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Labor Law Revisions

Collective Agreement Expedites Labor Negotiations


Collective Agreement Expedites Labor Negotiations

Source:Chieh-Ying Chiu

Fewer than 0.1 percent of Taiwan’s corporations have a company labor union. Fubon Financial Holdings not only has a union, but the company and union have an agreement that helps the company respond better to the new labor laws.



Collective Agreement Expedites Labor Negotiations

By Echo Chu
From CommonWealth Magazine (vol. 616 )

Those capable of responding the quickest to change invariably seize the advantage.

Last December 6, the Legislative Yuan passed revisions to the Labor Standards Act, including rules to standardize a five-day workweek. The following day, the Fubon Financial Holdings’ labor union sent an official letter from its office in Beitou to the Ministry of Labor regarding ‘special leave days’ (annual leave), deferred days off, and calculation of seniority in relation to Article 38 of the Labor Standards Act. This made it the country’s first labor organization to formally raise questions on the details of the implementation of the new regulations governing time off.

Immediately upon receiving the Ministry of Labor’s response on December 21, the union called an internal meeting, requesting management to hold bilateral consultations.

Society was still all abuzz about the revised law on January 10, a month after its passage. Yet representatives of Fubon’s labor and management had already completed their first round of consultations by that date.

“We were able to reach an agreement so quickly because of the collective agreement we have with the company,” relates Wang Hao-chia, director of the Fubon Financial’s labor union, holding up the collective agreement (CA) reached with company management in March 2015, which clearly dictates that, in the event of differences of opinion over the contents of the CA, the two sides must consult together.

 'Making Up After a Big Argument'

“Workers care most about prorated wages in relation to flexible days off,” relates Wang. He notes that when the new system goes into effect, the company would like everyone to block out their leave time and stick to that schedule.

However, the 12 subsidiary companies under the Fubon Financial’s umbrella each have different histories and operate in different industries, so their respective staffs naturally have different requirements. Taking the example of Fubon Securities, a securities clerk cannot earn sales bonuses without being at work, so the new standardized five-day workweek system will likely result in diminished income.

Wu Hsien-fang, Fubon Financial’s labor union representative for southern Taiwan, says that many employees have been up in arms, worrying that the company is getting around the prorating of wages for untaken annual leave time by scheduling it in advance. “There is a lot of confusion and fear in our hearts,” says Wu. Fortunately, labor-management consultations quickly produced a consensus, easing employees’ minds and keeping company operations on track.

“We’re not acting when we get in fights; the right amount of conflict produces room for negotiation, and problems ultimately get resolved,” states Wang without a hint of pretense. Management-labor communication is often thick with tension, yet at the January 10 meeting, both sides of the Fubon Financial’s bargaining table took a step back, and the union agreed to have employees schedule half of their annual leave by the start of the Chinese New Year to facilitate the company’s manpower allotment. For its part, the company also promised that annual leave scheduled in advance would not be binding, and that if employees were unable to take leave at the appointed time, they could still convert it into prorated wages.

Fast Response Alleviates Impact

Wang says that seeking to maximize income and minimize outlay is only natural for corporate managers. Consequently, the collective bargaining agreement is like an insurance contract, the first step for laborers to secure their rights and privileges. “It’s like buying an insurance policy for your rights as a worker; when something goes awry, someone speaks on your behalf,” he says.

“The collective bargaining agreement is the framework for management-labor negotiations, and whether or not there is any meat to it is immaterial,” opines Han Shih-hsien, secretary-general of the Taiwan Federation of Financial Unions.

Collective Agreement is like buying an insurance policy for your rights as a worker; when something goes awry, someone speaks on your behalf

The Fubon Financial’s labor union began asking corporate management to enter into a collective bargaining agreement in 2013. Their strategy was to actively recruit at least half of the total number of employees into the union, since only when the union’s opinions were strongly representative could a substantive collective bargaining agreement be reached. To date, a dozen subsidiary companies, spanning banking, securities, futures, and property insurance, have signed agreements, not only setting a precedent for a privately-run financial holdings group, but also establishing a record for the holding company as the one with the largest number of subsidiaries under its banner to sign such agreements.

The new Labor Standards Act presents manpower allotment challenges to a financial industry that employs a large workforce, and the collective agreement is critical to Fubon’s ability to rapidly engage in negotiations to seek an appropriate response.

Fubon Commercial Bank president Jerry Harn told members of the media that a good collective agreement should take into consideration the rights and privileges of both management and labor, which, he said, “would be difficult to achieve without mutual empathy and consensus.” The agony of enduring 10 meetings before an agreement could be signed has now become a leverage point for Fubon to ease fears concerning the impact of the new laws.  

Collective Agreement 

A written contract entered into between an employer or group acting as employer with legal person status and a labor union, established in accordance with the Trade Union Law, to determine labor relations and related issues. In the case of the Fubon Financial’s labor union, the collective agreement’s legal power outweighs that of the company’s internal work regulations.

Translated form the Chinese by David Toman



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