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The Administrative Court's Recent View on Attendance Records and Overtime Pay
To determine whether an employer should make overtime payments to employees, the labor authority usually relies on the information from the "door access control system", which keeps an electronic record of an employee's entry and exit in an office environment. During labor inspections, it is common for the labor inspector to challenge the company's failure to make overtime payment when the electronic records of the "door access control system" show an employee's time of departure was beyond the normal working hours. In such a case, the labor inspector will determine that the employer has violated Article 24 of the Labor Standards Act for failing to make overtime payment and impose a disciplinary sanction on the employer.
However, the electronic records from the "door access control system" simply indicate the worker’s time of arrival and time of departure. These records do not necessarily indicate the actual work time of the worker. In spite of the fact that the competent labor authority has constantly relied on the electronic records of the "door access control system" to impose disciplinary sanction, the Taipei Administrative High Court rendered two judgments in the first half of this year to overturn the sanctions imposed solely based on the electronic records of the "door access control system". It is worth paying attention to see whether the competent labor authority will change its basis of determining whether overtime has been performed based on these two judgments. A synopsis of the two judgments is provided below.
1. Taipei Administrative High Court 2015 Jiang-Shang-Zhi No. 5:
(1) Facts:
The employer operates a computer manufacturing business and uses an access control management system, along with an overtime application system, to record the status of workers’ attendance. During labor inspection by the competent labor authority, it was determined that the workers performed overtime solely based on the records of the access control management system.
(2) Main Points of the Judgment:
i. Although a worker has performed overtime, if a prior application was not filed with the employer in advance, the work performed was not subject to the employer’s direction and supervision. In addition, the services provided were not ratified and accepted by the employer afterwards. Hence, the parties to the labor contract clearly did not reach an agreement regarding the extended work hours, and the competent authority should not impose disciplinary sanction on the employer for violation of Article 24 of the Labor Standards Act.
ii. The employer has implemented an overtime application system, which serves as the platform for an agreement between the employer and the employee to extend the work hours. This system allows the workers to decide whether extended work hours are necessary judging from the efficiency and quality of their work during normal work hours. If overtime work was necessary, the workers can log into the overtime application system and make a submission to their supervisors for approval. It can be deemed that the employer has exercised due care for the management of work hours and overtime payment. The employer also sent a notice of “Hours for the calculation of Leave, Attendance and Salary Payment” to all employers on a monthly basis, specifying leave/attendance applications (including leave application, overtime, shift schedule, and deferred submission of application), leave and overtime approval, cut-off dates for leave/attendance settlement and salary settlement, as well as the website of the leave schedule system.
iii. When a worker provides services during extended work hours without prior or subsequent application with the employer, such extended work hours were not performed pursuant to the employer’s request. Under such circumstances, the employer is not obliged to make overtime payments.
2. Taipei Administrative High Court 2015 Su-Zhi No. 1887:
(1) Facts:
The employer operates a banking business and has established an overtime application system. During labor inspections, the competent labor authority deemed that the worker performed multiple days of overtime solely based on the electronic records of the "door access control system".
(2) Main Points of the Judgment:
i. Although a worker has extended the hours of work, if a prior application was not filed with the employer, the work performed was not subject to the employer’s direction and supervision, and the services provided were not ratified and accepted by the employer afterwards. Hence, the parties to the labor contract clearly did not reach an agreement about the extended work hours, and the competent authority should not impose disciplinary sanction on the employer for violation of Article 24 of the Labor Standards Act.
ii. The employer has established an overtime application system, which serves as the platform for an agreement between the employer and the employee to extend the work hours. Workers’ overtime should be performed in accordance with the company's rules.
iii. Although the worker departed the office after the normal work hours, the worker failed to seek prior consent from the department supervisor and did not file an application afterwards in accordance with the work rules. Hence, the employer is not obliged to provide overtime pay for the extended work hours as required under Article 24 of the Labor Standards Act.