Taiwan - When A Lawsuit Is Brought To Set Aside An Administrative Disposition.
Legal News & Analysis - Asia Pacific - Taiwan - Dispute Resolution
13 April 2021
The Taipei High Administrative Court rendered the 109-Jian-Shang-75 Decision of October 30, 2020 (hereinafter, the “Decision”), holding that when a lawsuit is brought to set aside an administrative disposition, if the preliminary question involves the legality of another administrative disposition which has not been invalided, the administrative court basically cannot deny the validity of such administrative disposition.
According to the facts underlying this Decision, the Appellant was a contractor for a procurement project of Fine Arts Museum X and sent workers to provide services to Fine Arts Museum X. However, since the Appellant failed to apply for the contribution to the labor pension for Worker A and 16 other workers during their employment pursuant to applicable requirements and also to rectify within the period requested by the Appellee (i.e., the Labor Insurance Bureau of the Ministry of Labor), the Appellee penalized the Appellant at different times for its violation of Article 18 of the Labor Pension Statute in accordance with Article 49 of the statute. Later, a disposition was rendered again to impose a fine of NT$30,000 on the Appellant (hereinafter, the “Original Disposition”) for its failure to rectify. Dissatisfied, the Appellant filed an administrative appeal, which was rejected, with the Executive Yuan and brought an administrative action, which was dismissed by the Taipei District Court (hereinafter, the “Original Trial Court”), before appealing.
According to the Decision, once an administrative disposition is rendered, its contents are binding to the respondent, interested parties and the agency rendering the disposition, and such binding effect exists with the existence of the administrative disposition. In principle, other administrative agencies and courts can only consider the administrative disposition as a fait accompli when dealing with other cases and use it as the basis for their own actions and decisions. This is the so-called constitutive (factual) effect of an administrative disposition. Although the law stipulates that an administrative court has the right to review the legality of an administrative disposition, still this is only limited to the administrative disposition that is the subject of the review. Therefore, if the preliminary question involves the legality of another administrative disposition in the proceedings for the revocation of an administrative disposition, and such other administrative disposition has not been revoked or invalidated in accordance with the statutory procedures or for other grounds, the administrative court, in principle, cannot deny the validity of the disposition based on the constitutive (factual) effect.
In addition, according to the Decision, the Appellant was requested by the Appellee to rectify within a stated period for failure to contribute to the pension of A and other workers during their employment pursuant to applicable requirements and was subsequently fined by the Appellee for failure to rectify within the period in violation of Article 49 of the Labor Pension Statute (thereinafter, the “First Disposition”).
Dissatisfied, the Appellant filed an administrative appeal, which was rejected by the Ministry of Labor via a decision on the administrative appeal, and a complaint, which was dismissed by the Shihlin District Court and finally dismissed by the Taipei High Administrative Court (hereinafter, the “First Decision on Disposition”), a fact established by the original trial court. In addition to ordering the Appellant to rectify within a stated period, the Original Disposition in this case also pointed out that the Appellant still failed to apply for the contribution to the labor pension within the required period after the First Disposition but before the Original Disposition and imposed a fine on the Appellant specifically via the Original Disposition in accordance with Article 49 of the Labor Pension Statute. Since Article 49 of the Labor Pension Statute specifically provides that if an employer fails to file an application to contribute to the labor pension in violation of Article 18 of the same statute and to rectify within a stated period and is subsequently fined, the fine may be imposed continuously until rectification is made, this shows that the Original Disposition reflects the penal power conferred upon the Appellee to impose continuous fines if the Appellant fails to rectify within a stated period in which it is required to rectify after its administrative law obligation to apply for the contribution under Article 18 of the same statute was determined in the First Disposition. To wit, the Original Disposition is preconditioned by the validity of the First Disposition.
The First Disposition was rendered due to the Appellant’s failure to perform its administrative law obligation to apply for the contribution to labor pension in accordance with Article 18 of the same statute as the employer of the workers and as a result of the Appellant’s failure to rectify within the requested rectification period. Since the First Decision on Disposition was rendered to establish the legality of the First Disposition, both parties in this case should be bound by the res judicata effect of the first decision. The legality of the First Disposition cannot be disputed and substantively reviewed again before the First Disposition is revoked or reversed or invalidated for other grounds, and only the factual aspect concerning if the Appellant did fail to rectify when the Original Disposition was rendered could be considered and determined under the premises that the First Disposition is legal.
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