Taiwan’s Collective Agreement Act was promulgated and implemented as early as 1932. However, following the Chinese Civil War between the Kuomintang (Nationalists) and the Chinese Communist Party, and the ensuing relocation of the Nationalist government to Taiwan, the island remained under a prolonged period of harsh martial law. During this authoritarian era, workers did not have legitimate freedom of association, let alone substantive collective bargaining rights. As a result, the Act was derisively referred to as a “window-dressing law,” existing in form but lacking in function.
It was not until the lifting of martial law in 1987 that workers gradually regained the right to organize unions. Even so, in the early post-martial law period, the right to strike continued to face severe suppression from both the government and employers. For example, during the 1989 Far Eastern Textile Workers’ Strike, the government deployed military police to intervene and suppress the action. Under such constraints on the right to industrial action, collective bargaining could hardly develop.
In addition, the Labor Standards Act, which was enacted in 1984 under pressure from the United States and later implemented in 1985, provided protections that at the time exceeded the prevailing labor conditions in many workplaces. This led the labor movement to shift toward what was often described as a “legal compliance struggle,” focusing on demanding enforcement of statutory minimum standards rather than pursuing improvements beyond the law through collective bargaining. Institutionally, the old Collective Agreement Act did not impose a duty on employers to bargain in good faith, nor did it clearly prohibit individual employment contracts from providing terms inferior to collective agreements. These deficiencies created significant obstacles to the practical functioning of collective agreements.
A major reform did not occur until 2011, when Taiwan substantially amended the so-called “three labor laws”—the Labor Union Act, the Act for Settlement of Labor-Management Disputes, and the Collective Agreement Act. These reforms more comprehensively protected workers’ rights to organize, to engage in industrial action, and to bargain collectively. The revised Collective Agreement Act explicitly imposed a duty of good-faith bargaining on employers. An employer’s unjustified refusal to negotiate or to provide necessary information constitutes an unfair labor practice, and workers may seek remedies through an adjudication mechanism. These amendments significantly enhanced the institutional feasibility of collective bargaining.
Statistical data show that prior to 2011, the annual number of collective agreements in Taiwan never exceeded 400, and around the time of the global financial crisis it fell below 100. Approximately three years after the new laws took effect, the number began to rise significantly from 2014 onward, reaching nearly 1,000 agreements in a single year by 2025. However, this figure remains small compared to the total number of enterprises. According to statistics from the Ministry of Economic Affairs, the number of registered companies exceeded 800,000 by the end of 2025. Although the number of collective agreements cannot be directly equated with the number of companies, a mere one thousand agreements still reflects the overall rarity of collective bargaining in Taiwan. According to a 2021 report by Chen Wei-lin, Kang Chang-chien, and Chiu Yu-fan, Taiwan’s collective bargaining coverage rate has long remained at only about 5% to 7%, which is significantly lower than that of OECD countries.
Source: Ministry of Labor
Despite substantial institutional improvements and the gradual repositioning of the Labor Standards Act as a floor of minimum protection rather than a ceiling, the development of collective agreements remains sluggish. The reasons likely lie in persistent structural problems, including a low unionization rate, employer resistance, and the limited protective effect of the unfair labor practice adjudication system. For example, the chairperson of the labor union at Micron (an American semiconductor company with facilities in Taiwan) was abruptly dismissed on the eve of collective bargaining talks. Even after Micron lost in an unfair labor practice ruling upheld by a special committee under the Ministry of Labor, the company continued to pursue dismissal under other grounds and exerted pressure on the union through litigation.
Furthermore, since 2016 the Ministry of Labor has implemented the “Guidelines for Rewarding Labor Unions to Sign Collective Agreements,” providing financial incentives based on the content of agreements. While this policy has increased the number of agreements signed, there is also the potential that some agreements merely restated existing statutory rights rather than meaningfully securing substantive improvements in workers’ interests. This, to some extent, weakens the validity of using the number of agreements as a heuristic for the strength of collective bargaining rights.
Nevertheless, this does not mean that collective agreements are pointless. For unions with stronger organizational and mobilization capacity, such as those in the financial sector, telecommunications industry, or airline industry (where more assertive industrial actions have at times compelled employers to negotiate), collective agreements remain an important instrument for improving working conditions. In other words, whether collective bargaining rights can be translated into substantive gains ultimately depends on the organizational strength and mobilizing capacity of unions, which continues to be a central challenge for Taiwanese labor.