How To Draft A Valid Non-competition Clause And Transfer Clause In The Employment Contract?

Taiwan's Labor Standrad Law provides the minimun standards of protection in terms of the workding conditions and other benefits for appliable employees.

The Legislative Yuan of Taiwan passed the bill of amendment on the Labor Standard Law (the "Amendment") on November 26, 2015

The Amendment regulates two major issues: (i) non-competition clause, and (ii) principles of transfer.

Non-competition Clause

The Amendment stipulates that the non-competition clause must be in a written contract and the non-competition period must not exceed two years.

In addition, the non-competition clause is not valid if such clause does not in compliance of the following conditions:

1. the employer does not have proper interest in its business that is worthy of protection;

2. the employee is accessible to the trade secret owned by the employer;

3. the scope of restriction on time period, territory and activities must pass the reasonableness test;

4. reasonable compensation must provided to the restricted employee and any remuneration received during the employment shall not be regarded as part of such compensation;

Principles of Transfer

The Amendment stipulates that transferring the employee from one work place to another must abide the following principles:

1. necessity for business need;

2. not in breach of the employment contract;

3. no adverse impact on salary or other terms and conditions of the employment;

4. employee is capable of performing the newly assigned duties; and

5. taking the employee and his/her family's interest into consideration and necessary assistance shall be provided.