Sat, Jan 14, 2017 page8

• Firms need to pre-empt labor laws

  • By Chiou Jiunn-yann 邱駿彥
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  The enactment of amendments to the Labor Standards Act (勞動基準法), which came into force on Jan. 1, has introduced a package of measures that moves Taiwan closer to a mandatory five-day workweek. It will take some time for the country to adjust to the new system. Since the “one fixed day off and one flexible rest day” — or yili yixiu (一例一休) — rule became effective at the beginning of the month, it has become a target for criticism by the public.

  Irrespective of whether businesses say they have found it difficult to respond to the new legislation, the only real impact is an increase in the administrative workload of their human-resources departments. Despite this, everyone is heaping blame on to the “one fixed day off and one flexible rest day” system.

  Critics have lambasted the government for implementing a muddled set of measures, attacked the new system for being a bad law that fails to satisfy the requirements of employers and employees — and some have even condemned the five-day workweek as the prime cause of recent price increases.

  Is it really true that yili yixiu is the main reason behind the increased prices? Or is it being used as an excuse by businesses to jack up their prices?

  The public should reflect upon this and the media must work to uncover the truth, rather than simply parroting the words of others.

  According to Ministry of Labor statistics, at the beginning of 2015 an average of 54.17 percent of Taiwan’s manufacturing industry was already on a five-day workweek and, in the case of the electronics industry, the figure was as high as 86.62 percent.

  Additionally, an average of 48.93 percent of Taiwan’s service industry had already implemented a five-day workweek, with the financial and insurance industries averaging 98.23 percent — in other words these industries had some time ago already implemented “one fixed day off and one flexible rest day.”

  The transportation and warehousing industry averaged 62.94 percent, while wholesale and retail averaged 55 percent. Finally, 53.62 percent of the real-estate sector was already on a five-day workweek.

  From these statistics it is obvious that it is somewhat questionable to claim that the introduction of the five-day week has inflicted a big shock on each of Taiwan’s trades and professions. The figures clearly show that prior to Jan. 1, more than half of Taiwanese companies had already implemented a system of two rest days per week. Furthermore, many small and medium-sized companies — which make up 97 percent of all Taiwanese businesses — have already become accustomed to a five-day week; it is not just the big corporations.

  Therefore, strictly speaking, only a little over 40 percent of Taiwanese businesses were affected by the amendments. The only impact has been on employers, who have found it inconvenient to pay their employees overtime if they have to work on their day off, while the overtime pay is relatively high.

  What is the reason for the implementation of a two rest day system? Some readers might already be familiar with statistics from the Organisation for Economic Co-operation and Development, which ranks Taiwan as having the third-highest working hours worldwide: as high as 2,140 hours per year. In comparison, South Korea ranks fourth, with their workers clocking an average of 2,090 hours per annum.

  Officials should take note of the recent reduction in annual working hours in South Korea: Over the past five years, 216 hours have been shaved off annual working hours. During the same period, Taiwan has only managed to reduce its average annual working hours by 25.

  If Taiwan does not work faster to bring down annual working hours, the combination of long hours and low salaries will inevitably reduce morale within the workforce.

  As for companies that have been complaining about the new workweek rules pushing up wage costs and causing other problems, the likely driver of increased costs — which has had a knock-on effect upon prices — is actually the adjustment of the hourly minimum wage from NT$126 to NT$133 and the monthly minimum wage from NT$20,008 to NT$21,009. In addition, labor and national health insurance contributions have also been adjusted upward.

  The only real effect the workweek rule changes has been to increase the administrative workload of companies’ human-resources departments. If the owners of these companies fully understood the range of measures provided for according to the act, they would use flexible working hours as a way to deal with the changes to the act and understand that this would actually benefit both their company and their employees.

  Regarding the partial amendment to working hours within the act, the legal rules are clear. The implementation of any new system will inevitably create unforeseen problems, many of which will force companies to perform a balancing act and operate on the edge of the law.

  Given all these problems, it is regrettable that the Labor Standards Act has been interpreted as a “Labor Conformity Act” by Taiwanese companies.

  So many employers already take the attitude that they only need to comply with the act, without realizing that its provisions are only the most basic of standards. Employers and employees should strive to surpass and improve upon the act.

  If the government wishes to foster better employer-employee relations, instead of simply passing judgement on whether a company has broken the law, it should focus on how many companies are actually exceeding the basic requirements of the law.

  If the majority of companies can improve upon the conditions set out in the act, it would not matter what further revisions are made — it will be of no concern to the vast majority of companies if they have already taken the initiative to improve conditions for their employees. Then there will be no need for them to rack their brains over how to comply with amended legislation.

  The government must strike out in a new direction with its labor policy. It should encourage businesses to do better than the Labor Standards Act, rather than simply aim for compliance.

  Chiou Jiunn-yann is a professor at Chinese Culture University’s College of Law

  Translated by Edward Jones
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