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Labor Standards Act Controversy

Employers Emerge Victorious

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Employers Emerge Victorious

Source:Kuo-Tai Liu

Taiwan’s government upset employers and workers when it revised the Labor Standards Act in late 2016 to formalize a five-day workweek system. It has now changed those provisions to increase “flexibility,” further angering labor groups.

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Employers Emerge Victorious

By Fen-Jie Wu
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The latest proposed revisions to Taiwan’s Labor Standards Act faced a tumultuous few months, as labor groups held several protests to express their displeasure. But after an 18-hour vote that included a filibuster attempt by the opposition, the Legislative Yuan relaxed existing labor laws on Jan. 10.

Reacting to criticism that its previous work rule changes in December 2016 were too rigid, the Democratic Progressive Party (DPP) government decided to ease some of those regulations, with employers the biggest beneficiaries.

Lan Ke-jeng (藍科正), an associate professor in the Department of Labor Relations at National Chung Cheng University, says the new rules on working hours will give workers and their employers more flexibility to determine work conditions on their own.

“The working conditions in every sector are different. One size does not fit all,” Lan contends.

Employers will now be able, for example, to ask employees to work 12 days in a row, compared with existing rules prohibiting them from working more than six days consecutively. That will give service businesses, such as restaurants and department stores, greater flexibility in scheduling shifts.

Similarly, for manufacturers with a backlog of orders or the high-tech sector with urgent projects, the increase in the cap on monthly overtime to 54 hours from the current 46 will help satisfy their need for overtime work in peak seasons. (see Box)

Labor groups contend, however, that the government has abandoned its commitment to protecting workers and preventing overwork. The secretary-general of the Taiwan Labor Front, Son Yu-liam (孫友聯), describes the newly passed revisions as “giving away NT$100 when people only wanted half an NT$.”

Image: Chien-Tong Wang

Sun contends that the new revisions essentially represent the death of the five-day workweek, which the original December 2016 Labor Standards Act revisions were supposed to usher in.

The biggest culprits, he argues, are allowing employees to work 12 days in a row and permitting employers to pay for actual time worked on their one “flexible” day off per week (as opposed to the one “mandatory” day off per week on which they are prohibited from working).

The existing rules require employers to pay for four hours of overtime for any time worked up to four hours on the “flexible” day off, for eight hours of overtime for between four and eight hours of work, and for 12 hours of overtime for between eight and 12 hours of overtime.

The draconian overtime rules were meant to deter employers from having employees work on the “flexible” day off, but Son believes that will no longer be the case under the latest revisions.

Article 32-1: Making it Harder to Earn Overtime

The package of enacted revisions also included a clause stipulating that companies wanting to work employees 12 days in a row or giving them only eight hours of rest between shifts have to first receive approval from a regulatory agency and then obtain employee consent through the company union or labor-management consultations.

But Son believes the clause’s bark will be bigger than its bite. He anticipates that the problem will be the same as for employees hired under the “job responsibility system” (meaning they are responsible for finishing tasks assigned regardless of how many hours they work and do not collect overtime).

Existing laws require working hours for people under the “job responsibility system” to receive regulatory and labor-management approval, but the system is still often abused.

Another new provision will allow overtime work to be exchanged for compensatory leave, which labor groups suspect will make it unlikely that workers are actually paid for overtime.

Part of the government’s justification for passing the revisions was to give workers who needed extra income the chance to work more overtime, Son says, but under the newly added Article 32-1 of the Labor Standards Act, employers have a legal basis for avoiding extra overtime pay by arranging compensatory leave.                                           

Son contends that while the provision may say that workers “can choose compensatory leave of their own volition,” it will in fact make it harder to collect overtime pay. Also, the amount of leave simply matches the number of overtime hours worked, without any premium normally applied to overtime compensation, putting workers at a disadvantage, Son says.

The new provisions, however, do allow compensatory and annual leave to be carried over to the following year, helping workers who want to accumulate time off to take a longer vacation.    

Tai Kuo-jung, general secretary of the Taiwan Confederation of Trade Unions, says that for people who want to take a long holiday overseas, the new rules make it easier to get away because if they are not allowed to take time off, employers will have to pay them for any unused leave.

But Tai stressed that only a minority of workers need to rely on overtime to accumulate leave, and most of them are mid- or high-income earners.   

Skepticism over ‘Labor-Management Consultations’

Some provisions of the Labor Standards Act needed to be relaxed, but whether they all had to be revised at once and whether measures supporting the changes are adequate have become major question marks.

“Workers have their misgivings because of the revisions, because only ‘labor-management consultations’ are there to protect them. Nobody believes in them,” says Hsin Ping-lung, an associate professor in National Taiwan University’s Graduate Institute of National Development. 

Hsin believes the rules on shift schedules needed to be relaxed to suit the needs of different sectors, but the revisions stipulating that changes could be made if agreed upon by labor and management lacked the key proviso “if necessary.”

“In legal terms, [adding the proviso] would have allowed workers to report the situation if they felt employers were abusing the situation. But without those two words, an approved agreement between workers and their employer will be final, meaning workers will have little recourse to protect their interests,” Hsin says.

In terms of minimum rest time between shifts, it will be set at 11 hours in principle in the future but can be reduced to eight hours under certain conditions. Hsin is concerned about this because several professional medical studies indicate that inadequate rest increases the risks of overwork and the threat to people’s health.

Employers believe that a three-shift system does not pose a threat, and they hoped for eight-hour rest periods because nine- or 10-hour intervals would require that they add manpower. To workers, however, commuting to and from work and getting a meal takes at least one to two hours, making it hard for them to get adequate rest if they have only eight hours between shifts.

Hsin contends that lawmakers should consider in the future whether or not to set a limit on consecutive days worked.  

Workers Powerless, Employers the Winners

With the revisions having been enacted, the key to implementing them in the future will depend on unions and labor-management consultations.

National Chung Cheng University’s Lan contends that because workers lack negotiating skills, an effort should be made to improve their ability to negotiate with employers.

He worries that what happened after the Labor Union Act was revised in 2011 could happen again. Back then, the Labor Union Act was amended to require compulsory union membership, but it did not stipulate any penalties for non-compliance meaning union membership has for all practical purposes remained voluntary. Similarly, there are no penalties for companies that fail to carry out labor-management consultations when required.

“But there are actually many ways companies can be forced to put such a system in place,” Lan says. 

In practice, in addition to improving the ability of workers to negotiate with employers, the problem of forged attendance records and minutes of labor-management meetings also needs to be addressed. One way to deal with those issues would be to strengthen the enforcement of existing Labor Standards Act.

Employers emerged as the winners of this latest round of labor law revisions. Ensuring that labor rights do not deteriorate further in the future will depend on whether labor’s bargaining power improves, labor-management consultations are implemented, the government can impose penalties, and labor inspections are carried out.

Translated from the Chinese article by Luke Sabatier

Edited by Shawn Chou


LABOR STANDARDS LAW CHANGES

Basic Five-day Workweek Rule: Employees are entitled to two days off per week. One is considered a “mandatory” day off, on which employees cannot work, and the other is a “flexible” day off, on which employees can work but at higher than normal overtime rates.

Current Revised
Overtime limited to 46 hours per month Overtime limit raised to 54 hours per month, but still limited to 138 hours every three months.
 / Overtime work on “flexible” days off can be converted to compensatory leave at the rate of one hour of leave for every hour of work if the employee is willing to opt for this and the employer agrees.
 / Eleven hours rest required between shifts, but that can be reduced to eight hours if approved by the government agency that regulates the particular sector and the company obtains approval from either its union or through labor-management negotiations.
Workers cannot work more than six days in a row Workers can work up to 12 days in a row if company operates in industry allowed to do so by competent authorities and its gets agreement from its employees. 
Overtime pay on “flexible” day off – 4 hours of pay for any work done up to 4 hours; 8 hours of pay for between 4 and 8 hours of work; and 12 hours of pay for between 8 and 12 hours of work. Overtime pay on “flexible” day off – pay based on actual hours worked
Workers cannot carry over unused annual or compensatory leave from one year to the next. Workers will be allowed to carry over unused annual or compensatory leave from one year to the next based on consultations between the employer and employees; employers must compensate employees for any unused leave

Additional Reading

♦ One Key to Success – No Unions
♦ How Cheap Must Taiwanese Workers Get?
♦ Is Taiwan Out of Kilter with Reality?

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好友人數