Minimum wage system retained

The China Post staff

A panel under the presidential economic development advisory council yesterday decided to keep the minimum wage system and include employer-provided accommodation from foreign workers’ monthly pay. But the panel shelved discussion on the controversial “no work, no pay” formula proposed by a top labor affairs official. Following heated discussion and debate, members on the “employment panel” of the advisory council voted against scrapping the minimum wage system as advocated by business and industry leaders as well as by some government officials. Some labor affairs scholars on the panel pointed out that there are now only 5 percent of employees draw a monthly pay of around the minimum monthly wage — NT$15,480 (US$458). But experiences in advanced nations show that the level would increase if the system was scrapped in revision of the existing labor rules. The panelists also reached consensus to formally revise the payment structure to foreign workers. In the past, most employers pay the foreign workers they hired by the minimum monthly wage of NT$15,480 plus about NT$2,500 a month for meals and living places. Officials at the Council of Labor Affairs (CLA) have tried to reach agreements on the new arrangement to include the NT$2,500 as part of the total monthly pay with major neighboring nations like Thailand, the Philippines, Indonesia and Vietnam — major suppliers of laborers working in Taiwan. The panel’s proposal will be enforced if it is adopted by the plenary session of the presidential advisory council later this month. However, the change in the format for calculating wage from the present monthly basis to hourly basis as proposed by Chairwoman Chen Chu drew objection from other members on the panel, political parties, and workers organizations. She suggested earlier that such a switch will be in accordance with the “no work, no pay” principle “in line with the global trend.”

She said the new formula would see workers paid by hour to more accurately and fully reflect production costs while workers’ interests will be protected and employers have greater flexibility in hiring.

However, Chen’s statements sparked strong and widespread protests. Members of the labor groups staged a demonstration in downtown Taipei, saying their incomes would be cut by one-third if they were to be paid by the hour.

Under the new “no work, no pay” formula, enterprise owners and operators would be able to withhold pay for the 52 days in a year that are currently paid holidays under the existing Labor Standards Law.

They said their other compensations like severance payment and retirement payment will also shrink significantly since such payments are calculated on the basis of average monthly pay they receive. The opposition Kuomintang slammed the formula as “immoral.” Lee Cheng-tsung, KMT party whip at the Legislative Yuan, said the KMT would never allow the proposal to clear the legislative floor.

Other KMT lawmakers criticized President Chen Shui-bian for dumping the workers by allowing them to be exploited by employers after the workers helped him get elected. Legislators of the People First Party and the New Party in the opposition camp also blasted Chen Chu and the ruling Democratic Progressive Party (DPP) for harming the interests of blue-collar workers.

Even DPP legislators dismissed Chen Chu’s statement “irresponsible” for saying that the “no work, no pay” formula is a global trend. On the contrary, they pointed out that many industrially advanced countries are now reviewing the formula to assess its impact on real industrial development and progress.

They said the “no work, no pay” formula will only cut into the pay and rights for employees and would contribute nothing to raising the nation’s international competitiveness.

Sensing the strong opposition, Chen Chu and other CLA officials decided not to talk on the controversial issue for now. At the nine-member presidential policy consultative meeting last night, President Chen also decided that the minimum wage requirement will not be scrapped in order to protect the workers’ basic rights and interests.

The nine leaders in the government and the DPP also clarified that there is no final decision made concerning the change to hourly pay system. The “employment panel” under the presidential advisory council will continue discussing vital labor affairs issues in the next few days.