The Legislative Yuan yesterday passed the third reading of amendments to the Labor Standards Act (勞動基準法) that would no longer require workers to retire at the age of 65.
Advocates from labor rights groups had called on political parties to abolish the clause on mandatory retirement at the age of 65, because many employers had exploited it by requiring their employees to retire and rehiring them under worse conditions.
Lawmakers voted to approve the amendments to Article 54 of the act, which would remove the clause requiring retirement at 65, and allow the employer and employee to negotiate on an extended retirement age, until which time the employer must still cover their employee’s labor insurance and contribute to their pension scheme.
Photo courtesy of the Taoyuan City Trade Union Federation
Ministry of Labor officials supported the move, as Taiwan is expected to become a super-aged society next year, has a dwindling birthrate and its available pool of workers is shrinking, leading to a tight labor market with many sectors unable to fill their staffing needs.
“Employers must not treat workers who choose to continue working past 65 differently, and offenders can punished with a fine of up to NT$1.5 million” (US$46,052), the ministry said in a statement yesterday.
“Some workers who are aged 65, such as those who have insufficient income from labor insurance and their retirement pension, still need a wage, and would want to continue working,” Taoyuan City Trade Union Federation secretary Lin Chuang-chou (林莊周) said.
However, “if the employer held a dominant position in the negotiations, then the employee is still at a disadvantage,” he said.
“Employers often require the worker to retire first, then rehire them, but with reduced pay and under less favorable conditions. Most of time, the worker had to accept the employer’s offer, or they would not have a job,” Lin said.
“The amendments are welcomed by both sides ... but original provisions under the labor law already provided room for negotiations between the employer and employee to extend their retirement age, should both sides agree. So, the approval by lawmakers is more of symbolic move,” Lin said.
It still does not solve the more difficult issues such as when both sides negotiate other working terms, he said.
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