After months of confrontation, withdrawal in protest from the New Power Party and opposition from the Chinese Nationalist Party in the legislature, amendments to the Labor Standards Act — the second round since May 2016 — were passed by the ruling Democratic Progressive Party-led Legislative Yuan on Jan. 10. Alison Hsiao explains what the new laws entail.
Amendments to the Labor Standards Act have been the object of heated debate since President Tsai Ing-wen assumed office in May 2016. During her election campaign, Tsai had proposed “six major labor policies” — reducing total working hours, reversing the trend of low wages, supporting employment for all generations, legislating protections for individuals with atypical work, guaranteeing protections against overwork and occupational injuries, and shaping a fair employment relationship. Since her inauguration, people have closely monitored and tracked how well her administration has done to make good those promises.
With Taiwan’s economy faltering, the wealth gap widening, wages stagnating for nearly two decades and a work environment that had not changed for several years, the need for reform was evident and especially welcome among the younger generations.
Amid partisan disagreement, on Dec. 16 last year the Democratic Progressive Party (DPP)-led legislature passed amendments ensuring “one mandatory day off and one flexible rest day” every seven days (which labor rights groups protested were compromised by the reduction in the number of national holidays by seven). The new law also increased overtime pay for work on rest days and added annual leave days for younger employees with relatively few service years. (See Table 1 below)
On the anniversary of President Tsai’s inauguration, the Ministry of Labor conducted a “self-examination,” declaring that the administration has been making good progress in carrying out labor reform and calling the “one mandatory day off and one flexible holiday” measure “the most evident implementation of the administration’s pledge to lower working hours.”
Amendments to the amendments
The measures nevertheless met strong opposition from business leaders and those who claimed that the strict limitations set by the law deprived workers of the right to work more hours to earn overtime pay.
After Premier William Lai was sworn in, the Executive Yuan began mulling a response in September to the complaints concerning the “inflexibility” of the new rules by again amending the Labor Standards Act. On Nov. 9, it approved a series of proposed amendments that give more flexibility to various types of businesses.
The Legislative Yuan had since become a hotspot for protests outside and scuffles within. But still this did not stop the legislative committee from ramming through the review of the amendments on Dec. 4, sending them to the legislative floor for discussion and cross-caucus negotiations.
On Dec. 23, thousands of labor group and NGO members, activists and students took to the streets, raising placards which read “exhausted” and “end overworking” while accusing the ruling party of making an “about-face” and “betraying labor.” The protest occurred two days after the Cabinet called a press conference stressing that the revisions were made for exceptions, applicable only to industries or businesses that require flexibility and whose exemptions are approved by the government. Quoting a study conducted and published by the National Development Council (NDC) in cooperation with the Chung-hua Institution for Economic Research (CIER), in which both manufacturing and non-manufacturing industries have claimed that the “one mandatory day off and one flexible rest day” measure has negatively affected their operations and costs, Cabinet Spokesperson Hsu Kuo-yung underlined that the new amendments are to “both increase workers’ pay and facilitate a better operational environment for the businesses.”
An extraordinary legislative session was called for and began on Jan. 5 as the regular legislative session had ended on the last working day of 2017. The New Power Party (NPP) caucus, at the end of the first day of the extraordinary session, blocked the entrance by locking the doors of the legislative floor chamber with iron chains, while Chinese Nationalist Party (KMT) lawmakers, who reportedly also had planned to occupy the chamber, taking actions by stationing themselves outside the chamber with hundreds of amendment motions in an attempt to prevent DPP lawmakers from proposing the Labor Standards Act amendment bill. After the blockade ended 160 minutes later, the NPP legislators moved to the plaza in front of the Presidential Office and started a hunger strike.
On Jan. 8, civic and labor groups again protested outside the Legislative Yuan to pressure lawmakers, with some taking radical actions in hopes of raising further public attention. The NPP caucus, after being evicted from the front plaza of the Presidential Office in the early hours of the same morning, returned to the legislature but withdrew from the cross-caucus negotiations in protest.
‘Four Unchanged rules and Four Flexibilities’
On the afternoon of Jan. 9, the Legislative Yuan embarked on an 18-hour voting marathon. Legislators from the KMT staged a sit-in in the chamber, wearing headbands and spreading banners that read, “death of labor rights” and “shame of democracy,” while the NPP lawmakers walked out of the chamber all together and declared they would not to participate in any floor discussion and voting regarding the labor law.
The third reading of the amendments was completed on Jan. 10, giving flexibility for negotiations between unions and company management (between workers and management if no union exists) on matters regarding an overtime cap (the rule of 46 hours per month can be extended to 54 hours, although the three-month total of 138 hours remains unchanged), “one fixed day off and one rest day every seven days” (the rule stays but which day should be the fixed day off within the seven days can now be decided through union-management negotiations after government approval for some industries), and the hours of rest between shifts (11-hour-rest is the norm but exceptions could be made to reduce the rest hours to 8 and no less after union-management negotiations and with government approval). (See Table 1 below)
Also unchanged from the 2016 version of the amendments is the 40-hour workweek and overtime pay on rest days.
According to the government, the amendments provide more flexibility with regards to overtime, work schedule arrangements, shift arrangements and annual leave usage.
After passage of the bill, Minister of Labor Lin Mei-chu said the rules are the rules, and that the “exceptions will definitely not become the rules.” Lin was responding to widespread fears that the “flexibility” given to certain industries under certain conditions could result in misuse and exploitation. “The intervals between workers’ rest are not to be reduced without government approval following applications for flexibility and exceptions,” Lin said, adding that the ministry would flesh out supporting measures and mechanisms for curbing violations before March 1, the day the amendments officially take effect.
Table 1 Labor Law Amendments
*Before the 2015 40-hour workweek amendment, many were already enjoying two-day weekends because the MOL had made an interpretation of the law in 1998 allowing employers and employees to reach an agreement on swapping “not working the 4 additional work hours every two weeks under the ‘84 hours for every two-week period’ model” for not having days off on the following seven holidays: January 2 (an extension of the New Year’s Day holiday), March 29 (Youth Day), September 28 (Teachers’ Day), October 25 (Taiwan Retrocession Day), October 31 (Chiang Kai-shek’s Birthday), November 12 (Sun Yat-sen’s Birthday), and December 25 (Constitution Day). But not all employers adopted the swapping measure. **Government approval required *** When the compensatory/annual leaves are not used up, employers are still required to pay accordingly.