Differences from the previous law
Article 54 of the LSA stipulates that an employer shall not force an employee to retire unless the employee "has reached the age of 65" or "is physically or mentally incapable of performing his/her job." The legislative purpose of this Article is to protect an employee's right to remain employed until they reach the age of 65.
The current amendment to the law makes it an explicit rule for employers and employees to negotiate the extension of the mandatory retirement age, encouraging employers with manpower needs and workers who hope to continue to work to negotiate not only the extension of the retirement age but also the adjustment of work content and salary based on the physical and mental state of the employee. For example, the parties may negotiate that after the employee turns 65, the employee will work only three days a week and the employee's salary will be adjusted proportionally as a result of the reduction of working hours.
After the amendment becomes effective, will employers still be able to compel employees aged 65 or above to retire?
Employers can still force employees to retire when they reach the age of 65 after the amendment becomes effective. Note that this amendment does not change the mandatory requirement of reaching the age of 65. In fact, there is no significant change to the rights and obligations of both employers and employees.
The amendment simply adds wording that "the mandatory retirement age may be extended by mutual agreement between the employer and the employee through negotiation". The use of the word "may" in the legal language means that negotiation is not mandatory. If no consensus can be reached after negotiation, the employer can still force the employee to retire.
As a matter of fact, before the amendment, it was already possible to postpone retirement through negotiation. This is because Article 54 of the LSA only provides employers with a right to force an employee aged 65 to retire. Employers are entitled not to exercise this right and continue to employ the senior employee. However, given that some employers have mistakenly thought that it is illegal to retain employees who have reached the age of 65, the amendment contains explicit language referring to a retirement age extension through negotiation. This helps to avoid any misunderstanding and provides the parties with clear guidance when dealing with retirement.
The Middle-Aged and Elderly Employment Promotion Act prohibits employment discrimination against middle-aged and older employees
Article 12 of the Middle-Aged and Elderly Employment Promotion Act stipulates that "employers shall not treat middle-aged and older employees differently on the basis of age when they seek employment or are employed." Here, differential treatment includes differences with respect to salary or employee benefits. Therefore, once the employer and employee have agreed to extend the retirement age, the employer cannot require the employee to retain their original job on a reduced salary; or reduce the employee's salary and benefits on the basis of the employee's age. To do so will expose the employer to liability of a fine between NTD 300,000 (approximately USD 10,000) and NTD 1,500,000 (approximately USD 50,000). Further, the labor authority has the ability to publicly announce the name of the company and the name of the company's responsible person.
The purpose of this amendment is to clarify potential misunderstanding about the mandatory retirement regulation and encourage older workers to continue to devote themselves to work, thereby alleviating labor shortage issues. Together with the Middle-Aged and Elderly Employment Promotion Act, the legislator hopes to create a friendly work environment without age discrimination.
