New amendments to the Labor Standards Act (LSA) rubber stamped by the Executive Yuan last Thursday (Nov. 9) sliced open class divisions in Taiwanese society, pitting workers and their unions against corporate interests.

The new amendments, drawn up by a team led by Premier William Lai (賴清德) and now submitted to the legislature for review, are a necessary tonic in light of widespread discontent among employees and their bosses over the last round of changes, introduced just a year ago. The amendments are expected to pass the Legislative Yuan, in which the Democratic Progressive Party (DPP) holds a majority.

The changes offer flexibility for both employees and their bosses, while tweaking how overtime pay is calculated in a bid to ease the cost burden on businesses.

But the government has also crumbled in the face of corporate lobbying and eliminated necessary protections for shift workers in particular. In doing so, President Tsai Ing-wen (蔡英文) has failed to uphold her presidential campaign commitment to protect labor rights.


Credit: David Green

At a protest outside the Executive Yuan, Solidarity Labor Union secretary-general Huang Yu-te (黃育德) leads chants of “fight against the Labor Standards Act amendments”, calling attention to problems related to changes to overtime rules.

It is telling that the DPP legislators behind the changes proposed the amendments, though speeches, announcements and in parliamentary debates, as economic reforms rather than as addressing worker rights, as was the case with the last round of amendments in December 2016.

“The DPP faced strong pressure from corporations,” said Kuomintang (KMT) legislator Wayne Chiang (蔣萬安). “We have long-standing problems of insufficient industry space, water and electricity supply, as well as a lack of talent and workers. Since the DPP assumed office, they have found it difficult to insist on pro-labor policies, and even stopped some of their pro-labor legislators attending meetings on this issue.”

Making the best of a bad situation

The pro-labor 2016 amendments ensured that employees can enjoy a five day work week of no more than 40 hours with one fixed day of rest and one flexible one, a system known as "one fixed day off and one flexible rest day" (一例一休), with overtime payments due if employers compel staff to work on the flexible day.

Complaints about the 2016 changes focused on an inflexible cap on monthly overtime at 46 hours, which limited the ability of those in the agriculture and tourism industries in particular to work more intensively during peak seasons.

The revisions address this problem by introducing rules limiting overtime to 138 hours over a three-month period, but allowing up to 54 hours in a single month – keeping average time worked at 46 hours per month. This has had the effect of making no-one happy, with workers unions complaining that the change leaves employees vulnerable to overwork and business groups suggesting they are insufficient to address the seasonal work issue.

“I hate to say it but maybe it’s a good thing that nobody is totally happy,” said John Eastwood, Partner in the Taipei office of law firm Eiger. “Labor and management are on different sides and nobody can get everything they want.”

The changes have received a cautiously optimistic welcome from most business groups, including the British Chamber of Commerce (BCC). Its Executive Director Steve Parker said: “The BCC in Taipei supports the various reforms, while at the same time understanding that for economic development to continue in Taiwan there needs to be a balance between the needs of commerce and the workers that are vital to that commerce. We support any changes that understand there is no ‘one size fits all’ solution and that the needs of different industries may require flexibility in labor conditions to recognize those differences.”

Eastwood noted that the changes do offer more flexibility for both sides, picking out software development and management consultancy as two roles that often require employees to put in intensive work stints.

Criticism has also been leveled at the 46-hour monthly average rule for being too complicated, costly for employers to keep track of and unenforceable by government regulators.

"The government said this change is in line with European standards but it doesn’t have the supporting measures that are used in Europe,” said Chinese Culture University Department of Labor Relations associate professor Lee Chien-hung (李健鴻). “The government’s inspectors will have trouble checking every three months. In practice, the overtime hours will exceed the maximum permitted by law because the government cannot effectively regulate it.”

Eastwood suggested this should not be a problem as employers are obligated to keep accurate work records for their employees for a period of five years under rules introduced in January 2016.

Businesses also complained that the 2016 rules lifted their costs, according to Lee. “Surveys show that in the past year, 30-40 percent of employers have said that the new labor law, which requires them to pay workers four hours wages for one hour of work on rest days, has increased their costs. As a result, they tend not to have workers work on rest days; thus workers that need the money are affected.”

Under the new rules, overtime calculations are to be made hourly in order to rectify the issue of outsized overtime claims, but in so doing eliminates a disincentive for employers to oblige their workers to put in overtime in the first place. Eastwood inferred this may not necessarily adversely affect workers:

“Money-wise, there’s a point where the employer has to consider: 'Should I just add one more headcount? Why am I paying so much overtime?’ It becomes economic and a way that the government can push a company to watch out for how much overtime they are clocking up.”

Longer shifts, less rest

If the changes had been limited to these two provisions, both of which appear sensible in their own right, opposition may have been muted. Instead, the government has pushed too far the other way and kowtowed to big business.

The most egregious example of this is shortening the mandatory rest time for shift workers to eight hours from 11 hours, and cancelling the compulsory rest day (usually Sunday) that was the cornerstone of "one fixed day off and one flexible rest day”.

Polls suggest that workers are most concerned about amendments to overtime rules, with three-quarters of employers saying they are worried the changes will adversely affect their health and quality of life, according to an online poll conducted by recruitment website 1111 Job Bank. The survey also suggested that more than half of workers regularly put in more than the 40-hour work week (reduced from a maximum of 84 hours over two weeks under the 2016 LSA amendments), working an average of a little over 11 hours overtime.

“The shortened rest hours will severely affect the health of the shift workers also the safety of the public as many of the shift workers are cargo drivers or nurses,” said KMT legislator Chiang, noting that earlier this year, a bus accident caused 33 deaths due to an overworked bus driver who had worked for two weeks consecutively.

Taiwan has the sixth-highest working hours in the world last year, according to Chiang, behind both Singapore and South Korea but without the income growth that either of those two countries have enjoyed.

Opposition to the shift timing changes was also the focus of a protest that drew several hundred representatives from worker unions to the gates of the Executive Yuan Nov. 9 as the cabinet prepared to submit the amendments to the legislature.

At the protest, Bob Liu, 42, a vice captain and council member of the China Airlines union, said the shift time reduction would take a physical and psychological toll. “This will take us back to the same situation we had two years ago, when flight attendants were exhausted,” Liu said. "Imagine, you finish work at 2 a.m., go home, don’t eat, take off your clothes, shower and sleep. Then after a few hours, you’re back on, feeling dizzy. Nobody can take that. That’s why there was a [China Airlines] strike in the middle of last year.”

The amendment also allows employees to work 12 days in a row in between mandatory days off, though businesses proposing to implement this system must obtain consent from the government agency regulating the industry, as well as approval from the Ministry of Labor, while private companies must first secure consent from workers or labor unions.

Liu said that as China Airlines is state-owned, this provision is insufficient to protect its workers. “The government says the workers can negotiate with their company and hold meetings but in our experience these meetings are fruitless,” Liu said. “Workers don’t know who will stand up for them — especially those without a union.”

Others at the protest were less diplomatic: “When Tsai became president, she said she felt workers rights were weakly protected and she would do her best for them. That’s bullshit. We expected more,” said Kurota Yuuji, a PHP engineer who works at an SME in Taipei.

What now?

Chiang and the KMT caucus have made opposing the eight-hour rest rule a key element of their opposition to the draft amendments, which are now up for discussion among lawmakers. The caucus supports a draft change that allows annual leave to be carried over into the following year, rather than be swapped for cash, as it safeguards the purpose of leave, which is to allow workers to rest.

The New Power Party is also strongly opposed to the LSA amendments and issued a press release illustrating sleight of hand in the way the changes have been presented.

Asked if there is any chance of the bill being revised to account for the union and opposition concerns about the bill, Chiang said: “Likely not. The DPP is determined to pass the bill. Last year’s LSA reform was passed amid opposition from public, the KMT and also within the DPP. The DPP used their majority advantage to pass it.”

Will the changes lead to widespread revisions in workers’ contracts? Eastwood suspects this is unlikely, but there will be updates to company work rules, which will then be presented back to employees.

“The LSA provides a basic floor for worker rights. If there is a provision in the contract or work rules that runs contrary to that, then that is going to be read as not applying,” Eastwood said. "A lot of contracts will not be specific about overtime. They will say your normal working hours and lunch break, they are very vague about the rest – and that it will be covered by the LSA.”