses, the Appellant's realization of self-personality and economic life through work will certainly be affected. In comparison, the opposite party who continues to employ the Appellant before the litigation is ended or determined, though has the inconvenience of adjusting the position and paying temporary wages to the Appellant, but is able to be compensated by the labor sevices received, and the disadvantage suffered should be much less than the damages caused by the Appellant's claim for labor services. "(eg, Taiwan High Court Civil Ruling Lao-Kung-Gen-1-Zi-3, 2020), "The regulatory purpose of Article 49 of the Labor Incident Act not only temporarily meets the urgent needs of employees in life, but also allows employees to continue working to maintain their professional skills and competitiveness, which involves the protection of employees' right to work and personality rights. It is not simply about satisfying employees' claim in this case with monetary payments. Therefore, the dispositon made by the court in accordance with the above provisions leaves no room for the employer to waive or revoke the disposition after providing a counter-security deposit" (Supreme Court Civil Ruling Tai-Kung-Zi-673, 2021).
(2) The employee only applied for the order of temporary status quo injunction at the second instance:
1. Paragraph 2, Article 49 of the Labor Incident Act stipulated that: "If the court of first instance delivers a judgment recognizing the existence of an employment relationship, court shall make a disposition in favor of the employee's motion as presented in the preceding paragraph." The legislative reasons reveals that: "For the claims in Paragraph 1, if the court of first instance delivers a judgment recognizing the existence of an employment relationship, and if the employee fails to make a claim for the preceding paragraph in the first instance, the court of second instance shall, in accordance with the employee's motion, order a temporary status quo injunction for the preceding paragraph, therefore, the Paragraph 2 is stipulated."
2. In practice, it is widely recognized that Paragraph 2, Article 49 of the Labor Incident Act is a special provision for the requirements of legal relationship in dispute and necessity as stipulated in Paragraph 1, Article 538 of the Code of Civil Procedure. Since the first instance has been judged in favor of the employees (including full or partial prevail), it can be considered that the employee has a chance of prevail is with high probability beyond the reasonable doubt, and it is sufficient to recognize the necessity of temporary protection of their rights. Therefore, the employer should not have any obvious obstacles to employment or risk of significant damage, and the court does not need to consider the requirement whether the employee can maintain the basic living needs (e.g., Supreme Court Civil Ruling Tai-Kung-Zi-673, 2021 and Taiwan High Court Civil Ruling Lao-Kung-Gen-Zi-1, 2024).
3. The legal effect of the order of temporary status quo injunction under Article 49 of the Labor Incident Act
(1) The employee is exempted from the requirement of providing security deposit when applying for the order of temporary status quo injunction, and, in practice, it is believed that the employer is unable to waive or revoke the disposition due to provide a counter-security deposit.
A. Paragraph 3, Article 49 of the Labor Incident Act stipulated that: "The court shall exempt the motions, as described in the preceding two paragraphs, from the requirement of a security." From this, it can be seen that regarding the order of temporaty state quo injunction from the first and second instances for the claim for confirming the existence of employment relationship, the court may exempt the employee from the requirement of providing security deposit. Since most employees are economically disadvantaged, in practice, the court often rule to exempt the employee from the requirement of providing security deposit.
B. In addition, the Supreme Court Ruling Tai-Kung-Zi-673,2021, further revealed that the regulatory purpose of Article 49 of the Labor Incident Act not only temporarily fulfills the urgent living needs of employees, but also allows employees to continue working to maintain their professional skills and competitiveness, which involves the protection of their right to work and personality rights. It is not simply about satisfying employees' claim in this case with monetary payments. Therefore, the dispositon made by the court in accordance with the above provisions leaves no room for the employer to waive or revoke the disposition after providing a counter-security deposit.
(2) In the past, it was considered in practice that only the payment of wages was required to be made in the case of an order of temporary status quo injunciton for confirming the existence of employment relationship. However, in the rulings currently covered by Paragraph 1, Article 49 of the Labor Incident Act, most of the practices consider that, in addition to the payment of wages, the employer has the obligation to continue to employ the employees.
A. Before the Labor Incident Act was enacted and promulgated, though there were few civil rulings that granted the order of temporary status quo injunction in accordance with the Code of Civil Procedure, the actual enforcement of the law was mostly based on the fact that it is sufficient for the employer to pay employees wages. In addition, since the right to requesting working of labors is not supported by the prevailing opinions in practice in Taiwan, it is mostly believed that there is no need to allow employees to actually return to their original positions.
B. However, as the awareness of protecting labor rights and interests has risen in recent years, Paragraph 1, Article 49 of the Labor Incident Act explicitly stipulates that the order of temporary status quo injunction includes the continuous employment and the payment of wages, and, as mentioned above, a number of rulings have also pointed out that the employees' provision of labor services is not only for obtaining wages but also for realization of self-personality. Therefore, the prvailing practical opinion in recent years is that besides continuous payment of wages, employers need to continue to employ the employees and to allow the employees to return to their original positions. In this regard, if the employer fails to allow the employees to return to their origianl positions, the employee may apply to the court to enforce the employer's continous employment. If the employer still fails to comply with the court's enforcement order, the enforcement court may impose default surcharge on the employer.
C. Furthermore, according to Paragraph 4, Article 49 of the Labor Incident Act, if the employee receives a losing judgment, the employer may request the employees to return the paid wages they received during the period of the order of temporary status quo injunction and the added interest since the date of receiving the wages. However, if the employee does provide labor services to the employer during the order of temporary status quo injunction period, the employer cannot request employees to return the paid wages.
4. The order of temporary status quo injunction under Article 49 of the Labor Incident Act, which is arising from the litigation to confirm the existence of employment relationship, has obviously placed more emphasis on the protection of labor rights and interests than the previous temporary status quo injunction based on the Code of Civil Procedure, regardless of the court's criteria for recognition, the discretion of the security deposit, and the actual enforcement of the law. It is worth further observing the impact on the practice of labor litigation in Taiwan and the balance between employers' and employees' rights and interests.
[1] Wu, Tzu-hui, Observation of Practical Operations of Temporary Status Quo Injunction Order for Continuous Employment in Taiwan: Discussion on Regulations Governing Motions of Continuous Employment in Germany, 65 Tunghai University Law Review, 23, 40-41, (2023) .
[2] Id. at 49-52.