The Taiwan Direct Selling Association yesterday criticized a draft regulation on disputes involving direct-selling companies because it would not resolve disputes involving illegal firms.
“If the government’s goal is to prevent these types of disputes, it should focus more on cracking down on illegal companies, which often set unfavorable conditions for their employees,” the association said in a statement.
The association’s remarks came after the legislature’s Economics Committee on Monday passed the first draft of a regulation regarding multi-level sales, which would impose heavier penalties on offenders and also require direct-selling companies to set up a consumer protection mechanism.
Under the proposed regulation, violators could be fined a maximum of NT$100 million (US$3.33 million) and given a jail term of between three and seven years. In addition, companies would have to pay the costs of any lawsuits that arise from disputes with employees.
The draft regulation is pending further review in the Legislative Yuan.
However, the Fair Trade Commission yesterday said the establishment of such a protection mechanism was needed.
“A lot of people who join direct-selling companies are not wealthy, and suffer a lot when they have to file suits against these companies,” commission spokesman Sun Lih-chyun (孫立群) said by telephone.
For illegal direct selling companies, they are subject to the Criminal Code (刑法), adding that the draft regulation would not put much emphasis on them, Sun said.