About 8,000 members of the Chunghwa Telecom Workers' Union (CTWU) took to the streets on Aug. 16 to demand better treatment for the company's employees after its privatization.
The union made two major demands: salaries should not be cut and employees should not be forced to retire before the age of 65 after the company is privatized. The government agreed to set up a special task force to handle negotiations with the union, preventing further complications and delaying the conflict until the end of the month.
Chunghwa Telecom (
Guaranteeing the civil servant status of employees and making salary promises will be like quenching your thirst with poison. The move may resolve the immediate crisis, but it will become a tombstone for Chunghwa Telecom over the long term. To privatize the company, the government has put more than NT$100 billion into early pension payouts as well as civil servant and labor insurance subsidies. This is supposed to be the price for ending the civil servant status of Chunghwa employees. After accepting the payouts and subsidies, they should in effect become employees of a private company, where their value will be determined by their competitiveness in the market and their ability to create revenue. They will be paid well when the company makes money, and they will get pay cuts and even layoffs when the company loses money. These are the rules of the game in the private sector.
The labor union's demands amount to going after the benefits of both a private company and a state-run company. Chunghwa Telecom, already in a parlous state, can in no way compete with private companies if it has to shoulder these super-heavy financial burdens plus an aging staff. A concession by the government now will mean a death knell for the company. Giving in to unreasonable demands from employees will also alarm foreign investors to Chunghwa's abnormal labor-management relations, creating a major disadvantage for Chunghwa's upcoming share release.
It is only normal that the CTWU fight for the working rights of its members. The workers' rights, however, are not the only things at stake in Chunghwa's privatization. We also need to consider the interests of all Taiwanese people, the future of Chunghwa Telecom, and the government's overall privatization program. Currently, Chunghwa is still a state-owned company, which means it is an asset of the entire citizenry. Lowering the price of its stock offering or allowing a handful of people to grab the stock will result in losses for the entire citizenry. The government has the strict responsibility to prevent these scenarios.
Chunghwa Telecom is the first in a long line of state-owned companies to go private. The government must consider the impact of its overall privatization policies before it agrees to the CTWU's demands because other state-run companies will certainly follow suit with similar demands when their turn comes to privatize. The government has the responsibility to be firm on principles and set a good precedent with Chunghwa's privatization. Otherwise, it may have to face a domino effect of negative consequences.
Vincent Lin is assistant editor in chief of the Taipei Times.
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