Hao Sheng Handicraft Shop was complained for alleged violation of the Fair Trade Law by charging for materials under the pretext of hiring part-timers working from home
Case:
Hao Sheng Handicraft Shop was complained for alleged violation of the Fair Trade Law by charging for materials under the pretext of hiring part-timers working from home
Key Words:
part-timers working from home, trading order, advantageous position
Reference:
Fair Trade Commission Decision of August 9, 2001 (the 509th Commissioners' Meeting); Disposition (90) Kung Chu Tzu No. 107
Industry:
Other Plastic Goods Manufacturing (2509)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. This case originated with separate complaints by five citizens against Hao Sheng Handicraft Shop (Hao Sheng) for alleged violations of the Fair Trade Law by selling handicraft materials for profit under the pretext of hiring individuals as contract workers working from home. The complaint was annexed with relevant evidence for the Fair Trade Commission's (FTC) investigation and review. 2. The FTC's investigation found that Hao Sheng enticed people to enter into agreements to purchase handicraft materials by assuring them that the trade was easy to learn and offered high returns and guaranteed contractual rights. At the time of contract signings, Hao Sheng made no prior disclosure of information regarding the degree of difficulty involved in manufacturing the products and in meeting the standards required for finished products. Hao Sheng obviously took advantage of the applicants' sense of urgency in obtaining employment, carelessness or inexperience in signing contracts. The contract workers were also required to make advance payments of NT$15,000 to NT$32,000 for the cost of materials. After working for more than a month, the contract workers were either not paid, or paid an amount inconsistent with what they paid in advance. It is obvious that there was a high degree of difficulty involved in manufacturing said product, and Hao Sheng intentionally avoided paying the contract workers by claiming difficulties in passing the product inspection. Further, the contract workers' complaints to Hao Sheng regarding the high degree of technical difficulty involved and the impossibility of meeting the company's product standards were never properly addressed or accepted. Hao Sheng, as the party in an advantageous position, obviously failed to fulfill its obligation to show consideration for and assist the other parties involved. Further, the FTC requested said Hao Sheng to produce materials such as account books, basic information on contract workers, copies of worker contracts, inventories, order records, quality standard information, total amount of material fees collected, payment of remuneration, target customers of said goods and sales figures. Hao Sheng indicated that such information was either non-existent or that they could not produce such information. Said business also acknowledged that there was no fixed distribution channel or target consumers for the finished product, nor were there any records of sales figures. There were obviously a limited number of finished products held by Hao Sheng. The fact that there was neither a fixed distribution channel for the finished products nor any sales income to pay the contract workers also indicates that Hao Sheng relied on the sale of materials as its main source of income. Further, the company required contract workers to pre-purchase their first lot of materials with no avenue to seek a refund. This is an unfair clause made as a result of one party taking advantage of its superior contractual power. 3. Hao Sheng's conduct in selling manufacturing materials or equipment under the false pretext of hiring contract workers to work from home was an obviously deceptive and unfair act constituting a violation of Article 24 of the Fair Trade Law. The FTC, after considering of the extent of the harm created by the violation, the duration of harm, the frequency that said business violated the law, the period between each violation and its market position, ordered Hao Sheng to immediately cease all such deceptive or obviously unfair conduct likely to affect the trading order and pay a fine of NT$1 million. Appendix: Hao Sheng Handicraft Shop's Uniform Invoice Number: 19954239 Summarized by Wu, Pi-Ju; Supervised by Wu, Te-Sheng