The Supreme Administrative Court recently made several important judgments regarding whether employers are obligated to provide employees with overtime pay for employees' "voluntary overtime work"; this issue was also discussed at the 2018 Law Conference of the High Administrative Court, albeit the High Administrative Court's opinion was different from that of the Supreme Administrative Court. Therefore, using a hypothetical case, this article aims to illustrate the differences between the views of the Supreme Administrative Court and the High Administrative Court.

 

I. Facts of the hypothetical case and the judicial views:

 

Background: The Employer and the Employee agreed to an eight-hour work day with overtime starting from 18:00 and calculated using the minimum increment of 0.5 hours for overtime work. On a working day in January 2017, while the Employer did not ask the Employee to work overtime or ask the Employee to complete excessive amount of work within a limited period of time, the Employee voluntarily worked overtime from 18:00 to 20:00 (the attendance records indicated the Employee left the office at 20:00) without first submitting an overtime request in the company's Attendance Management System to obtain the approval from his supervisor as stipulated in the company's Work Rules. After completion of overtime work, the Employee did not file any supplementary application to obtain overtime approval, either.

 

The Question: Is the Employer obligated to provide the Employee with overtime pay in accordance with the Labor Standards Act?

 

1.  The Supreme Administrative Court adopts the following position (see Supreme Administrative Court Judgment 106-Pan-541 (2017), Judgment 106-Pan-617 (2017) and Judgment 107-Pan-508 (2018)):

 

Although the Employee did not file a request for his overtime work, in the circumstances specified below, the Employer will still be deemed as having agreed to the Employee's overtime work and consequently be required to provide the Employee with overtime pay, regardless of the fact that the Employer's internal rules prescribed that overtime work is subject to prior approval:

 

(1)Where the Employee's overtime work was carried out due to the Employer's express or presumed consent; or

 

(2)Where the Employer was aware or might be aware that the Employee was working overtime at the workplace provided and supervised by the Employer, but the Employer did not prevent the Employee from carrying out the overtime work or make any objections to such overtime work, thus accepting the overtime work accordingly.

 

However, previous judgments of the Supreme Administrative Court had also ruled that an employer would not be obligated to provide the employee with overtime pay if the employer could prove that the employee did not perform services at the work place for the employer after the normal working hours.

 

2.  On the other hand, the following conclusions were reached at the 2018 Law Conference of the High Administrative Court in respect of Issue No. 5 raised therein:

 

(1)According to Article 32 of the Labor Standards Act, overtime work shall be subject to the agreement by both the employer and the employee. This indicates that overtime work may not be unilaterally decided by either the employer or the employee. That is, any and all unilaterally decision to carry out overtime work, whether made by the employer or the employee, will not be legally binding.

 

(2)If the Employer did not do anything to require the Employee to work overtime, the Employer will not be obligated to provide the Employee with overtime pay even if the Employee did voluntarily carry out the overtime work.

 

(3)The Employer can be deemed as having exercised the due care required for the management of employees' work hours and overtime work and having established proper management and preventive measures, if the Employer has put in place an internal system for requesting or applying for overtime work as a platform to facilitate communication and agreement between the labor and the management regarding overtime work, and as a tool for the Employee to conduct self-assessment on his productivity and quality of work during the normal working hours, to decide whether it is necessary to carry out overtime work, and to file applications to obtain his supervisor's approval for his overtime work.

 

(4) As the Employer did not ask the Employee to perform overtime work, or ask the Employee to complete excessive amount of work within a limited period of time, or prevent the Employee from filing a request or application for overtime work, the Employer is not obligated to provide the Employee with overtime pay, because the Employee did not file an application to obtain approval before or after carrying out the overtime work and such overtime work was not conducted out of the request of the Employer.

 

II. As judgments made by the Supreme Administrative Court have binding effect on lower courts, it will be advisable to follow with the opinions of the Supreme Administrative Court and the views the 2018 Law Conference of the High Administrative Court should be for reference only.

 

III.Based on judgments of the Supreme Administrative Court and the conclusions of the 2018 Law Conference of the High Administrative Court elaborated above, we concluded the following principles regarding whether employers are obligated to provide employees with overtime pay for their "voluntary overtime work":

 

1.  Employees' attendance records are the basis for employers to verify whether employees have been working at the workplace designated by employers during normal working hours or for any overtime hours. The arrival and departure time documented in such records can be deemed the starting and ending time of employees' work hours. Therefore, if the arrival or departure time of an employee did not fall within the normal working hours, the employee could be presumed as having worked overtime.

 

2. If an employee's attendance records show that he remained in the office after normal working hours, and the employer did not make any objections or prevent him from staying in the office, the employee could be presumed as having worked overtime and the employer will be obligated to provide the employee with overtime pay in accordance with the Labor Standards Act.

 

3. If an employee's attendance records show that he remained in the office after normal working hours, but the employer could prove that the employee did not perform services for the employer after the normal working hours, the employer will not be obligated to provide the employee with overtime pay in accordance with the Labor Standards Act.

 

4.  As for how can an employer prove that its employee did not perform services for the employer beyond the normal working hours, a statement issued by the employee out of his/her own volition, specifying that he/she stayed in the office after the normal working hours to deal with his/her personal affairs instead of performing services for the employer, would suffice (see Supreme Administrative Court Judgment 106-Pan-715 (2017)). However, if such statement was made in a standard format prepared by the employer and statements issued by different employees have the same wording and content, then even if such statements have been executed by the employees, the Supreme Administrative Court opined that such statement could not sufficiently prove that the employees were dealing with personal matters after the normal working hours and that further investigations would need to be conducted to verify whether the employees did perform services for the employer after the normal working hours (e.g. checking the employee's email correspondences) before the employer may be relieved from its obligation of providing overtime pay (see Supreme Administrative Court Judgment 107-Pan-508).