Thu, May 08, 2003 - Page 10 News List

SARS could force layoffs

LABOR CATASTROPHE One of the hardest-hit and most helpless victims of SARS will be employees of Taiwan's travel industry

By Joyce Huang  /  STAFF REPORTER

Taipei City may see a series of mass layoffs within the next two months as debilitated employers try to survive a slide in revenue caused by the outbreak of severe acute respiratory syndrome (SARS), a Taipei City Government official warned yesterday.

"In addition to the tourism sector, over 60 percent of [the city's] industries have been negatively impacted by the disease," said Guo Jyi-i (郭吉一), director of the Taipei City Government's employment service center.

"Many of them have come to me for advice on mass layoffs in order to survive the SARS-triggered economic downturn," Guo said.

He refused to elaborate for fear of panicking the nation's labor force.

This week, the city approved applications filed by over 200 unemployed staff from 17 travel agencies for unemployment compensation for last month alone.

The city's as well as the nation's unemployment problem may quickly deteriorate within the next two months should the tourism-related industries fail to recover soon, Guo warned.

Urging businesses not to lay off employees without 60-day's advance notice, Guo yesterday further reminded employers of their social responsibilities in compliance with the new Mass Layoff Protection Law (大量解雇保護法), which went into effect yesterday.

The law stipulates that companies with under 30 employees that plan to axe more than 10 staff and companies with between 30 and 500 employees that are looking to cut more than a third of its workforce submit a plan to the Council of Labor Affairs and local government labor affairs departments 60 days in advance.

Companies that fail to do so will be fined between NT$100,000 and NT$500,000.

Calling the law "harsh," Tseng Sheng-hai (曾盛海), chairman of the Taipei Association of Travel Agents (TATA, 台北旅行公會), yesterday said that the tourism sector is facing its largest financial challenge to date, and that penalties should not be imposed if closures and bankruptcy prompt sudden layoffs.

"Only a dictatorship would inflict punishment on a failing business as a result of a natural disaster," Tseng said.

Mass layoffs will be inevitable if the survival of businesses is threatened, he said.

According to Tseng, the nation's 2,400 travel agencies plan to layoff employees "big or small, depends on their vulnerability to the economic downturn triggered by the deadly disease" while some hoteliers are encouraging their staff to take unpaid leave.

Caesar Park Taipei (凱撒飯店) has asked its 500 employees to take a four-days unpaid leave per month on a rotational basis after occupancy rates dropped to 20 percent from 80 percent last April according to assistant public relations manager Amy Chen (陳怡靜).

Taking sides with industry, Day Sheng-tung (戴勝通), president of the National Association of Small and Medium Enterprises (中小企業協會), yesterday said the law is out of touch with the realities of doing business since the government won't be able to collect penalties if businesses go belly up.

He, however, expressed hope that no businesses had to resort to layoffs in order to survive.

"To alleviate the nation's unemployment, the government should allocate public funds to help SARS-hit businesses retain their employees," Day said.

He yesterday suggested the government divert its NT$3.3 billion fund -- part of the NT$20 billion job-creation project -- to subsidize SARS-hit businesses with employee salaries in lieu of layoffs.

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