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Validity of penalty clauses for breaking contract

Work Permits, Employment Qualifications, Employer Problems
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Postby brian » 26 Nov 2006, 19:43

dablindfrog wrote: in this case,there are no penalties in my contract


So if there is no statement of penalty for breach in your contract then you better fill me in again on what exactly you have been penalized and how? If there is no penalty clause in your contract then I can't see any reason that you could not get this money back by appealing to the labor board. You would very likely win this one and you wouldn't be the first to get a win against an employer who has acted inappropriately.

dablindfrog wrote: where do you draw a line?if they asked me my past 10 months salary back,would this be ok?


If you signed an employment contract that stated that if you breached you agree to pay back all the money that you had earned up to that point then I can't see any legal reason that the school could not enforce their rights to collect that money. I am not saying that it is ethical for them to include such a large penalty, but then you should never have agreed to it in the first place.

I think that a lot of people overlook the fact that a written contract is an easily enoforceable legal agreement. It cannot force you to do something against the law, but provided that it is within the law then it is binding which is why you should read and understand any contract carefully before you sign. Far too many people gloss over the details and just sign up to get the job, only to turn around and complain when the school actually enforces the terms of that contract.

In regards to your ten month back payment example above, I would be quietly confident that you could have that one overruled as being unreasonable, but even if you did then you would still need to negotiate a penalty payment which would probably end up being in the order of two or three months.
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Postby Chef David » 27 Nov 2006, 08:25

brian wrote:
So if there is no statement of penalty for breach in your contract then you better fill me in again on what exactly you have been penalized and how?


well,my contract was for 1 year
apart from a 2 month notice period in order to terminate the contract,there is nothing else mentioned (certainly no penalty)

I left after 10 months,and they argue that they will keep my salary for the 10th and last month because i didn't follow procedure.

I'm not sure if it's wise to post the contract on here,they might complain about breech of confidentiality.

how do i contact the labor board please?
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Postby london-boy » 27 Nov 2006, 09:08

brian wrote:Far too many people gloss over the details and just sign up to get the job, only to turn around and complain when the school actually enforces the terms of that contract.


I suppose people just forget they are in Taiwan. In the UK, for example, employment law (and consumer law) together with "unfair contract terms" type rules often overrides what is written in a contract. So people have become lazy...
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Postby chrysegle » 22 Dec 2006, 05:56

I definitely recommend that anyone who has a legal problem associated with their work seeks out some of the free professional advice available. I spoke with 2 lawyers employed by Taipei City Hall and one of the sessions I had was arranged by the Dept of Labor there. Another useful source of informed legal advice, albeit not professional, can be gained from Tai-Da University's law school which runs sessions where the public can get a team of law students to consider their legal problems.

The advice I received from the DoL-arranged lawyer was that the employer has to pay the final wage and then demand any breach of contract costs from the employee. There is also a limit to how long an employer can delay this payment. If the employee refuses to pay any breach of contract costs, the employer may decide to sue for them. However, the employer cannot just fine an arbitrary amount or even whatever is actually specified in the contract - it all has to be justifiable as damage incurred from the breach of contract and the onus is on the employer to prove it in the case that they sue. Contracts are not a law unto themselves in Taiwan signed or no, and any stipulations that seem unfair, seek the advice of a Taiwan legal professional to check their likely status if it came to court.

Now that was in 2004 and my case was I was working as an English teacher. For a chef, I'm not sure and you would be best seeking advice only from a professional. If you are outside of Taiwan, you would be best getting a friend to ask on your behalf at the DoL what you can do from overseas. As you lost a whole month of wages, probably it wouldn't hurt to find out what your options are in terms of representation.

In my case, the Dept of Labor set up a dispute mediation meeting. These are designed primarily to help disputing employers and employees avoid the courts and I was very impressed with this service, not least because it was free. I should mention that I could speak some Chinese and it was recommended that I also bring a Taiwanese friend along to help with language problems.

I met with my former employers and a mediator from the DoL staff at Taipei City Hall. Both sides were encouraged from the outset to seek a compromise acceptable to both in order to avoid going to court.

The discussion began with me telling my former employer that the deadline that I had set for them to pay me my final wages (as I say, seek proper legal advice for legal procedures) had passed and they needed to pay it. They replied, we will when you agree to pay the penalties as stipulated in the contract. The DoL representative then pointed out that according to the basic labor law my employers had to pay me my final wages first and then seek any penalties. My former employers then suggested they would sue me for the penalties if I did not agree to them at this meeting. Neither myself nor my employers would have been happy to go to court at that point, so we then discussed the alleged penalties one by one, examining them to see if they were reasonable damages that had come from the breach of contract (my leaving the workplace). (For example, one such stipulation representing the bulk of my final wages that was deemed to be unreasonable was that I would have to pay for a teacher to be flown from overseas). The end result was that they dropped all the penalties in exchange for the recuperation of training costs - about a fifth of my final wages. By this time, we had been in heated discussions for over an hour and this seemed to be a face-saving conclusion for both sides and we shook hands on this.

As I say, the only advice I'd be happy giving in Taiwan legal matters is not to look for precedents but to instead patiently seek out the free expert advice available.
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Postby Chef David » 23 Dec 2006, 10:25

can anyone tell me if there is any ways to contact DoL online?

chrysegle,your post was really great,I think this whole thing should be a sticky.
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“If you want to get together in any exclusive situation and have people love you, fine - but to hang all this desperate sociology on the idea of The Cloud-Guy who has The Big Book, who knows if you’ve been bad or good - and cares about any of it - to hang it all on that, folks, is the chimpanzee part of the brain working.” Frank Zappa, 1989
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Postby brian » 29 Dec 2006, 20:25

Nice post chrysegle and good to hear a personal experience that shows that we do have rights here and that these are enforced if we take the time to ensure that they get enforced.

Also your experiences with the lawyer seem to reinforce what Blackadder was told by his lawyer, so I am certainly at odds with them in this regard. I am not a lawyer and nor am I pretending to be so I do respect what those lawyers have said. Although I am a great believer in the word of the law as being the point of last resort, I also believe that what goes on in practice is also important in judging how one should proceed in their dealings in Taiwan.

chrysegle wrote: The advice I received from the DoL-arranged lawyer was that the employer has to pay the final wage and then demand any breach of contract costs from the employee.


I agree that this is a valid interpretation of the law, but I also believe that there is an equally valid legal argument to the contrary. For me it all hinges on the phrase 'advance deduction'. Does that mean in advance of payment as the lawyer in your case believed it to mean, or does it mean in advance of breach (i.e. deposits and bonds which we all know are illegal).

I think that both of the above could be reasonably argued, and rather than go back and forth on the issue, I personally prefer to look at the situation logically.

If you sign a contract that stipulates a penalty payment should you breach the contract then you should expect to pay that money if you indeed breach - whether the employer withholds it or sues you for it. If you don't agree to that condition then don't sign that contract and then you won't need to worry.

I really believe that this is the only way to avoid the trouble of arguing with your employer about who is right and who is wrong.

chrysegle wrote: However, the employer cannot just fine an arbitrary amount or even whatever is actually specified in the contract - it all has to be justifiable as damage incurred from the breach of contract and the onus is on the employer to prove it in the case that they sue.


Again, while I acknowledge that this is valuable and 'correct' information coming from a legal professional, I don't agree with this from a logical and practical point of view.

Were an employer to include a penalty for the 10 month pay back on a twelve month contract as suggested by an earlier poster then that would likely be deemed unreasonable. The fact is that most schools have a penalty amount that ranges from two weeks to two months pay. I very much doubt that this would be considered unreasonable on a one year contract. As such, although it is theoretically possible to attempt to argue the pennies, I believe that most arbitration would uphold the penalty amount that is contained in most of the employment contracts used by schools in Taiwan.

Contact information for the Council of Labor Affairs (CLA) can be found here.
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Postby snowy » 05 Apr 2007, 12:45

Could anyone please provide further input on an earlier posting in this thread?

It raises an interesting question however. In the case of teachers you are blacklisted from ever getting a work permit to teach again, but does that affect your ability to get any work permit or only a work permit to teach? Likewise is a chef banned from being a chef in Taiwan ever again but allowed to obtain other work permits.


Thanks
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Postby Toasty » 05 Apr 2007, 13:53

I have some experience with the steal your salary ploy attempted by many employers here and I'll relate my experiences in this thread.

As many of you know, I left Taiwan for personal reasons a while back. My employer at the time was aware of my circumstances and seemed alright with my impending departure, however sudden. In fact, they seemed sympathetic. Sympathetic until, a few days later, I asked about receiving the salary for the hours I'd worked that month. Then, they completely changed, becoming evasive and saying I needed to speak to so and so and she's busy. I knew what was going on.

I reported the school first to the foreign affairs division of the local police, who called the school to ask what's up. The officer then called me back to inform me that the school is indeed planning not to pay me and had told him as much. He then referred me to a case worker in the labour department, but before we ended the conversation, he gave me his contact details and informed me he would be willing to testify in any hearing regarding what he had heard from the school. I thanked the officer and was transfered to the labour department worker. I recounted my predicament yet again and the case worker phoned the school.

This time the case worker told me the school was prepared to pay me the next morning. Next morning came and I went to the school. As expected, they didn't pay, instead the manager let loose a hail of insults. I silently left and called back the case worker to let her know what had transpired. She told me that the school had no choice but to pay me, but that they've requested a meeting. This was a stall tactic, because the meeting would take place after my intended departure (and the school knew this-- the meeting is a formality they can request. It essentially consists of the school being informed of the law and being told to pay up).

At that point, I thought the school had won. I wasn't going to cancel my itinerary. I thought the salary was going to have to be a write-off. However, the very helpful caseworker advised me that I could send her a proxy statement authorizing her to act on my behalf and the meeting would still be held. She seemed to feel strongly that the school should not be allowed to get away with what they were doing. She also promised to report the incident to the ministry in Taipei (which may affect their chances of being able to employ foreigners in future). I sent her the statement as requested and I received all monies owed by international transfer shortly after the meeting took place after I had left the country.

Moral? Jack and Jill English school can write whatever crap they want in their employment contracts-- and indeed many write all kinds of creative rip-off clauses. These contracts do not over-ride the law here. If you are being faced with the theft of your salary, regardless of what your rinky-dink contract says, don't simply accept it. There are resources and people here to assist you--and they're rather good at what they do. Fight and you'll win.
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Postby brian » 11 Apr 2007, 22:33

Stimpy good to hear that you had a win. Posts such as yours are really important as they really are the best way for foreign teachers to assert their rights here and show employers that they need to treat us honestly.

Out of curiosity did your contract have a contract breach clause? Was the amount of money that the school withheld the same as this breach clause amount?
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Postby MotorcycleRider » 19 May 2007, 13:40

Warning: Partial rant

So in of this, is there any real protection for the employer? We often hear the case where schools screw the teacher, but it must be noted that quite often the opposite happens. It happened just today. I hired this, what seemed like a nice honest person. My school and I spend severals days, and many man hours training her, and helping her adjust to life in Taiwan, and even providing free housing for her. Just this morning she tells me she's found a better job, and that's it. I feel a bit betrayed and used. After all doing this, we get a thanks for the training and help, but f*ck you later. She hasn't started teaching any classes yet, but our school invested a lot of time and money into brining her here. Is there anything we can do? Are there any measures to prevent these bad applicants from screwing honest schools?
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