Wed, Jan 09, 2013 - Page 1 News List

Premier defends Shih in bonus row

OUT OF TOUCH:Lawmakers were demanding that the economics minister be replaced for proposing hefty bonuses for workers at loss-making state-owned firms

By Shih Hsiu-chuan  /  Staff reporter

Labor union representatives from more than 20 state-owned enterprises yesterday raise their fists at a press conference in the legislature in Taipei to protest against cuts in performance bonuses.

Photo: Chien Jung-fong, Taipei Times

Premier Sean Chen (陳冲) yesterday appealed to lawmakers to give Minister of Economic Affairs Shih Yen-shiang (施顏祥) more time to carry out his policies.

“He has plans in mind and he has started to put them into action. [We need to] give him time to implement his policies,” Chen said in response to calls from lawmakers across party lines for Shih to step down after disputes broke out over bonuses for workers at state-owned firms.

Lawmakers on Monday set a bonus cap of 1.2 months’ salary for employees of state-owned firms — slashing the Cabinet’s proposed bonus of up to 2.6 months’ salary — adding that bonuses would only be distributed if the company finished the year with a surplus.

The cut applies only to bonuses based on the company’s performance, which are distributed during the Lunar New Year. State-owned firms also give out job performance-based bonuses.

Compared with the Cabinet’s proposal, the bonus reduction could save the nation NT$28 billion (US$964.7 million).

The move by lawmakers came after Chen on Friday approved a proposal to award workers at five state-owned firms administered by the Ministry of Economic Affairs company bonuses equivalent to 4.6 months of wages, despite a public outcry.

Late last month, Shih decided that workers at the state firms would be awarded the following company bonuses: CPC Corp, Taiwan (CPC, 台灣中油), 2.6 months of salary; Aerospace Industrial Development Corp (AIDC, 漢翔航空), 1.88 months; Taiwan Power Co (Taipower, 台電), 1.65 months; Taiwan Water Corp (TWC, 台灣自來水), 1.46 months; and Taiwan Sugar Corp (Taisugar, 台糖), 1.31 months.

The size of the bonus for CPC workers was increased to 4.6 months after Chen decided that employees of CPC, AIDC, TWC and Taisugar would also receive a job-performance bonus equivalent to two months’ salary and 1.8 months’ salary for Taipower workers.

Ministry data showed that in 2011, CPC posted a deficit of NT$32.4 billion, Taipower a loss of NT$43.3 billion and TWC a deficit of NT$367 million. AIDC and Taisugar both reported profits that year, of NT$1.1 billion and NT$5.5 billion respectively.

At a cross-party negotiation meeting on Monday to discuss proposed budget cuts for this year, lawmakers decided that workers at loss-making state-owned firms would not receive a company bonus, and those at profit-making ones would get a bonus equivalent to no more than 1.2 months of salary.

Lawmakers also demanded that Shih be replaced, saying he had been indifferent to the public’s suffering with his decision to give out hefty bonuses.

In response to the bonus cut, Chen said that he respected the lawmakers’ decision pursuant to the legislature’s authority.

However, he expressed concern that such a policy would make it hard for state-owned firms to recruit or retain talent.

Chen added that workers at state-owned enterprises usually receive less pay than their counterparts in the private sector.

Upset at the bonus cap, representatives from about 20 state-owned enterprises’ unions lodged a protest in the legislature yesterday afternoon.

The group said that without setting a rational standard for deciding bonuses, the cap on performance-based bonuses would not only affect employee morale, but also the overall performance of the companies.

Separately yesterday, President Ma Ying-jeou (馬英九) expressed support for pension reform in state-run companies.

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