Dismissal of an employee is permissible for the following reasons:

• Closure of business or transfer of ownership.
• Company operations are suspended for more than one month by force.
• Change of company business nature, requiring a reduction in the number of employees, and there are no suitable job openings for redundant employees.
• The employee is confirmed to be incompetent to carry out the work assigned to him or her.
• A notice and pay severance to the employee is needed; unless an employee misrepresents facts at the time of signing the employment contract, violence against the employer, the employer’s family, or fellow employees, the employee is absent from work for three consecutive days or for six days in a month without justifiable reason, or the employee causes damage purposefully.

Taiwanese employees under their probationary period will have up to 10 days of notice period. After probation, they are entitled to up to 30 days of notice period.

Severance pay

If the employment began before 2005 under the Labor Standards Act, severance pay is equivalent to 1 month of average wages for each year of employment. Employees who have worked for less than 1 year receive prorated severance pay.

If the employment began after 2005 under the Labor Pension Act, severance pay is calculated based on one month’s average wages for each year of employment. However, the amount paid for each year is equal to 50% of the employee’s average monthly salary.