Business leaders slam annual leave reforms

The China Post news staff

TAIPEI, Taiwan — Business leaders said Friday the government was creating, not addressing problems for local enterprises by trying to force through a series of controversial amendments to the Labor Standards Act, arguing the changes would threaten the survival of small and medium-sized enterprises.

Lin Po-feng (林伯豐), chairman of the Chinese National Association of Industry and Commerce, said the Tsai administration was acting “too populist” in pursuing the changes, adding that local enterprises “would not accept” the amendments.

“There has been no such precedent in this world. The government has failed to solve problems and are now creating new problems for local enterprises, especially the small and medium-sized ones.”

Lin said the changes would “increase operating costs for enterprises, undermine their competitiveness and even threaten their survival.”

The “one fixed, one flexible” holiday bill failed to clear the floor of the Legislature Friday night, amid strong protests from labor groups outside. The revisions will again be up for deliberation and possible ratification next Tuesday. As part of its efforts to compensate for the loss of seven national holidays should the new holiday bill be passed, the ruling Democratic Progressive Party (DPP) has sought to change regulations governing annual leave. Employees who have been at a firm for less than a year will be granted three days of annual leave.

Under existing laws, those with a company for less than a year are not eligible for paid leave.

Those with over one year and under three years of service are currently given 10 days of annual paid leave.

Under the DPP-initiated revisions, employees originally eligible for 10 days of annual paid leave would enjoy an extra three days off.

Unconditional Compensation Payment

The proposals would also require employers to “unconditionally” make compensation payments to an employee for annual leave not taken by before the end of a fiscal year.

Employers are currently not required to make any payments to employees who fail to use up their annual leave allowance. But the proposals have been met with skepticism from business and industry leaders. Lin said that local enterprises would be forced to downsize, cut overtime payments to employees and reduce bonuses. “This will lead to a triple-loss scenario, with employers, employees and national economy all being hit.”

Lai Cheng-yi (賴正鎰), chairman of the General Chamber of Commerce of the Republic of China, echoed Lin’s remarks, saying that his group categorically opposed the DPP’s proposals and that the government could not sacrifice the needs of business simply to pander to workers. “In fact, many workers said they don’t want more days off, as what they need is a higher salary or overtime pay. But the DPP’s policy runs counter to their wish, as it will force enterprises to scale down their operations,” Lai said.