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(釋字第 719 號 )      友善列印PRINT  
Interpretation
J.Y.
Interpretation
NO.719  [ Case concerning mandatory requirement for government procurement winning bidders to employ a certain percentage of indigenous people ]
Date 2014/4/18
Issue Is the law unconstitutional to require a government procurement winning bidder hiring more than 100 employees to recruit a certain percentage of indigenous people, and to make the substituting payment for failing to comply?
Holding Paragraphs 1 & 3, Article 12 of Indigenous Peoples’ Employment Rights Protection Act and Article 98 of Government Procurement Act, requiring that those award-winning bidders from government procurement bids, who have hired more than 100 employees locally, shall employ indigenous people to a minimum of one percent (1%) of its total employees during the term of contract performance and in the event that the award-winning bidder fails to hire the number of indigenous people as stipulated under the law, the bidder shall pay a fee in substitute to the employment fund of Indigenous Peoples Comprehensive Development Fund, are not inconsistent with the principle of equality under Article 7, and the principle of proportionality under Article 23 of the Constitution and are consistent with the constitutional protections of the right to property, and the right of individuals to freely operate business, the essence of the right to work, under Article 15 of the Constitution.
Reasoning People’s freedom to operate a business falls under the constitutional guarantees of people’s right to work and property rights under Article 15 of the Constitution (see J.Y. Interpretations Nos. 514, 606 and 716). Any restriction or limitation imposed by the state on people’s freedom to operate a business and property rights shall be in compliance with the principle of equality under Article 7, and the principle of proportionality under Article 23 of the Constitution. Whether the stipulations of a law are in compliance with the constitutional principle of equality should hinge on whether the purpose of the differential treatment is justifiable, and whether between the distinctions created and the stated objective of the law there is a certain degree of connection (see J.Y. Interpretations Nos. 682, 694 and 701). With respect to the restrictions of people’s rights in order to pursue a public interest objective, if the means adopted is necessary and the restriction is not excessive, it then is not inconsistent with the principle of proportionality under Article 23 of the Constitution.

Paragraph 1, Article 12 of Indigenous Peoples’ Employment Rights Protection Act stipulates: “those bidders winning bids according to Government Procurement Act, and hiring more than 100 employees locally, shall employ indigenous people to a minimum of one percent (1%) of the total number of employees during the term of contract performance.” Paragraph 3 of same Article stipulates: “in the event that the winning bidder fails to hire the number of indigenous people as required under the law, the bidder shall pay a fee in substitute to the employment fund of Indigenous Peoples’ Comprehensive Development Fund.” Furthermore, Article 98 of Government Procurement Act regulates that: “those bidders winning bids, and hiring more than 100 employees locally, shall employ the physically or mentally disabled or indigenous people to a minimum of two percent (2%) of the total number of employees during the term of contract performance; and in the event that the winning bidder fails to hire the number of indigenous people as required under the law….., the bidder shall pay a fee in substitute…..” Said two percent (2%) consists of at least one percent (1%) of disabled and indigenous people, respectively (see Paragraphs 1 and 2, Article 38 of Persons with Disabilities Rights Protection Act and Paragraph 2, Article 107 of Enforcement Rules of Government Procurement Act; with respect to the portion concerning indigenous people, hereinafter, collectively, referred to as the “regulations in dispute”). The regulations in dispute request the bidder winning bids (the “award-winning bidder”), and hiring more than 100 employees locally, shall employ indigenous people to a minimum of one percent (1%) of its total number of employees during the term of contract performance; consequently, the regulations in dispute restrict or limit the award-winning bidder’s freedom to operate business, such as freedom to decide if it should increase the number of employees or who should be hired, and infringe the award-winning bidder’s property right and right to freely operate business, the essence of the right to work. Additionally, if the award-winning bidder fails to hire the number of indigenous people, it is then obligated to pay a fee in substitute, which constitutes an infringement on the award-winning bidder’s property right.

Article 5 of the Constitution regulates: “The various ethnic groups in the Republic of China shall be treated equally.” Paragraph 12, Article 10 of the Amendment to the Constitution stipulates: “The state shall, in accordance with the will of the ethnic groups, safeguard the status and political participation of the indigenous people. The state shall also guarantee and provide assistance and encouragement for indigenous people’s education, culture, transportation, water conservation, health and medical care, economic activity, land, and social welfare…...” The regulations in dispute are set forth by the legislators in order to fulfill the objectives contemplated by the Constitution and the Amendment to the Constitution, to promote the employment of indigenous people and to improve their economic and social conditions by means of a preferential measure to be taken by the award-winning bidder to hire a certain percentage of indigenous people, which is in accord with the spirits of international protection on the indigenous people (see Article 1 of Indigenous Peoples’ Employment Rights Protection Act and Forepart of Paragraph 2, Article 21 of United Nations Declaration on the Rights of Indigenous Peoples, 2007, which stipulates: “States shall take effective measures and, where appropriate, special measures to ensure continuing improvement of their economic and social conditions.” Paragraph1, Article 20 of Indigenous and Tribal Peoples Convention, 1989 (No. 169) stipulates: “Governments shall, within the framework of national laws and regulations, and in co-operation with the peoples concerned, adopt special measures to ensure the effective protection with regard to recruitment and conditions of employment of workers belonging to these peoples, to the extent that they are not effectively protected by laws applicable to workers in general.”) Consequently, the objective of the regulations in dispute is to maintain a paramount public interest and therefore is justifiable.

Government procurement is a component of the state’s public functions, which not only involves the use of the state’s budget but carries a close relationship with the maintenance of public interests. Although the regulations in dispute restrict or limit the award-winning bidder’s property right and freedom to operate business, they only require the award-winning bidder hiring more than 100 employees locally to employ indigenous people to a minimum of one percent (1%) of its total number of employees during the term of contract performance. Said one percent requirement is not burdensome and in the event the award-winning bidder fails to hire the number as required under the law, the restriction imposed on the award-winning bidder to pay a fee in substitute is not excessive. If the winning bidder fails to hire the requested number of indigenous people, it can pay a fee in substitute on a monthly basis in the amount equivalent to the minimum wage as set forth by the government. Furthermore, the regulations in dispute do not uniformly require that all the winning bidders pay a fee in substitute, but impose such obligation to the award-winning bidders only when the hiring of indigenous people does not reach certain percentage. Prior to bidders’ participating in bids, they should assess whether the amount of the substituting payment is too high to bear. Given the substituting payment is to replenish the employment fund of Indigenous Peoples Comprehensive Development Fund to further promote employment of indigenous people and to improve their economic and social conditions, the regulations in dispute requiring the substituting payment, and therefore restricting the award-winning bidder’s property right do not clearly lose their balance between the restrictions and the safeguard of public interests. Based on above, the regulations in dispute are not in conflict with the principle of proportionality under Article 23 and are not inconsistent with the protections of the right to property, and the right to freely operate business, the essence of the right to work, under Article 15 of the Constitution.

Based upon the meaning and purpose of the above-mentioned provisions under the Constitution and Amendment to the Constitution, the state is charged with the obligation to protect, assist and promote the development of indigenous peoples. Under the government procurement system, the regulations in dispute, using whether the number of the locally hired employees exceeds 100 as the standard of classification, require that the award-winning bidder hiring more than 100 employees locally shall employ a certain percentage of indigenous people during the term of contract performance and make the substituting payment for not being able to meet the percentage, thus creating a differential treatment among the different sizes of the award-wining bidders within the government procurement market. The reason why the regulations in dispute create such a differential treatment is because the bidders who hire more than 100 employees more likely than not have larger operations, more hiring flexibility and better capability to further hire indigenous people. Furthermore, given the regulations in dispute, using whether the number of the locally hired employees by the bidder exceeds 100 as the dividing line for differential treatment, only require that the award-winning bidder employ indigenous people to a minimum of one percent (1%) of the total number of employees, they mean to lower the impact of the differential treatment while realizing the above-stated objectives. There should be a reasonable connection between the differential treatment and the achieving of the objectives thereof. Since the level of the indigenous people’s education and professional skill is by and large relatively weak as opposed to the competitiveness of the job market, their living conditions are thus affected. The classification adopted by the regulations in dispute has therefore established a reasonable connection with the objectives anticipated to be achieved. Consequently, the regulations in dispute are not in conflict with the principle of equality under Article 7 of the Constitution.

Where there are several alternative measures by which the state may take to achieve the objective to protect, assist and promote the development of indigenous peoples, the measure adopted by the regulations in dispute to require that the award-winning bidder shall employ a certain percentage of indigenous people during the term of contract performance also constitutes one of such alternative measures. Nevertheless, given most of the available jobs are more short-term or require non-technical skills, it may be difficult to enhance the long-term, stable employment opportunity and professional skills. Consequently, the state shall actively through substantive policies and measures realize the objective contemplated by the above-mentioned Amendment to the Constitution to protect indigenous peoples’ right to work, and regularly review and revise such policies and measures based on the time and environment of the state and the society, as well as the need for the protection over the indigenous people’s right to work. Moreover, in the event the award-winning bidder fails to hire a certain percentage of indigenous people, the bidder is charged with the obligation to pay a fee in substitute. If the amount of the fee paid in substitute exceeds that of the government procurement, there should have an appropriate mitigating mechanism by which the amount can be adjusted. Consequently, pursuant to this interpretation, the relevant government agencies shall review and improve the relevant provisions under the Government Procurement Act and Indigenous Peoples’ Employment Rights Protection Act as soon as possible.

The petitioners (#1 and #3 as listed in the attachment) also alleged Articles 107 and 108 of Enforcement Rules of Government Procurement Act as amended and promulgated on November 27, 2002, violate the principles of equality, proportionality and clarity and definiteness of authorization and the legal principle of the reservation of law, but the petitions had not submitted concrete reasons for the formation of objective belief that the law is unconstitutional, or objective description of concrete unconstitutionality. Furthermore, the petitioners (#1 and #3) alleged Paragraphs 2 and 3, Article 24 of Indigenous Peoples’ Employment Rights Protection Act, the petitioner 2 asserted Paragraph 1 of same Article, and the petitioner 4 claimed Paragraph 2 of same Article, had violated their constitutionally protected right of equality and property right; but upon examination, they are not applied by the final judgment and as such, they are not applicable for the interpretation. As such, the above petitions are inconsistent with Item 2, Paragraph 1, Article 5 of the Constitutional Interpretation Procedure Act, and shall be dismissed pursuant to Item 3 of same Article. It is so indicated herein.
Translated by Wei Feng Huang of THY Taiwan International Law offices
Editor's Note Summary of facts: The petitioners Sinon Corporation, Next Media Ltd., Apply Daily Ltd., and Taiwan High Speed Rail Corporation each participated in government procurement bidding; but due to the fact that the petitioners, after winning the bid, failed to recruit indigenous people at the minimum of one percent (1%) of the total employees during the term of contract performance in accordance with Paragraph 1, Article 12 of Indigenous Peoples’ Employment Rights Protection Act and Article 98 of Government Procurement Act, each petitioner was ordered by the Council of Indigenous Peoples to make employment substituting payment from NT$500,000 to NT$4,000,000 respectively, in accordance with Paragraph 3, Article 12 of Indigenous Peoples’ Employment Rights Protection Act and Article 98 of Government Procurement Act. Given all the petitioners considered that the amount of the employment substituting payment constituted a large amount of money, all the petitioners appealed respectively but eventually lost. As such, each petitioner filed the present petitions for the constitutional interpretation (altogether 4 petitions) alleging the regulations in dispute were in conflict with the right of equality, freedom to operate business and property right under the Constitution. Grand Justices received the petitions respectively but decided to combine the docket.
Opinion
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