Tsai Ing-wen's Labor Policy Proposal: Rescue our Workers - Ensure Job Security

On Dec. 8, DPP Chair and Presidential Candidate Tsai Ing-Wen outlined her labor policy titled “Rescue our Workers - Ensure Job Security”. Chair Tsai said the main four recommendations included in her proposed labor policy are: (1) introducing first-time job seekers allowance, (2) ensuring higher rates in unemployment benefits, (3) implementation of short-term allowance for forced unpaid leaves workers, and (4) banning government agencies from hiring dispatched workers.

The labor policy, she said, originated from the DPP’s 10 Year Policy Platform’s “New Labor Policy” Chapter, in which it is proposed for Taiwan to seek an employment-oriented economic policy. These recommendations advocate tackling the global recession with a focus on the local economy and fight unemployment, while addressing increases in salaries and protection on labor rights.

Due to the current global recession, the people of Taiwan have been faced with these major job security issues:

• Unemployment - people who are willing to work cannot find suitable employment
• Unpaid leaves - a large number of employees are required to take unpaid leaves of absence considered as extra vacation time.
• Atypical workers - people, although having jobs, work with weak social protection.

All of the above represent the current problems our workforce is facing. What is worrisome is that the European debt crisis is set to pose severe challenges to Taiwan due to the effects it would bring on our export market. The increase in unemployment, decline in the economic outlook and stock market index, and the shrinking labor market and export orders are all signs that will cause upcoming hardships for our labor force.

In such times of economic turmoil, Chair Tsai has proposed a labor policy that not only aids the unemployed workers, but also prevents employees from being faced with declining salaries. Therefore, Chair Tsai’s four-point policy is set to strengthen our labor force.

Here is a brief explanation on the four propositions:

1. Introducing first-time job seekers allowance

First-time job seekers now accounts for approximately 21% of jobless workers. These total 104,000 new unemployed workers, and having never registered for the employment insurance, are not classified to receive unemployment benefits, therefore having to rely on family members for financial support.

The government is responsible for helping them sustaining a basic living before finding their first-time jobs. Developed counties, including Australia, New Zealand and the UK also implement similar measures.

In this proposal, first-time job seekers under the age of 29, who remain jobless for more than six months, should be offered a first-time job seekers allowance. They should receive, for six months, half of the benefit amount that is given to those on unemployment benefits.

2. Ensuring higher rates in unemployment benefits

In 2010, only 7.15% jobless employees received unemployment allowance, much lower than Korea’s 12%. For many fixed-term contract workers cannot receive unemployment benefits because their employees illegally employ the workers without insurance. Other fixed-term contract workers, due to the instability of their jobs, fail to receive unemployment allowance because their accumulated labor insurance seniority is less than six months. Moreover, the standard of unemployment in the Employment Insurance Act is too strict, causing many people that lost their jobs to not qualify for unemployment benefits.

For these reasons, Chair Tsai has proposed to increase the amount of unemployment benefits. First, among industries that largely hire fixed-term contract workers, Chair Tsai, once elected, intends for the government to make more labor inspection, which includes ensuring that all employers pay insurance for their employees. Second, the government should cast a reasonable recognized standard on unemployment in order to ensure that unemployed people are given greater chances on receiving benefits.

3. Implementation of short-term allowance for forced unpaid leaves workers

In recent years, some enterprises have adopted unpaid leaves practices, requiring employees to take unpaid leaves of absence as extra vacation time, disguising a wage decline. Even though both sides have a formal agreement, workers’ unequal status gives them little rights to say “no.”

Chair Tsai said that she believes enterprises should bear general economic risks and therefore should not practice unpaid leaves. However, during economic crisis, if companies have to shorten operating hours, there should be a prior agreement between the workers and the management, and it should also be recognized by the government. It is the responsibility for the government to provide employees with short-term subsidies in order to prevent workers from facing hardships and to lighten the stress laid out for enterprises. Chair Tsai’s labor policy proposition is based on the idea that enterprises are obliged to repay the shortfall in employee salary. Therefore, when applying for unpaid leaves permission, a repayment plan should be attached.

In this new plan, it is proposed that firms are allowed to shorten working hours amid economic crisis, but the employers must complete labor wage negotiations with their workers, which must be approved by the government before enacting. The government should provide the workers with short-term subsidies that stem from employment insurance funds. These short-term subsidies are wages paid to the worker on behalf of the employers, thereby making the employer responsible for repaying the government.

4. Banning government agencies from hiring dispatched workers

The numbers of dispatched workers have increased from 76,000 to 353,000 people. Approximately 15,000 of these workers are employed by the government. These atypical workers face job instability, unequal wages, as well as vile working conditions.

The new policy proposal requests a review of the Labor Standards Act to ensure equality in status among temporary workers and full-time workers under certain conditions. It is also proposed that a limit should be placed for applicable industries.

In addition, the government must lead by example and stop the hiring of temporary workers. All levels of public and government institutions should be prohibited from employing dispatched workers, and prohibit temporary hiring disguised as contracts for natural persons. Nonetheless, the rights of current temporary workers should still be protected and they should be gradually modified into contractual staff.

Furthermore, the Labor Standards Act should be revised, including a chapter devoted to protecting the rights of temporary workers in order to ensure equal wages compared with that of full-time employees under certain conditions.

Maintain our industry’s competitiveness while taking care of our workers

Chair Tsai’s four proposals are not only preparations for the inevitable booms and busts of the economy, but also a revision to our current labor rights protection.

Facing future economic challenges, President Ma’s Administration has only responded with the slogan of the next “Golden Ten Years”, dodging the reality that is unable to solve citizens and their gloom outlook on the future.

Chair Tsai believes that labor is the building block for economic development. In the foreseeable future, the world will face more and more economic turbulence, and it is the government's job to protect the country. Not only will we have to maintain our industries' competitiveness, but also take care of our workers to stay strong in times of challenges in order to prosper in the future.