Encouraging personnel policies and regulations conducive to a knowledge-based, innovation-driven economy.
In last year’s White Paper, the HR committee had but a single issue. We urged revisions to the enforcement rules for the Labor Standards Act to exempt defined professional and administrative personnel from certain restrictions on work time and overtime compensation. Taiwan’s future prosperity will depend on its ability to be a leader in innovative, technology-intensive industries. The “knowledge workers” in those sectors demand a high degree of flexibility, and they are judged by their performance, not by the amount of time they put in.
Although the Ministry of Labor has not yet formally announced its decision, the National Development Council has assured AmCham Taipei that the kind of flexibility this Committee has been seeking will be incorporated in the Ministry’s final draft of the rules. We thank the authorities for having taken positive action on an issue of vital importance for Taiwan’s economic future.
Our new issues for 2019 are below:
Suggestion 1: Require a fixed notice period prior to a labor strike for specific industries.
The Committee urges the government to require a fixed notice period prior to labor strikes for certain categories of industries where a sudden disruption in service would have a serious negative impact on public convenience or the operation of the economy. Examples might be airlines and other public transportation, banking, and highly technical industries requiring uninterrupted operations. This measure would be an important step in modernizing the Labor Union Act.
One might argue that under the Act for the Settlement of Labor-Management Disputes, a labor union prior to a strike is required to file for labor mediation, effectively serving as an informal notice to the employer. However, having a fixed notice period before a strike is essential for certain industries where a strike may greatly affect the public’s daily life. The main purpose of the strike is to pursue better working conditions, not to cause disruptions or damage to the rights of consumers. The notice period will increase the pressure on the employer’s side to hold further discussions with the union to avert a strike.
Suggestion 2: Provide flexibility in the use of dis-patched labor for the benefit of both employees and employers.
The government has sought to spur economic growth and the development of a skilled, technical workforce by encouraging innovation among technology companies and accelerating the incubation of startups. For technology companies, the use of dispatched labor is a quick and flexible means of adding (and in some cases training) a skilled, technical workforce to handle confidential projects, meet urgent client requests, and cope with other situations where standard hiring practices would prevent a company from pursuing business opportunities.
Regardless of whether the dispatch mechanism is regulated by the Labor Standards Law or a separate Act, an effective dispatch mechanism should aim to maximize the benefits of its usage for both employees and employers.
Dispatched employees should be entitled to equal pay for equal work compared to permanent employees in the service-receiving companies. Furthermore, to ensure job security for dispatched employees, the government could consider enacting a special insurance mechanism in addition to current unemployment subsidies for extra protection of dispatched employees. Last but not least, we recommend that a special license be required for dispatch agencies in order to ensure that dispatched employees are hired and managed by qualified agencies with proper governance and protection.
If a cap is imposed on the proportion of a company’s workers that may be made up of dispatched labor, the level should be at least 20% in order to reflect business’s operational realities. If the cap is set too low, it will effectively prevent early-stage startups (most of which have very limited manpower) from utilizing dispatched labor to pursue different opportunities and take chances to grow their business. At the same time, it would dampen large employers’ willingness to increase hiring. Potential dispatched labor would have decreased opportunities to work and develop their technical skills, while business investment in Taiwan would also suffer.
An effective dispatch mechanism will also address the recent trend of offering more employment opportunities to senior citizens who wish to return to the workforce.
Suggestion 3: Adjust the approach toward encouraging employment opportunities for the disabled.
The “People with Disabilities Rights Protection Act” requires companies and organizations of a certain size to employ people with disabilities equal to a given percentage of the total number of employees. Those failing to meet the requirement are subject to penalties in the form of fines.
The Committee has several suggestions for the government on how this system might be improved:
Utilize the carrot as well as the stick by institutionalizing a program that gives public recognition or rewards to companies whose employment of the disabled significantly exceeds the required level.
Provide a grace period for compliance by companies whose growth has made them subject to the hiring requirements under the law for the first time, or have placed them in a new category with stricter conditions.
Closely work with industry and relevant NGOs to offer more government-sponsored training opportunities for people with disabilities, helping them build long-term meaningful careers by focusing on the skills in demand in the market. Some examples would be English-language ability and digital and technological skills.