Labor groups yesterday petitioned the government to delay its labor pension plan, fearing it would lead to older workers being laid off.
The Association for Middle Aged and Senior Employment and the Taiwan Unemployment Union submitted the petition at the Executive Yuan in the hope of having its introduction postponed from next July.
PHOTO: CHIANG YING-YING, TAIPEI TIMES
The groups urged the government to delay the plan until the unemployment rate falls under 3 percent, or the number of unemployment falls below 300,000 or the number of unemployed among middle-aged or senior citizens falls to 40,000.
According to the Council of Labor Affairs plan, once an employee reaches 60 after working for at least 15 years, he or she will receive a pension via monthly payments.
For employees who reach 60 but who have worked less than 15 years, the pension will be paid out in a lump sum.
The plan also requires employers to set aside 6 percent of an employee's salary for a pension account for the employee.
"Salary cuts, lay-offs and outsourcing are the tactics that will be used by businesses to combat this new pension plan," association president Hsiao Chung-han (蕭忠漢) said. "Workers who are middle-aged or elderly expect to be paid more because of their seniority. This new plan is therefore detrimental to the 3 million elderly who are unemployed."
Hsiao said that as many as 90 percent of businesses have not set up a pension plan for their employees' retirement.
"Before the new pension is introduced, senior employees who are unable to collect their pension payments will be able to keep their jobs. But once it has become a reality, they are going to suffer," Hsiao said.
Employees' fears of losing their jobs because of the plan were reflected in a survey released yesterday by an online human resources agency.
Around 64 percent of employees said they were worried about their salaries, while 48 percent said they were afraid of job cuts, the 104 Job Bank said, citing its poll of 1,633 job seekers in 836 companies between July 21 and July 26.
But the plan also concerned the nation's employers, with about 70 percent of those polled wary of decreased competitiveness, the poll said.
"Companies with over 1,000 employees could see an additional NT$30 million in annual labor costs under the new system," said Grace Chen (陳寧欣), human resources director at ViewSonic Corp's Taiwan branch.
To help cut costs, some companies have already decided not to offer salary increases or else to trim benefits and bonuses, Chen said.
In addition, the rate of staff turnover may shoot up to 35 percent from the current 15 to 20 percent after the system becomes effective, she added.
Between 5 and 10 percent of small and medium-sized enterprises may close as a result of increased labor costs brought on by the new system, which would not pose much of an impact on the nation's labor market, 104 Job Bank chairman Rocky Yang (楊基寬) said.
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