Farmers hiring workers, beware of stepping on landmines: failing to follow the Labor Standards Act leads to a NT$300,000 claim! Tsai Pei-hui: This is not a single case; the Council of Agriculture and the Ministry of Labor should negotiate supporting
The agricultural labor shortage is severe. Some farmers follow the tradition of "mutual labor exchange" to find relatives and friends to help, or hire workers from outside. However, most farmers may not know that these common rural day-labor arrangements paid by the day all fall under the jurisdiction of the Labor Standards Act. Even if only one person is hired to help with harvesting for one day, employment insurance must be taken out, and if five or more helpers are hired at once, labor insurance is compulsory. But farmers usually do not realize they are "employers" and often unknowingly walk to the edge of breaking the law.
A case occurred recently: farmer Chang Hung-tien hired a helper, Mr. Hsiao, to manage his orchard short-term, but due to physical discomfort he underwent surgery, and then an infection caused by the surgery led to a one-year hospitalization. During that period he kept asking Mr. Hsiao to take care of the orchard, lasting about a year and a half in total. Unexpectedly, half a year after the employment ended, Hsiao filed a civil claim against him, demanding NT$300,000 in total for "severance pay and advance notice wages," "labor pension contributions," "unemployment benefits," and "occupational accident compensation" on the grounds that Chang had not enrolled him in labor insurance, health insurance, or employment insurance.
Chang Hung-tien was greatly shaken and petitioned the Ministry of Labor and the Council of Agriculture for an explanation, but the Ministry of Labor held that agriculture is governed by the Labor Standards Act, saying "just the fact that the employer did not create a worker roster or keep wage records is enough to impose a fine." The Council of Agriculture held that the competent authority for the Labor Standards Act is the Ministry of Labor, and that the Council can only remind farmers to avoid risks. Former legislator Tsai Pei-hui, who has long been involved in rural movements, said that the situation Chang Hung-tien faces is not a single case and has broad impact, and that the Ministry of Labor and the Council of Agriculture should jointly negotiate to seek long-term supporting measures that can resolve it.
"Paying by the day to help with farming" turns into a "labor dispute," and the farmer faces a NT$300,000 claim
Chang Hung-tien is now seventy years old. Even before retiring he had begun taking classes at an agricultural research and extension station, learning organic agriculture and natural farming. At age 60 he "gave up industry for farming," first growing pesticide-free sweet potatoes and also successfully growing wheat. Three years ago he turned the two-and-a-half-fen farm plot he inherited in his hometown of Zhongpu, Chiayi, into a passion fruit orchard.
In the spring of 2018, Chang Hung-tien was scheduled to undergo knee replacement surgery, estimated to take about several months including recovery, so he found Mr. Hsiao, who was registered as job-seeking, through the Chiayi employment service station to match labor, and the two agreed on day-rate pay for managing the orchard on his behalf. Unexpectedly, after surgery an infection of osteomyelitis occurred, beginning a long series of treatment and recovery. He was hospitalized for more than a year, and after discharge he still needed rehabilitation and to recuperate, during which he continued to employ Mr. Hsiao to care for the orchard.
But because his recovery did not go as expected, the doctor told Chang Hung-tien that his physical condition no longer allowed him to engage in agriculture. In June 2019, he proposed to Hsiao that they end the cooperation. Unexpectedly, at the end of the year, Hsiao filed a civil claim against him, demanding NT$300,000 in total for "severance pay and advance notice wages," "labor pension contributions," "unemployment benefits," and "occupational accident compensation" on the grounds that he had not been enrolled in labor insurance, health insurance, or employment insurance.
"Farming brings meager income; when short of labor, finding someone is like holding an unscheduled bomb?"
Suddenly becoming a defendant greatly surprised Chang Hung-tien. In his impression, farmers hiring workers, "hire someone to help today, be hired to work tomorrow," with day-rate pay, is a very ordinary thing, so why had a compensation lawsuit arisen? On one hand he made inquiries everywhere, and on the other he petitioned then-legislator Wu Kun-yu to request explanations from the Ministry of Labor and the Council of Agriculture.
On December 31 last year (2019), Wu Kun-yu, regarding Chang Hung-tien's petition case, invited the Council of Agriculture and the Ministry of Labor to hold a coordination meeting. When Chang Hung-tien heard a Ministry of Labor official mention that "once the Labor Standards Act applies, just the fact that the employer did not create a worker roster or keep wage records is enough to impose a fine," he simply could not believe it and burst into tears on the spot. He lamented the plight of farmers: "Farming brings meager agricultural income, finding someone when short of labor is already troublesome enough, and when you find someone you still have to hold an unscheduled bomb?"
Council of Agriculture: Amending the Labor Standards Act is highly difficult; recommends that those hiring workers find acquaintances, relatives, and friends to avoid disputes
Chiu Ting-hsiang, the Council of Agriculture case officer who attended the coordination meeting, explained: "The Council of Agriculture is not the competent authority for the Labor Standards Act, nor can it contradict the Labor Standards Act. Chang Hung-tien argues that this case should be exempt from the Labor Standards Act; that is not something the Council of Agriculture can decide."
Chiu added, "If there is a situation where the Labor Standards Act does not apply (for example, domestic caregivers are excluded from its scope), the Ministry of Labor will explain it by letter interpretation, but in this case the Ministry of Labor recommends that the employer negotiate with the worker; if they cannot reach a settlement, they can only let the court decide." In other words, the Ministry of Labor holds that this case cannot be excluded from an employment relationship.
Tsai Pei-chun, executive secretary of the Agricultural Labor Office under the Council of Agriculture's Counseling Division, said: "Amending the current Labor Standards Act is very difficult. It is recommended that farmers hiring workers try to rely on familiar relatives and friends to avoid disputes; or when hiring, both parties must agree on a contract-for-services relationship (outsourcing the work), avoiding any direction/subordination relationship, so as to avoid later labor disputes." For example, in the custom farming system, when the harvester comes and finishes harvesting, the farmer only receives the result and does not intervene in the process; the two parties have no direction/subordination relationship, so it counts as contract for services.
Farm households hiring workers step into a "gray zone of lawbreaking"
She frankly admitted that most farm households hire workers on a small scale. Although five or fewer people are exempt from compulsory labor insurance, regardless of the number of workdays, under labor laws there are still obligations to make labor pension contributions, compulsory employment insurance, and the risk of occupational accidents for the employed, and other gray zones of lawbreaking exist.
Facing the labor shortage problem and the risk of labor disputes from self-hiring, Tsai Pei-chun said the Council of Agriculture has already promoted a labor team system at farmers' associations around Taiwan, letting the farmers' associations act as the employer in the role of a dispatch company, so that farm households have workers to call on and are spared from taking on employer responsibility by hiring workers themselves.
Regarding the labor team plan proposed by the Council of Agriculture, actual inquiries with farmers' associations around Taiwan found that not all farmers' associations have set up agricultural technical teams, and the scale of labor and technical needs may not necessarily meet farmers' needs.
Lin Shun-ho, director-general of the Pingtung Hengchun Farmers' Association, said there are currently 40 agricultural technical team members, and the farmers' association is the nominal employer of the technical team, but in practice it is only responsible for matching. Farm households from various places register the number of workers needed for their projects, and the farmers' association uniformly dispatches them, with support extending across Manzhou, Checheng, and Fangshan. In practice it has not fully solved the labor shortage problem; after all, agriculture is seasonal work, and during the production season there is still competition for labor. The technical team members are not enough, and farmers still must hire workers themselves.
The agricultural technical team of the Liujiao Township Farmers' Association in Chiayi currently has 15 members, most of them young farmers who help each other out with mutual labor exchange. Director-general Chen Yu-hua believes that to solve the labor shortage problem, this scale is still far from sufficient. Especially now, during the busy cherry tomato season in Liujiao Township, workers are still hired independently. As for whether farm households have insurance, Chen Yu-hua said, "By custom, it's fine as long as everyone agrees; there is local mutual trust and tacit understanding."
Ministry of Labor: Hiring just one person to harvest for one day requires compulsory enrollment in "employment insurance"
Huang Wei-chen of the Ministry of Labor's Department of Labor Conditions and Employment Equality, who participated in the coordination meeting for Chang Hung-tien's petition case, said that since ROC year 73 agriculture, forestry, fishery, and animal husbandry have been covered by the Labor Standards Act, and the situation of a farmer hiring another farmer clearly falls within the scope of the Labor Standards Act.
Regarding the short-term helpers and seasonal hiring common in agriculture, Huang gave an example: "For help during the harvest period, if five or more people are hired short-term, labor insurance must be compulsorily taken out." Even if only one person is hired to help with harvesting for one day, "employment insurance" must be compulsorily taken out, and if an occupational accident unfortunately occurs, one must also bear compensation or indemnity liability.
Huang Wei-chen believes that in the past there has been no shortage of disputes over labor disputes arising from farmers hiring workers, and the Ministry of Labor can only persuade and mediate. If a labor dispute cannot be resolved through mediation, the Ministry of Labor's consistent position is to leave it to the court to decide.
Labor lawyer: The key in this case lies in "fixed-term contract" versus "indefinite-term contract," and employer liability differs greatly
Lawyer Liu Yen-tien, a labor law specialist at the Legal Aid Foundation, after reviewing the whole case, pointed out that the key in this case is that the two parties originally had a "short-term contract," but because Chang Hung-tien's hospitalization was extended and Chang did not express termination of the fixed-term contract, they automatically became a long-term, "indefinite-term contract worker" employment, giving rise to employer liability conferred by law.
The difference between fixed-term contracts and indefinite-term contracts is defined quite rigorously in Article 9 of the Labor Standards Act. Liu Yen-tien explained that when a fixed-term contract expires, the relationship between the two parties ends; however, once it is determined to be an "indefinite-term long-term employment relationship," employer obligations under the Labor Standards Act follow, including labor and health insurance, severance pay and advance notice wages, employment insurance (eligibility for unemployment benefits in cases of involuntary unemployment), and labor pension contributions.
Lawyer recommends farmers find third-party dispatch labor in which the third party acts as employer
"Simply put, the significance of the Labor Standards Act applying is that it legally establishes an employment relationship, and once employer liability is determined, it is very heavy. The Labor Standards Act treats workers as the weaker party protected by law, and because the employer also receives the profits, all risks and costs in the production process should be borne by the employer," he said.
He deeply sympathizes with farmers' risk of breaking the law. To avoid disadvantaged farmers bearing asymmetric employer liability, he suggests several approaches: First, if there is a long-term labor exchange relationship, they can organize their own labor service cooperative, and when workers are needed they call on the cooperative to dispatch them; members are both bosses and employees, and there is no significant employment relationship. Second, they can procure dispatch labor with a third party acting as employer, such as the farm masters and agricultural technical teams provided by farmers' associations, both of which are ways to protect small farm households from unintentionally incurring statutory employer liability.
Regarding the Council of Agriculture's suggestion to distribute labor through contract-for-services agreements, because new problems may arise, Liu Yen-tien remains reserved about it.
Farmers' groups: To protect farmers from the risk of breaking the law, ask the Council of Agriculture to establish supporting mechanisms at the policy level
Former legislator Tsai Pei-hui, who has long been involved in rural movements, said farmers have long had this tradition of mutual labor exchange and reciprocal work, and the Ministry of Labor and the Council of Agriculture must jointly negotiate to seek a supporting measure to resolve it. This is not a single case and has broad impact. But at this stage, she deeply sympathizes with the situation Mr. Chang Hung-tien faces and recommends finding a lawyer to discuss it properly.
Wu Tung-chieh, who has long followed agriculture and helped Chang Hung-tien convene the coordination meeting, said the difficulty Chang Hung-tien faces is a fairly common problem. The agricultural labor shortage is severe, and farmers hiring workers themselves will always encounter employer liability under the Labor Standards Act, leading to the risk of breaking the law; when facing labor dispute litigation, most can only resignedly choose settlement.
"The Council of Agriculture pushes the problem to the Ministry of Labor, the competent authority for the Labor Standards Act, but the Council of Agriculture is the competent authority for agriculture and must propose a policy measure. Otherwise, standing by with folded arms will leave farmers in the wrong, with vast numbers of farmers unknowingly at risk of breaking the law." Wu Tung-chieh suggested that occupational accident insurance within agricultural insurance should incorporate this kind of seasonal, temporary employment relationship, otherwise the problem will keep happening.
Farmer: I never thought insurance was needed when hiring short-term helpers, and in the countryside I wouldn't even know where to get insured?
Lin Mao-sheng, a farmer in Yunlin growing garlic, sweet potatoes, and potatoes, hires more than ten workers during the busy farming season. After hearing about Chang Hung-tien's case he found it unbelievable. He said that aside from farming his own land, during the busy season he has to hire people everywhere to help, and being able to find workers at all is something to be grateful for; he had never thought about the insurance issue, and believes labor regulations simply do not fit the reality of the countryside.
Su Jung-tsan, a farmer in Tainan growing miscellaneous grains, believes it is impossible not to hire workers during the busy farming season. To ask farmers to comply with the Labor Standards Act, they do not even know where to get insured? Labor laws protecting workers is a good thing, but agriculture is already a fragile industry on the verge of collapse. If labor laws excessively demand things of farmers, it will only kill the industry, or force farmers to break the law, ultimately leading to the collapse of agriculture.
Employee: Only after rights were harmed and dignity wounded did he angrily turn to the judicial route
The plaintiff, Mr. Hsiao, said that during more than a year of working for Chang Hung-tien he worked tirelessly and without complaint, but he fell while inspecting a water tower and injured his muscles and bones, and beekeeping in the orchard also led to him being stung by bees, yet Chang Hung-tien was indifferent and gave him no proper treatment. Only after being dismissed did he discover that his rights had been harmed because he had no insurance. He wanted to seek a private settlement, but Chang Hung-tien refused to settle. After his first lawsuit against Chang Hung-tien for "negligent injury" resulted in non-prosecution, Chang publicly disclosed his personal information online and made accusations, making him feel his dignity was insulted, which was why he turned to the judicial route for compensation.
Chang Hung-tien said that Hsiao only filed the lawsuit half a year after leaving the job, and that he had gone through a life-and-death ordeal in the hospital and was unable to attend to matters. He only heard about Hsiao's occupational accident after Hsiao left the job, and he does not agree with Hsiao's account.
Chang Hung-tien lamented that after retiring and returning to farming he had originally wanted to fulfill a dream. There are countless small farmers like him who hire helpers, and unintentionally stepping into a legal trap made him lose trust in people. Having "nowhere to voice his grievance" is very painful and helpless, and he hopes that through his own painful price he can call on agricultural authorities to establish supporting policies as soon as possible, so that more innocent farmers do not suffer disaster.