CLA says financial workers qualify for compensation

The Council of Labor Affairs concluded yesterday that the Labor Standards Law (勞基法) applies to the Ministry of Finance's plan to reform the financial institutions of farmers' and fishermen's associations, even though the ministry doesn't agree.

"Since the Central Deposit Insurance Corp [CDIC, 中央存保] usually takes over such financial institutions without warning, we think that the corporation should deal with the labor issues [involved] by following the Labor Standards Law," said Lee Lai-chi (李來希), director of the council's Labor and Capital Department.

Under the law, employers must pay compensation to workers who are dismissed because of downsizing or layoffs that results from a corporate merger.

To resolve possible labor dis-putes that could be caused by ministry's reform plan, the council held a conference yesterday with ministry representatives to discuss the principles for dealing with the employees of the associations' financial institutions.

Under the ministry's financial institution reform plan, the CDIC is required to retain the employees of financial institutions that have been taken over for a six-month period in order to ensure a smooth business transition, but no compensation payments are made to employees let go after that period.

The ministry believes that such employees should be considered temporary workers during the six-month transition period, therefore the CDIC is not be required to follow the Labor Standards Law regarding compensation and other layoff policies.

"Many of employees complained that they were not doing temporary work during the six months. Based on [previous] cases like that, we think that the CDIC should follow the Labor Standards Law in granting compensation for dismissals," said Wang Hou-wei (王厚偉), a council official.

In an effort to resolve their disagreements and formulate a clear guideline on the reform plan issue, the ministry and the council plan to hold more conferences in the coming weeks.

Disputes between labor and capital are becoming more frequent as more of Taiwan's banks and financial institutions merge. Most of the institutions that have merged so far have refused to pay compensation to laid-off workers.

Last month the ministry announced its plan to overhaul the financial institutions of farmers and fishermen's associations because of their high non-performing loan ratios. More than 30 of 200 of these institutions are expected to be taken over by the CDIC in the coming months.

The ministry's plan has been attacked by former president Lee Teng-hui (李登輝), the oppositions parties and many of the associations' managers and employees.

Relations between President Chen Shui-bian (陳水扁) and Lee were reportedly frayed because of their differences on the issue.

Last Tuesday, more than 300 representatives from the associations converged on the Legislative Yuan to back their demands that Minister of Finance Lee Yung-san (李庸三) resign.