This Statute is enacted to facilitate the privatization of government-owned enterprises, to exert the market mechanism, and to enhance the operational efficiency of enterprises.
The privatization of government-owned enterprises, either in whole or in part, shall be governed by this Statute. With regard to matters not provided for in this Statute, the provisions of other laws and regulations shall apply.
The term "government-owned enterprise" as used in this Statute shall refer to the following enterprises:
1. Any enterprise either solely owned by any government or jointly operated by governments at various levels;
2. Any enterprise jointly invested in and operated by the government and private individuals where the capital of the government exceeds fifty percent (50%); or
3. Any enterprise jointly invested in by the government and government-owned enterprises of the preceding two sub-paragraphs, or by government-owned enterprises of the preceding two sub-paragraphs, where the aggregate invested capital exceeds fifty percent (50%) of the capital of the investee enterprise.
The term "authority in charge of the enterprise" as used in this Statute shall refer to the authorities in charge of the concerned enterprises.
Where the authority in charge of the enterprise, in view of the situation, consider that there is no more necessity to operate a government-owned enterprise by the government, such government-owned enterprise may be privatized after it is so proposed to the Executive Yuan and approved thereby.
The privatization of a government-owned enterprise shall be effected by the authority in charge of the enterprise in the following manners:
1. Sale of shares;
2. Sale of assets through bidding;
3. Formation of a private-owned enterprise by joint venture with private individuals by way of contribution in kind;
4. Merger of companies with the surviving enterprise being a private-owned enterprise; and
5. Capital increase by cash.
In privatizing a government-owned enterprise in the manners provided in the preceding paragraph, the authority in charge of the enterprise may, after proposing and obtaining an approval from the Executive Yuan, effect the privatization by negotiation with a specific counter-party which is selected through public invitation. The contents of negotiation shall be submitted to the Legislative Yuan for recordation.
In the event that a non-incorporated government-owned enterprise transfers its public-use property, which is necessary for its business operation, according to paragraph 1, upon the privatization of that enterprise, it shall not be subject to the restrictions of Article 28 of the National Property Law.
In privatizing a government-owned enterprise under the provisions of the preceding Article, a price appraisal committee shall be formed by the authority in charge of the enterprise in conjunction with the authority or authorities concerned to evaluate and decide the price.
Upon the date when a government-owned enterprise is privatized, the employees who are willing to be transferred shall be so transferred; provided, however, that if it is otherwise agreed upon by the new and old employers upon the time of restructuring or transferring the enterprise, such agreement shall prevail.
Upon the date when a government-owned enterprise is privatized, the employees who are not willing to be transferred, or who are not transferred because of the proviso of the preceding paragraph, shall clear the procedures of severance. Severance pay shall be paid to such employees and shall be calculated in accordance with the criteria for payment of pensions as stipulated in the Labor Standards Law, without being subject to the restrictions of age and seniority of service. An additional six-month salary at the salary rates applicable to them at the time of the privatization, and an additional one-month wage in lieu of the one?month advance notice, shall be paid. To those employees to whom the provisions of the Labor Standards Law are not applicable, the foregoing may be applied by analogy.
For the employees retained in employment after the privatization of a government-owned enterprise, the original employer of the enterprise may, on the date of their transfer, settle the account of their benefits with respect to their respective seniorities of service based on the payment criteria set forth in the preceding paragraph, but the six-month salary and the wage in lieu of the one?month advance notice shall not be paid. Where any of such retained employees are laid off within five (5) years from the date of the privatization of the government-owned enterprise, the said employee(s) shall be paid a severance pay to be calculated based on the salary rate applicable to him/her at the time of the transfer to the private?owed enterprise or at the time of his/her lay?off, whichever is more beneficial to the employee, plus a six?month salary based on the employee's salary rate at the time of the transfer to the private?owed enterprise and the wage in lieu of the one?month advance notice.
For the employees who are laid off under the preceding paragraph and who meet the retirement conditions, it shall be additionally handled according to the retirement regulations. For the employees who clear the procedures of severance according to paragraph 2, or are laid off according to the preceding paragraph, should they suffer any loss of pension payable to them under the civil servant insurance program or the old?age payment under the labor insurance program, their losses of such benefits shall be compensated. For the employees who are transferred to and retained by a private?owned enterprise privatized from a government-owned enterprise, if they incur any loss with respect to their insurance period originally covered under the civil servant insurance program as a result of switching their insurance enrollment to the labor insurance program, they shall be compensated by analogy. Any reduction or loss of other rights or interests which are originally available shall also be compensated.
The regulations governing the compensations set forth in the preceding paragraph shall be drawn up by the authority in charge of the enterprise and submitted to the Executive Yuan for approval.
The government shall bear the expenses required for the payment of the six-month salary and the compensation for various damages and losses payable under this Article.
Those employees who have cleared the procedures of severance according to paragraph 2, or have been laid off according to paragraph 3, and then are employed by other government-owned enterprises, the provisions of the six-month salary payment, the wage in lieu of one-month advance notice, and the compensation for damages and losses of rights and interests, shall no longer be applicable. In calculating and settling the seniority of service and severance pay, the aggregate seniority of service with the former and latter government-owned enterprises, which is on a two-units-for-one-year basis, shall not be longer than fifteen (15) years.
For the employees retained in employment after the privatization of a government-owned enterprise, the seniority of their compulsory military service shall be included; for those who were still employed on June 5, 1998, the seniority of their compulsory military service shall be included and settled corresponding to the settlement for the seniority of service of civil servants, and the salary standard of settling the severance pay at the time of privatization shall be used as the calculation standard for supplementing the units for the length of the compulsory military service; provided, however, that at the time of privatization, if the seniority of service already exceeds thirty (30) years, the seniority of the compulsory military service shall not be included for calculation.
Upon the date when a government-owned enterprise is privatized, the expenses and interests originally set aside and contributed to the Civil Service Pension Fund according to the laws and regulations relating to the retirement of civil servants, shall be settled and cleared by the fund management agency. If there is any surplus, it shall be appropriated to the enterprise; if there is any deficit, it shall be returned to the fund by the enterprise.
In the event the employees who have received compensation payment under the civil servant insurance program or the labor insurance program and then participate in such insurance programs again and claim for pension or old-age payment, the insuring agencies shall withhold the original compensation payment without being subject to the restrictions of Article 29 of the Statute for Labor Insurance which entail that the compensation payment shall not be transferred, offset, seized or used as security; provided, however, that if the pension or old-age payment that is claimed is less than the original compensation payment, only the amount that is claimed shall be withheld.
The amount withheld by the insuring agencies pursuant to the preceding paragraph shall be returned to the original authority in charge of the enterprise.
A government-owned enterprise shall conduct employees' job transfer training, second career training or employment assistance before it is privatized. Where necessary, the authority in charge of the enterprise or the competent authority for labor administration shall assist therein.
For the employees who are laid off within five (5) years after a government-owned enterprise is privatized, the competent authority for labor administration shall conduct the training for job transfer or employment assistance.
When a government-owned enterprise is privatized through selling its shares, a specific quota of shares shall be set aside for the employees' to subscribe on a favorable term and preemptive basis. Regulations governing such matters shall be drawn up by the authority in charge of the enterprise and submitted to the Executive Yuan for approval.
In privatizing a government-owned enterprise according to the provisions of Article 6, the authority in charge of the enterprise may, as it deems necessary to coordinate the economic policies and market situation, propose to the Executive Yuan and obtain its approval to exempt from the restrictions set forth in paragraph 1 of Article 25, Article 26, Article 52 and paragraph 1 of Article 86 of the Budget Law and Article 7 and Article 66 of the National Property Law. The net balance of income and expenses may be included in the auditing of that current fiscal year or a supplementary budget shall be made.
Where the shareholdings of an enterprise held by the government does not exceed fifty per cent (50%), the provisions of Article 6, Article 7, the preceding Article and Article 15 shall be applicable, mutatis mutandis, to the transfer of such government-held shares.
The funds obtained by the government from privatizing a government-owned enterprise shall be handed over to the National Treasury as a financial resource for capital expenditures, except that part of the funds may first be appropriated for a special fund.
The regulations governing appropriation and use of the aforesaid special fund shall be prescribed by the Executive Yuan. The uses of the special fund as set forth in the preceding Paragraph shall be as follows:
1. To pay the additional six-month salary and the compensation for various losses provided in Paragraph 6 of Article 8 and the fees and expenses borne by the government for privatization.
2. To finance the shortage caused by the payments made by such government-owned enterprise for privatization.
3. To finance the shortage caused by the payments to a government-owned enterprise's employees laid off as a result of any special project prior to privatization and/or in connection with the winding-up of the government-owned enterprise.
4. To finance the government's capital plan expenditure.
The provisions of Paragraph 1, Article 25, Paragraph 1, Article 86 and Article 89 of the Budget Law shall not apply to the funds paid and appropriated for the special fund under Paragraph 1 of this Article.
In the event that a non-incorporated government-owned enterprise restructures itself, in part or in whole, into a government-owned company for the purpose of privatization, the budget of the original enterprise may continue to be used.
The government-owned shares in the government-owned company under the preceding paragraph may be transferred after the registration of incorporation of that company, without being subject to the restrictions of paragraph 2, Article 163 of the Company Law.
Where a government-owned enterprise, which is of public utility or national defense nature, is privatized, the authority in charge of the enterprise may order the enterprise to issue preferred shares for subscription at par value by the authority in charge of the enterprise, entitling it to exercise the rights set forth in paragraph 2 within a specific period of time.
An enterprise which issues preferred shares shall obtain consent from the shareholder of the preferred shares prior to conducting the following acts:
1. Changing the name of the enterprise;
2. Changing its business scope; and
3. Transferring its business or assets in whole or in substantial part.
Any resolution adopted by the enterprise in violation of the preceding paragraph shall be null and void.
The preferred shares issued according to this Article shall not be transferred; provided, however, that after the expiration of the specific period of time provided in paragraph 1, such preferred shares shall be redeemed at par value and eliminated by the enterprise.
The enforcement rules of this Statute shall be prescribed by the Executive Yuan.
This Statute shall take effect on the date of promulgation.