While Premier William Lai (賴清德) at a breakfast meeting with business leaders on Tuesday last week urged companies to raise salaries, Taiwan Semiconductor Manufacturing Co (TSMC) chairman Morris Chang (張忠謀) said that salaries should be left up to a free labor market.
Although TSMC’s salaries are not a cause for concern to the government, lawful corporate governance is a basic social duty for companies, and Lai should remember that whether companies raise salaries is something that the government is legally empowered to monitor.
The Company Act (公司法) was in May 2015 amended by adding Article 235-1, the first sentence of which reads: “A fixed amount or ratio of profit of the current year distributable as employees’ compensation shall be definitely specified in the Articles of Incorporation.”
This regulation aims to resolve the problem of low wages, but it only talks in terms of “shall,” without imposing any penalties, thus letting employers off the hook. Consequently, not many companies pay their employees a fixed amount or ratio of the profit as compensation, as the article requires.
TSMC is a good company, with Articles of Incorporation that say: “Before paying dividends or bonuses to shareholders, this corporation shall set aside ... not less than 1 percent [of its annual profits] as profit-sharing bonuses to its employees.”
While setting the bonuses at not less than 1 percent of annual profits, TSMC still makes employees’ profit-sharing bonuses subject to a majority vote by its board of directors — which does not meet the standards of good corporate governance.
If this is the case at TSMC, what hope is there for the salaries at other companies?
Taiwan does not value labor highly and is not willing to recognize workers as social partners, as Germany does. Unlike Germany, Taiwan does not allow workers’ representatives to stand on an equal footing with those representing employers and the government to negotiate commodity prices and wage policies or discuss financial issues such as income distribution.
Hence, the premier is seen discussing salary and investment matters at a breakfast meeting, with no regard to the frustrations encountered by those who work hard for low wages.
Taiwan could follow the example of Germany’s “free economic system with social justice” by constructing a comprehensive economic, social and legal framework to guarantee workers’ rights to rest, recreation, vacations, educational development and cultural participation.
This enables employees to understand their companies’ production and operation situations and monitor how their companies are implementing laws that affect employee rights and interests.
Amendments were made to the Labor Standards Act (勞動基準法) at the end of last year and went into effect at the beginning of this year.
However, employers have obstructed the changes and avoided implementing them by forcing the central government to give them “guidance” time and then pressing for new amendments. This obstruction has left local governments at their wits’ end, while ordinary people suffer the consequences.
The end of the year is approaching, with new amendments to the Labor Standards Act yet to be enacted, but Lai has said that the last set of changes regarding weekly rest days can be amended again.
If the Ministry of Labor cannot make comprehensive and practical plans regarding the Labor Standards Act, the shoddy legal system will continue to leave workers feeling confused and helpless.
Lin Terng-yaw is a lawyer.
Translated by Julian Clegg
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