The Current Situation of the Basic Labor Standards Law and the Industrial Relations in the Republic of China

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(2) The Cl1rrent Situation of the. Basic Labor Standards Law and Industrial. Relations in the Republic of China. Dr. Yeang-chin. Oontents IV.. I. Background. II. III.. Reforms. V.. Conclusion and Outlook. International Comparison. This paper concerns the develop ment and current situation of the Basic Labor Standards Law (BLSL) and industrial relations in the Renublic of China (ROC). It is divided into five sections, including !:>ackground; reforms; international comparison; practice and critical remarks; and, conclusion and outlook. Reference material for this work has been drawn from both Chinese sources and various internationa' surveys, as noted herein.. draJt of a ROC. labor code in 196: which, like its 1929 craft predecessor, failed to be codified, due to its unwield size and structure. l. J,. I.. Practice and Remarks. Background. The BLSL was enacted on July 30, 1984. Passage of this law repre sented a long, culmulative process, involving all sectors of the ROC's society and Governmen t. The BLSL . has its historical origins in the first. The'development and enactment of the BLSL was far from a smooth process. During the course of events that led to its passage, there were widely different opinions emanating from industry !eacers, weD known academicians and several Government bodies, as well as minority members of the country's workforce. The discussions which took place during its development and passage were occasiona~ly very heated, reflecting 2 the serious concerns of those invo.!vec. To some. extent, this situation was most ironic as not only the essential points of the BLSL ar~ not original. 1) Kuo-chun Chen, Modern Labor Problems and Labor Legislation (Chinese), Volume 2, 4th Edition (Cheng Kuang Book Company, Taipei), 1984, pp. 26-86. 2) Set" Press Materials (Chinese), Volume 1, "On Labor Standards Act;' eciiud by the Library Staff of the Legislative Yuan, ROC, 1986.. 278.

(3) in basis, but the very peop!e w!1o were to be protected by this law occasionally were involved in opposing the enactment of it. Furthermore, if viewed from a 'ong-term perspective, this law is quite evolutionary in nature and does not represent any earth shaking departure from past ROC industria~ relations legislation. The law is also in keeping with mains tream legal trends around the world concerning labor relations. s Prior to the passage of the BLSL, there were approximately one hundred labor related laws and statutes on the books in the ROC, representing over fifty years of legislation on the subject. Viewed in the main, many of these laws were highly idealistic and pro gressive in nature. However, some were of limited use, and largely out dated, while others were passed by the ROC's Legislature but never officiaHy sanctioned for enforcement. The emphasis was on norms of con duct rather than on formulation of organizational and procedural condi tions of industrial relations; in Teu bner's terminology-more on substan tive law t~lan on reflexive law. 4 .Due to the economy's weak infrastructure and immature legal culture, the net result of this situation was that there were many laws on the books, but few laws in the factory. During t.he 1930s, after the Kuo mingtang Party unified C!1ina, it. passed a comprehensive set of laws, the most imporant of which arc noted below. Af~er the Sino-Japanese war broke out in 1937 and the economy's fate grew perilous, the Government nassed. a series of industrial· relation ~aws reflecting tighter labor pro cedures. The most important of these Acts were t~e Employee Bonus Act (passed J943) and the Compulsory .?ublic Works Labor Act (passed 1.943). After t!le war was over, a Constitu tion was passed in 1947. T11is piece of legislation was very favorable to the interests of labor; specifically Articles 14., 15, 152-154 and 156. 1. The Union Act (passed 1929) 2. The. Factory. Act. (passed. 1929) 3. The Conflict !v!anage ment Act (passed ~ 930). 4. The Collective Bargaining Act (passec. 1930) 5. The Factory Inspection Act (passed 1931) 6. . :~e. Labor Contract Act (pas 1931, but not enforcec). 7. The. Minimum Wage Act (passed 1936). 8. The Mining Standards Act After moving to Taiwan, the Government revised many oId indus trial relation laws and enacted new laws to further the welfare of the workforce and to facilitate the. 3) Spiros Simitis, "Zur Vrrrechtlilung cler Arbeitsbeziehungen," in Kubler (ed.), Verrechtlichung van Wirtshaft, Arbeit und sO:J:ialer Solidadtat, (Suhrkamp, Frankfurt), 1985, pp. 73-163. 4) Gunther Teubner, "Substantive and Reflexive Elements in Modern Law," 17 Law and Society Review, 1983, page 239.. -279.

(4) economy's rapid growth. Below are noted the most important of these laws. 1. Miner Retirement Regula tions (passed 1951) 2. Factory Worker Retirement Regulations (passed 195!) 3. Labor Insurance Regulations (passed 1958) 4. Labor Education Regulations (passed 1958) 5. Factory Worker Employment and Termination Regulations (passed 1960) ·6. The Mining (passed 1973). Safety. Act. growth, is now obviously inadequately structured to meet these challenges. In addition, the ROC's unions are not forcefully organized to compensate for this situation. 6 This is acknow ledged by many sectors of soiety who now realize that something must be done in the future. During annual meetings between ROC and US dele gations consisting of various ROC Government departments and key pri vate sector industrial figures, the state of the country's industrial relations laws is continuously brought up. Comments have been concerned pri marily with current ROC labor con ditions.. 7. The Labor Safety and Hygi ene Act (passed 1974) 8. The Occupational Training Act (passed 1983) Overall, these laws, which were very unsystematically put into force, are not comprehensive enough in character and are rapidly becoming outdated, and in some cases, totally mutually contradictory in nature. At present, the labor situation in the ROC is becoming more and more complex, due to the rapid growth of the workforce as well as higher and higher educational levels of the Unfor· society as a whole. 5 tunately, the country's legal structure, which is supposed to facilitate this. I!.. Reforms. The BLSL has two primary fun ctions. First, the law signifies a cleansing and systemization of prior existing industrial relations law in the ROC. Second, the law improves the standards and conditions of the ROC' working environment. In these aspects, the BLSL differs significantly from the US' Fair Labor Standards Act of 1938, in that the law is of a far more comprehensive nature, but is similar in thrust to industrial rdations law in Japan (see Labor Standards Act, 1947) and in South Korea (see Labor Standards Act, 1953).7 In some aspects, the BLSL goes beyond the regulations of Japan in that it touches. 5) See Wu-chcng Yan, The BLSL Legislatian From a Policy Making Perspective (Chinese), (Shi Ying Publishing Company, Taipei), 1985, pp. 43-52. 6) Cheng-kuang Kan et aI., (Chinese), A Study an the Improvement of the Organization and Fwzctian of Unians At Different Le'vels, Taipei, 1983. 7) For a detailed comparison of the Labor Standards Laws in these three countries, see Chen hsian Lin, (Chinese), On Labor Standards Act, A Comparisan Study of Laws in the ROC, Japan and the ROK, 2nd Edition, (Cheng Chao Publishing Company, Taichung), 1986.. -280.

(5) areas such as employee retirement benefits, which theoretically belong to the area of social security regulations critical remarks of the BLSL's "extra territoial" aspects will be addressed later.. the same treatment as regular wor kers, if none better exists under other legislation. (See Article 84). In addition, before the end of next year, another one million workers will be this law. s covered. The BLSL represents four signi ficant reforms over existing ROC in dustrial relations legislation. First, the law is far more wideranging in scope and extends more deeply into the labor environment of the country than past legislation. The la w is applicable to the foHowing incustries, while prior factory and mining acts were of limited scope and industry specific. (See Article 3).. Second, the RLSL provides im proved protection of employee's civil rights. Past labor laws were ambi guously worded as to the extent of a regular work day and suggested that a work day could be legally ex tended to ten hours. Under the BLSL, the maximum work day is eight hours per cay for an adult laborer, with a maximum work week of forty eight hours per week. (See Article 30). Furthermore, the law limits and controls extension of hours, subject to consent of the labor unions and the worker concerned. (See Article 32). Under the BLSL, a worker cannot be forced to work overtime if ill health or other reasonable causes are cited as reasons. (see Article 42). In past legislation, this issue was not addressed at a~l. Prior to the BLSL, rest periods were mandated every five hours. Under the SLSL however, this time period has been reduced to four hours.. 1. Agriculture, forestry, fishing. and pasturage industries; 2. Mining and quarrying indus tries; 3. Manufacturing Industries; 4. Construction industries; 5. Water, power and gas sup ply industries; 6. Transportation, warehousing and communications indus tries; 7. Mass media industries; 8. Other Government designa ted induitries. For the first time, civil servants with worker's status are also officiaUy covered by law and are entitl.ed to. In the area of women's rights, tbe BLSL is far more progressive than prior statues. In the past, there were only three conditions which prevented women from working after midnight.. 8) See The ECOTlomic Daily, ROC, (Chinese), October 3, 1986, page 2. Of a total labor force population of 7 million, approximately 3.2 million 'workct's are nov,' covered by the BLSL, with another 1 million expected to be fovered by the BLSL by the end of next year; repre senting covereage of approximately 60 percent of the ROC's workforce. See also The Economic Daily, ROC, (Chinese), July 30, 1984, page 1.. -281.

(6) Article 17). Retirement benefits ~ave been increased, by mandating a different employment beneficiary period, in comparison to prior legislation (See Article 55). In addi a retirement fund been introduced, controlled wor ~{ers and employers, which did not exist before. (See Artide 56). In the cases of death, disabili ty, i!1jury or rnajor illness due to occupational reasons, employees should be compen Article 59). This is now :>UpW.d.lC;L: In a whole Con tractors subcontractors are also included in this provision for the first time. (See Article 63).. Now, these conditions have been tightened considerably and have in creased in number. Pregnant women are not allowed to work after midnight at all now and are weeks for maternity 1,dbirth. (See Articles If a pregnant female worker now requests less strenuous work and such work is available, the employer shaH not reduce her wages. Article 51). A female worker with a nursing must also now two nursing purposes. Extensive coverage is also given in the BLSL to the' protection of employee labor agreements. (See Articles 11, 12, 13 "md 16). Prior laws covered the area of terminatir..g but were never enforced. Third, t~e BLSL provi2es incre asee. worker benefits. In tl1e area of additional com?ensation, the BLSL establishes minimum additional com pensation standards. Article 24). case of unpredictable events, wages are mandatory and the employee will be subsequently given time off as compensation. (See Article 41). In corporate bankrupcies, workers are now given priority over an creditors for the portion of overdue wages not in excess of six months wages. (See Article 28). This proviso not exist in prior indust!"ial rela legislation. For severance pay, the employment used for com pensation benents has bc:en lengthened, in comparison to laws. (See. Fourth, the BLSL provides for greater employee participation in the area of management. must post business work which have been reviewec. and by the appropriate Govern ment authority. The content of such work· rules is now detailed in such a maImer that former empIoyer arbi trariness regarding factorY rules is (See Article The BLSL mandates meetings for which such rules have been by the central Government. However, the as well functions of these as the frequency of them is not at alL Article 83).. Under the employees are given the right to without endangering their employment. (See Article 74). In addition, whereas. 282.

(7) for violation of eXlstmg labor laws were solely monetary in nature, re gardless of the offense committed, the BLSL stipulates various degrees of pena'.ties, ranging from imprisonment up to five years, to no imprisonment but payment of a token fine. HI.. International CaInpari§on. Viewec at 6e global level, one fundamental and irreversible trend is the ever increasing extent of legali~ zation of industrial rdations. Differ ences in various international industrial relations laws consist more in thrust, ranging from hig~ly general to ex tremely specific, as well as weigbting with some countries having highly material regulations versus more procedural measures. The trend of industria! relations law in the industrialized world is from specific to generaL This can be easily SCCil in Western Europe (with the exception of Eng!and), and in the United States (US).9 On the other hand, there is no clear global trend with regard to materia~ versus procedural matters. For instance, in the which is traditionally inclined to collective laissez-faire industrial relations, ap proximate1,y 80 percent of the labor force is not involved in the c01~ective bargaining process. Actual!y, colIec tive ~argaining in 6e US is being. pre-empted by the adoption of a variety of regulatory statutes. France, on the other hand, which is well known for extensive regulation of industrial relations, has turned away from this course. According to Mr. Jean Auroux, Minister of Labor and author, the Socialist Party reforms in France during the 1980s are of such a manner that, "We prefer a law which gives a framework and which sti mu!ates, to a law which regu~ates."10 In the case of the ROC, the direction of industrial relations law has been more and more toward material regulation. Again, this trend is noted in the The foHowing is a comparison of key points of labor regulation with. current ~egal standards in the ROC. Data for Western industrialized coun tries is derived from an Austrian study published in Vienna in 1981, based upon extensive scientific analysis useing 1980 cataY Caution is war rantee in studying this data. It is sometimes difficult to state exactly what "the law" is in a certain country. In the US for example, the Tenth Amendment to the Constitution re serves certain powers for the States and the Federal Government has been largely pre-empted from the whole fie~d of industrial relations manage ment by collective bargaining agree. 9) Simitis, supra, footnote, page 39. 10) Jean Aurollx, "en ~ouveau Droit ciu Travail?" 1. Dr. Soc. (Les Reformes-IV-Un Nauveau Droit du Travail?) 2. Special I~sue, 1983, as cited by Mary Ann Glendon, "French Labor Law Reform 1982-1983: The Struggle for Collective Bargaining, "The American Journal of Comparative Law, Volume 32 (1984), page 482, footnote 206. 11) .Franz Dun! and Joachim Lame!, Arbeit-und Sozialrechtliche Regelungen im Internationale1l Vergleich, ('Signum Verlag, Vienna), 1981.. 283.

(8) ments, resulting in a high degree of regulatory variety and autonomy. Data for South Korea (The Republic of Korea, ROK) is simply based on exist ing law and not on any particular study. In the case of normal work hours, ROC law and ROK law stipulate a Table 1.. maximum number of 48 hours per week. In actuality however, people in Taiwan average approximately 49 hours per week. Among the indus trialized countries in Table below, this figure would place the ROC at the top of the list.. Normal Work Hours, 1980 (hours per week) Collective Agreement f1. Law Country Austria. I. I w. Germany I Belgium I Denmark France England Italy Holland ::\orway S\veden Switzerland Japan US. Worker. Employee. Public Servant. 40 48 40 40 40. 40 48. 40 40 38 40 40. 38. 40 40. Public Servant. fZ. f2. f2. f3. f3. f3. 48. 48 43 40 40. 42 48 40 40. 40 40. 40 40. 36. 42--44. 42-44. 43 40 40 45 48 f3. 45. H. 48. 48. fZ. f2. 40. 45 40. Footnotes: 1. Cited only when those agreements differ from legal provisions. 2. No legal regulations. 3. Two-thirds of all workers under a 40 hour work ·week. 4. na=Information not available.. In the case of number of work days, the ROC averages 6 per week, with the ROK also averaging 6 per week. As is noted in Table 2 on the next page the ROC's figures are among the highest of the industrialized coun tries indicated. Although the BLSL does not make any differentiation as to category of workers, in actual practice, there are subtle differences involved.. In the case of overtime compen. sation, ROC law provides at least one-third to two-thirds of normal pay for usual work days and up to couble normal pay for holidays, but makes no compensation differentiation with regard to night work.. In the ROK, overtime compensation is one-half of the amount of normal compensation, for all additional work normal wor~{ days, holidays or night work. The other countries data are noted in Table 3 on the next page.. 284.

(9) Table 2: Work Days Per Week (selected industrial sectors) Country. Production. Commerce. Austria. 5. 5 1/ ,. W. Germany Belgium. 5. 5 1/ 2 5. Denmark France. 5 5 5 5 5. 5. England Italy Holland Norway Sweden Switzerland. 5 1/ 2 5 1/ 2 _-6. Japan US. 5. 5. 5 5 5 5 5 5 6. 5. 5. 56 6. 5. 5. 5. 6. 5 5. 5 5 1/ z 51/ 8. 5. 5. 6 5 1/ Z 6 5 5 51/ 2 51/ 2 --6. 5. 5. 5. 5 5 51/ 2-6. 5. 6. 5. 5. 5 51/ 2 51/ c-6 6. 5. i Public Servant. 5 1/ 2. 5 1/ 2 5. 5. I. Banking/ Insurance. Tourism. 5 51/ 3- 6. Table 3. Overtime Compensation (as a percentage of normal pay) Weekdays Country Austria Law Col. Agree W. Germany Law Col. Agree. Night Work. Sunday and Holidays. 'E I . Public ; mp oyee, Servant. 50 50. 50 50. 50. 25 25-40. 25 25-40. 25. -,---. ----~------. 50 100. 100. , 25 -0. 25-50. Denmark Law Col. Agree. 50-100. Fram'e Law Col. Agree. na. Englang Law· Col. Agree Italv Law Col. Agree Holland Law Col. Agree. Norway Law Ce·!. Agree. 25-50 -none-. I. !. 50-100. I. na. i. 100. na. -nonc100. 100. ). I 25-50. 25-50 : 0 -none. i. -none50-100. -in general I na. o. 0. 50 100 25 50. I. I. Belgium Law Col. Agree. I. 100. -none na. na. na. -in gener~l 25-50-in general 25-50 na i na na I na i na I j. ,. -no general statements possible-l. 10. ,. .. J. 10 na. 10 40. 10 40. 25-50. na. 100. -none 100. 40 40-50. 40 na. 40 100. 10 25. -none 25-50. -285. 40. 100. I. 10 na. 10. 10. 50. 50. 10 na. na. na. na. -none I na. 40 na. 40 100. 40 100. 40 na.

(10) Sweden Law Col. Agree Switzerland Law Col. Agree Japan Law Col. Agree US Law Col. Agree. 50. na. 25 f2 25. na na. -none1/73 f1. na. 100. -none1/73 na. 50 50-100. na na. 25 50. 25 50. na na. 25 25. 25 25. na na. I na j 50 -no general ~tatements posslole-l. 50. 50. 100. na na 50. 25 25. f1:. I. Footnotes:. 1. Month!y pay. 2. For overtime work that exceeds a total of 60 hours per year. 3. Information not available.. In terms of the number of vaca tion days per year that a worker may take off, ROC practice fluctuates between a minimum of 7 days per Table 4.. year, and as many as 30 days per year. Sec Table 4 below. In the ROK, these figures are 3 days per year and 30 days per year, respectively.. .Minimum-Maximum Vacation Periods (as of 1980) Coliective Agreement fl. Law. Country Vacation Minimum Vacation Maximum Vacation. Austria W. Germany Belgium Denmark France England Italy Holland Norway Sweden Switzerland Japan US. 24 18. 30(36) f2 24 f3. 24 26 24. 31 f3. 24 I. I. i. I. -no l'egu!ations 30 f2 15 24. 30 f2. -no geucral statements possible na 24 27-34 21-24. 24. 30 12(24) f2 6. H 20. -no general statements possible. -no regulations-. Footnotes: 1. Only cited when those agreements differ from the law. 2. Public servants. 3. On average. 4. information not available.. 286.

(11) According to ROC law, there are 15 official holidays per year ( ten national and five cultural), making the. ROC one of the highest ranking Table 5.. countries in comparison to those noted in Table 5 below. No data isavaila ble for the ROK.. National Holidays (as of 1980) Paid Holidays. Country Total. Collective Agreements. Law --------------------;-------. Austria W. Germany Belgium Denmark France England Italy. 13-14 11-13 11. 13-14. 11-13. 10. 1/2-3. 91 / 2 10. 8. 11 7. Holland Norway Sweden Switzerland Japan US. 9 10 8-9 1/ 2. 7-9. Sick Pay. Payment c--MaximurD. Number Worker's Pay of . -- - . ---- Worker I Employee . % -of. Country. I. I. 100 100 100 90 90/66. I. :_______ Sic:~ Pay Highest % of: Worker's Pay .. '50-60 100/50 '42 100 100 30 17 135 100 35 90/66 130-90/30-90 JV-7VI JV-7V 150 I I1@60 I 100. 100. 7-9. noted in Table 6 below, this would rank the ROC in the middle of such a grouping. For the ROK, there are no regulations pertaining to this aspect of industrial relations law.. Table 6.. No~way. 11. 8-9 1/ 2 12. 12. With regard to compensation due to illness, ROC workers receive between 50-100 percent of their usual pay for a maximum of 30 days per illness. In comparison to the countries. Austria W. Germany Belgium Denmark France England Italy Holland. 10-12 1/ 2 10 8 12. 7. 9. 100. 287. (546) f2 . 3 ,1. I. 364 not restricted 0 360 (l080) f3 , 3 f4/156 f5. 150/66.6 f6. ,180 f6. 80. 364 '312. 100. Pre-bene ficiary Waiting Period. Maximum Number of Days. i3 ' 3 f6 2. o. f5.

(12) Sweden Switzerland. 90 100. 100. 21 f7. I. not restricted. 21f7. Japan US. 540. 60. 3. (50/66.6 f8) (182 f8). (0-8 f8). Footnotes: 1. For Denmark, figures are net worker's pay; for all other couutries, gross figures are used. 2. Based on Association statuatory decisions. 3. In the case of long-term illness (i.e., over 6 months). 4. All inclusive sick pay. 5. Ad hoc payment of sick pay. 6. Only workers. 7. Proportional (longer) payment in the case of long employment. 8. Only in 6 States.. In the ROC, there are no regu lations pertaining to medical care in the factory. In the ROK, there are also no regulations governing factory. site medical facilities. Thus, any comparison with the data in Table 7 below is difficult.. Table 7. Factory Site Medical Care Country Austria f1 W. Germany Belgium Denmark France England Italy Holland Norway Sweden Switzerland Japan US . If Yes:. Is There A Legal Duty? yes yes yes yes no. For What Plant? over 750 workers f2. no no f3. f3 i. generally generally, for certain. Is ThereA-r:.egal Minimum E~ga&:emen t Period?. branche~. no yes f5. no no yes yes no f6 no f7 yes no. over 750 workers f2 defined by Boards . no no. over ZOO workers. no. Footnotes: L At this time, there is a draft regulation concerning, among other things, site medical care for companies with other 300 workers. 2. A smaller number is available if there is a particular health hazard present. 3. There are guidelines/rules for professional cooperatives mandating site medical care and minimum engagement periods. 4. For ('xample: iron and metal works; foundries; chemical industry; petroleum and asphalt industries. 5. 1.3 hours per year and worker; there is a full-time medical service personel in any company with over 1,250 workers. 6. There are no collective agreements concerning medical care. 7. An Accident Insurance Act is being prepared which discusses site medical care.. -288.

(13) In the ROC, there are no regu lations concerning regular bonuses, in direct comparison to those countries noted in Table 8 below. Bonuses are subject to the employer's discretion, Table 8.. Regular Bonuses. Worker Country. Vaca tion . Christmas. Austria . :4 week '4 week payment'payment or 1 or 1 months' Imonth's earnings !earnings W. Germany yes yes Belgium 4 week ' :payment;. Denmark 12.5% ofino lannual earnings. Other Occas- Vacation ions. Vaca tion. no. '1 month's month's salary ,salary. na. yes. no. :1% of ,no. yes. Sweden . i. I. yes. yes. yes no. no. no. no. no. no. f4. no. i 110. :mon~hly. earnmgs :per . I ,vacatIOn :day. ! Switzerland. no no. 0.036% no of ;annual earnings' :per !vacation: iday Ii. j. no. month's:. • I earmngs. no. :0.6% of no. Japan US. no. no. month's earnings' Iyes. I. [annual! earnings I. yes yes. 1.5% of no annual. ,earnings. no. ,20-50% 120-50% of ,of. monthly;monthly!. 'earnings1earningsi. 11 ,f4 imonth's 'earnings iyes. 112% of. yes yes. annual , earnings'. I. Norway . Tax Bene fit. f2. f1. 'yes. England . Holland. Chris- 1- Other tmas ' Occas ions. I. 20-50%,20-50% of iof monthly!monthly earnings ,earnings. Italy . Public Servant. Employee. 'n. France . and frequently are mandated more by the profit picture of the corporation concerned than social custom. This is the same situation in the ROK at present.. no. no. no no. no. Footnotes: 1. In some sectors, such as banking, th("re are special payments made for various occasions. 2. Public servants get seasonal payments which may go as high as 50% of monthly earnings. 3. No payments during vacation. 4. Further monthly earnings are given in commerce and some other sectors (14. salary). 5. - means no information available.. -- 289.

(14) In the ROC, pregnancy leave is regulated by law. Whi3e there is no minimum leave period, the maxi mum amount of time off is 8 weeks per pregnancy. As is noted in Table 9 below, many countries in Europe Table 9.. Country. : Are There Any Regulations? . Austria W. Germany. yes yes. Belgium Denmark France England Italy Holland :Korway Sweden Switzerland. no. no. no f1. yes yes no yes yes no. Japan US. no no. allow for a much greater time off per pregnancy than in the ROC. In contrast, ROK law stipulates a maximum period of 60 days per pregnancy.. Pregnancy Leave If Yes:. i r. Duration. Payment Provided?. Can The Father Also Claim?. up to one year up to 6 months after birth. yes yes. no. 20 weeks 6 months during the first year. no f2 yes. no yes. up to 1 year after birth 180 days f3. no yes. yes yes. no. -. Footnotes: 1. Public servants and teachers have regulated vacation periods. 2. After the first 6 weeks, further claims can be made for up to 18 weeks. 3. Further paid exemptions are pssible for up to 180 days until the 8th year of the child. Anunpaid exemption is possible until the child is 11/2 years old. Shortening the mother's work period by up to l/Z of normal time is pssible, with correspondingly reduced pay, until the child is 8.. In the case of termination periods, ROC law differentiates in length of time periods, depending on the term of employment; time periods range from 10, 20 to 30 days. In the ROK, the maximum period stipulated by law is 30 days. Both countries appear to be in line with current regulations of the nations noted in Table 10 on the next page.. -- 290. In the ROC, severance compen sation is covered by law. Essentially, compensation is given at a rate of one month's pay for every year em ployed by the terminating company. In comparison to the other countries noted in Table lIon the next page, the ROC ranks very highly. In the ROK, there are no regulations govern ing severance compensation..

(15) Table 10.. Termination Periods For Workers. Country. Minimum Termination Period. Austria W. Germany Belgium Denmark France England Italy Holland Norway Sweden Switzerland Japan US. Differentiation For Longer Period According To:. Employer. Worker. 14 days 2 weeks. 14 days. company employment. 2 weeks. 14 days. 14 days. company employment company employment. 1 week. 1 'week. 8 days 1 week 6 days f1 1 month month month month. 8 days. company employment company employment. 1 week 6 days f1. company employment. 1 month. company employment & age. month 1 month. age company employment. 2 weeks. none. company employment company employment. -no statement possible. Footnote:. 1. Minimum period is the period between two work payments.. For Employees Country. Minimum Termination Period By: Employer. Austria W. Germany Belgium Denmark. France. Worker. 6 weeks. 1 month. company employment. 6 weeks 3 months month. 6 weeks 3 months. company employment & age company empl~yment & position company employment. month. month 1 month. England. Italy. week month. 1 week month. Holland. Norway. f1 1 month month month month. Sweden. Switzerland . Japan US - - - - - ------' Footnote:. Differentiation For Longer Period According To:. f1. 1 month month. r month 2 weeks. company employment company employment company employment company employment company employment & age company employment & age company employment none. -no statement possible ---. --.. 1. Minimum period is the period between two work payments.. 291.

(16) Table 11. Severance Compensation (fold out). Country. In principle, severance compensation is available for every dissolution of contract (with the excep tion of justified discharge or break-off by worke or unjustified worker walk out).. Severance compensation only for unjustified bre ak-off or discharge from employer. Sev("rance compensation only for surplus staff situation. ---. Austria. Severance compensation for worker and employee for every: 3 service years-2 month's payment; 5 service years-3 month's payment; 10 service years-4 month's payment; 15 service years-6 month's payment; 20 service years-9 month's payment; 25 service years-12 month's payment.. W. Germany. Severance compensation for any worker older than 18 years that has been emploYed for more than 6 months with the same company; if under 50 years old, maximum pay is 12 months compensa tion; over 50 or 55 years old, maximum pay is 15 18 months compensation. Severance compensation for workers of at least 6 month's pay. . Belgium. Denmark. France-. I. Severance compensation for employees as follows: 12 service years-! month's payment; 15 service years-2 month's payment; 18 service years-3 month's payment. (Workers only according to collective agreements). Severance compensation for after 2 years workers se-rvice with the company, in: the amount of 1/10% of monthly pay (or 20 hour pay)for every service year.. Severance compensation for workers according to collective agreements, up to a maximum of 26 month's pay; for em ployees,"" according to the law, up to a maximum of 6 month's pay.. Severance compensation for workers in the amount of at least 6 month's pay.. -292. Special payment for a maximum of 12 months of a certain percentage of the last payment, reduced ("very 3 months in order to motivate the worker to seek a new job..

(17) England. Italy. Workers with at least one year of employment with a company receive a basic amount of 2 week's pay. Additional cliams can be made in respect to damages or non-abiding a court order that sides with the employee. (There is a maximum amount of compensation).. Severance compensation for most workers in a company with over 15 workers as well as enterprises (with more factories) with over 35 workers. (Minimum a mount is approx. 5 month's pay). Severance compensation is granted by the courts; the claim amount is not fixed-age and length of employment with the company are usually considered. Severance compensation is granted by the courts; the claim amount is not fixed-age and length of employment with the company are usually considered.. Severance cempensation for employers in the amount of 1 mounth's pay for every service year. (Wor ken only according to collective agreements).. Holland. Holland. Norway. Severance compensation for workers over 50 years old, and with at least 10 service years, or 20 service years with no more than a 5 year interruption.. Sweden. I. I. Switzerland. Japan US. Workers with at least 2 years employment with company receive half of 1 week's pay for every service year between the ages of 18-22; 1 week's pay for every service year bet ween the ages of 23-41; !lIz week's pay for every service year bet ween the ages of 42-60 (women)or 42-65(men). There are maximum limits for week pay and for entire compen sation.. Severance compensation (except for workers leading personnel) in the amount of 16 month's pay (in the case of workers with less than 5 service years). with a maximum of 48 month's pay (after 10 service years and more than 60 years old).. Severance compensation for workers over 50 years old and with at least 20 service i years-in the amount of i 2-8 month's pay. na na. -293. na na. na na.

(18) In sum, when compared to other major industrialized countries of the West, the ROC appears to rank somewhere slightly below average, in the categories mentioned. Such a finding is quite encouraging when one considers that the ROC is stiB consi dered a developing country, with an annual per capital income of more than USD 3,000Y~ However, since the proof of the pudding is in the eating and not in the cooking, such a conclusion leaves a slightly bitter aftertaste in the mouths of those who must work in the factories of the country concerned.. IV. Practice and ReDlarks In the past, several different labor laws have been enacted, but enforce ment has been very poor. For ex ample, in 1929, the Union Act was enacted, which stated that all workers should be organized into unions either on a professional basis or at the fac tory leveL In actual fact, the degree of organized ROC labor today has never reached 25 percent of the labor force, and unions have been known for their lack of power and are not considered a serious force either in legislative matters or in industrial relationsY" Union growth continues at a slow pace; according to the Labor Department of the ROC's Ministry of Interior, in 1975 there were 1,255 unions, rising to a total of 1,920 in 12) 13) 14) 15) 16). 1984Y'. For over a half of a century, the ROC has had a Collective Bargaining Act, but collective bargaining has yet to play a significant role in the coun tries industrial life. At present, there are about 284 collective bargaining agreements in the ROC---a number that pales in comparison to the same figure in countries in \\iestern Europe, such as West GermanyY Factory meetings between em ployers and employees are few and far between. The predecessor to the BLSL, the Factory Act, was ratified, but never really enforcedY' In 1974, the Labor Safety and Hygiene Act was passed. However, since then, it has had little effect on ROC industrial life. Factory inspec tion and hygiene are of little interest. Just recently, two top ROC universi ties issued a report on sound pollution in the ROC textile industry. It was noted that among the 400,000 textile workers in the .ROC, only 32 percent wear protective gear, with 45 percent exhibiting hearing difficulties. Of this number of workes, only 10 percent have sought annual hearing evalua tions. In sum, unorganized unions, a legally uneducated workforce and a weak administrative infrastructure make enforcement of existing laws almost impossible. It has been over two and one-half. The Asian Wa!l Street Journal, October 23, 1986.. See The United Daily, ROC, (Chinese), September 15, 1986, page 2.. See The 1985 Statistical Summary, (Chinese), ROC Ministry of Interior, Taipei, page 25.8.. See The China Times Daily, ROC, (Chinese), August 18, 1986; page 2.. See The EC01lQrTlic Daily, ROC, (Chinese), July 23, 1985, page 2.. 294.

(19) years since the enactment of the effectiveness of this law is currently under way by various departments of the ROC's Ministry of Interior. How ever, more casual analyses have already been conducted by the coun try's press and individual academic members. These informal analyses reveal a most pessimistic picture. For example, one pre~iminary Govern ment report on enforcement of the BLSL issued a year ago noted that in the areas of retirement benefits, coUecti ve bargaining and stock bonu ses, the overall effect of the BLSL was actually negative in natureY The report stated that only 145 cor porations (of over 100,000 companies surveyed) have ever held an employee employer meeting, and only 170 have abided by the retirement regulations of the BLSL.18 In addition, the pro hibition against night work is com monly ignored and corporate nursing rooms are rarely seen. 19 In conclusion, at the present point of time, there is little ground for optimism that the BLSL is changing the structure of in dustrial relations in the ROC. Critial remarks concerning the BLSL emanate primarily from two sources within the ROC-industry leaders and neo-classical economists. According to the country's industry leaders, the BLSL's enforcement will. raise total product costs between 10 30 percent over existing costs-possibly even higher in labor intensive indus tries. 20 For the ROC's mediumand small-sized corporation who dominate the economy and who foce marginally profitable futures, enforcing the BLSL creates an even heavier burden. While sharing this view, leading ROC economists go even a step further, pointing out tha t the BLSL is "contrary to the principles of a free economy," in that by shifting the Government's responsibility to in dividual profit oriented entrepreneurs who may not be able to afford the burden, the law is draining badly needed investment capital away from the private sector. In Articles 17-20 and 55-58, the BLSL stipulated relati vely high severance and retirement benefits to be paid by the employer in lieu of a national security system. In addition, Article 28, which gives employees first priority to overdue wages for up to six months in the case of corporate bankrupcies, creates another problem for the private sector since the banks involved view such a clause as contrary to their lending While commenting on interests. 21 the drafting of the BLSL, one leading economist in the ROC, Dr. John Fei, noted that, "the road to hell is paved with good intention. 22 -~. See The China Times Daily, ROC, (Chinese), August 18, 1986, page 2. See The Eumomic Daily, ROC, (Chinese), July 23, 1985, page 2. See The Economic Daily, ROC, (Chinese), July 25, 198.5, page 2. See The Economic Daily, ROC, (Chinese), July 23, 198.5, page 2. Sharp criticism has emanated from the Economic Reform Committee of the ROC's Executive Yuan; se-e the unpublished (Chinese) Report of the Ad-Hoc BLSL Working Group, Taipei, 1985. 22) See The China Times Daily, ROC, (Chinese), August 21, 1982, page 2.. 17) 18) 19) 20) 21). -295.

(20) Several ROC judicial ex!>erts in industrial relations atso disagree with the BLSL's approach. 23 They feel that it aids in the materialization of the society's legal structure, maxing it less flexible. In reforming country's industria] relations infras tructure, reflexive law would avoid both the characteristic inequities of laissez-faire and the arbitrariness and crudeness of direct regulatory response, inabling the State to provide a struc tural basis for the coordination of interaction among social sub-systems.. ~roductivc labor," such as women and the elderly, to a greater degree than other segments of the labor force, in turn raising product costs and the costs of hiring additional workers, which lowers overall labor producti vity, forcing employer cost structure cutbacks, resulting in a higher level of unemployment-particularly among "marginally productive workers" such as women and the elderly.26 It also is feared that the number of labor disputes might escalate as a resuh of predicted mass unemployment.. In effect, these critical comments point out that the BLSL is structured in such a way as to be anti-entre preneurlal in spiri t and anti-risk taking in thrust-stifling indust:-tal relations in general. The BLSL protects job senority, limits termination benefits and ties retirement benefits to one corporation, in spite of the fact that approximately 96 percent of the ROC's corporations are small or medium in size with an average life expectancy of 15 years. 24. Industrialists and economists a_~ike also insinuate that the relatively poor resuhs of the ROC's economy in 1985 were due primarily to the effects of the BLSL. In that year, the ROC's overall.... unemployment rate jumped dramatically, particularly in the case of women, as Table 12 notes on the next page.. Critics allege that the BLSL also creates a boomerang effect.~" They state that the law protects "marginally. However, on a seasonaByadjusted basis, such causes of alarm appear to be more relative in nature, as indicated in Table 13 on the next pageY This is particularly true in lieu of 1985's low labor turnover statistics (charted in Table 14, as. 23} Yueh-chin Hwang, "Standardgesetz der Arbeitbedingungen und Trends der Chinesichen Arbeitsbeziehung," Cheng-chi Law Review, Volume 3, 1986, pp. 298-311-particularly page 306. 24) See Chi-ming Ho, Chi Shan and Hui-lin Wu, "A Review of the BLSL From An Economic Perspective," The Economic Daily, ROC, (Chinese), August 1, 1985, page 2. Terminology stems from Bulla, Jahrbuch fur Arbeitsrecht, 1964, page 52, while remarking on legal protection of workers. 26) See the analysis of Professor Ching-hsi Chang, "The Content and Problems of the BLSL--A Preliminary Economic Analysis," in 1985 Symposia, Chinese Economists Association, ROC, (Chinese), page 128. 27) See "Asia's Boom Economies Face Testing Times," TIre Asian Wall Street Journal, September 1;)986, particularly comments by Dr.:.Robert_Scalapino, Director of the Institute of East Asian Studies at Berkeley University, California.. -296.

(21) Table ~2:. ROC Unemployment by Sex. 5~---------------. (..II' . ·',u....l..-.!....J.-.~.....!-:-L.:-.~··_·_I....I'll"!I.. Source: ROC "Wonthly Labor Statistics Report, edited by The Statistical Board, The Executive Yuan, Volum~ 154,;Aull,'ust 1986.. Table }3:. ROC Unemployment Rates. AJju~'...\:J Seri~i». 3. 2L-----------~~~--------------~----~~----. ____. • :-+--+-/-_.. Source:. ROC 1!d(Jntldy Labor Statistics Report, edited by The Statistical. Board, The Executive Yuan, Volume 154, August 1986.. - 297-.

(22) /. Table 14: ROC Labor Turnover Rates For Employees on Pa yrolls in the Manufacturing Industry. Source: ROC Manthly Labor Statistics Report, edited by The Statistical. Board, The Executive Yuan, Volume 154, August 1986.. Table 15: ROC Average Earnings Indexes For Employees in Manufacturing Sector and For Consumer Prices. i1'J1'1 xtJ{'''im~. 150 ,'-------f. 120!----------l--------+Df--------~--------r. 90~------~------_+--------i---------r. Source:. ROC Manthly Labor Statistics Report, edited by The Statistical. Board, The Executive Yuan, Volume 154, August 1986.. -298. t~e.

(23) follows), as well as the record high average earnings recorded by em ployees in the manufacturing sector (see Table 15, as noted).28 Further non-confirmation is apparent in the economy's startling preformance this year. 29 In the case of labor disputes, there has been no obvious rise in the number of occurances, as noted in Table 16 below.. labor unions. Additional regulation gives birth to even more rules, which in turn protects labor's interests but stifles economic growt~, while allow ing country's labor unions to remain weak. However, at present, the ROC does not have a choice. In the future, reforms can be implemented. Given the merits of these argu ments, over reaction to the suggestive negative effects of the BLSL should be a voided. In the past, many people have thought that prohibiting children to work would collapse the economy, but history has proven conclusively that such heightened fears were. With regard to critical comments made by jurists, it is true that a VICIOUS circle has been created through the increased materialization of industrial relations law, coupled with the continued existence of weak Table 16.. Labor Disputes in the ROG-Causes and Total Numbers. NumbersoCDifferent-Disputes Requesi--I----------. : • I Ye Tot I ,Dismissal Dismissal' For U npal. d Reduc-· hr t' f: D amages :Compensat' f .B us'mess I0t e ar a With Without Read- . W IOn 0 I R IOn or DIsputes · D'Isputes I" , .ages W ages . equest nJunes Cause Cause i. 1973 82 262: 1974 494; 182 4581 150 1975 371 1 89 1976 380' 113 1977 I 506 187 1978 503 110 1979 700 122 1980 1981 1,0601 200 1982 1,3031I 782 1983 ! 641! 158 1984 ; 9061 167 ----1. 1. I. 29 113 79 52 34 40 59 93 180 266 181 38. 5 7 6 10 6 8 17 2 8 3. 59 49 59 83 84 140 197 181 , 108 182. 5 12 2 4 8 7 4 5. 18 15 21. 12 26 26 18. q. 23 47 42 60 67. 11. 44-. 6 31 20 10. 66 105 168 164 53 106. 39 22 34 10 7 9 77. 13. 11. 32 46. 64 81 77. 84 143 163 263 283 67 1. Source: Department of Labor Affairs, ROC Ministry of Interior, March 1985, as noted iu Table 1 of, Cing-kae Chiao, The Protection of Labor Welfare in the ROC- With Special Reference to the Labor Standards Law of 1984, Harvard Law School Paper, May 1986.. 28) Chien-shien Wang, ROC Vice Minister of Economic Affairs, predicts 1986 GNP growth of nearly 9 percent, while Yao-tung Chao, Chairman of the ROC's Council of Economic Planning and Development sees 1987 GNP growth of 8 percent. See The Asian Wall Street Journal, October 20, 1986. 29) See The Asian Wall Street Journal, October 2, 1986 and November 11, 1986.. 299.

(24) untrue. SO In my humble opmlOn, many critical remarks of the BLSL. should be taken seriously. I agree with Dr. John Fei in his view that the BLSL is anti-productive in economic spirit. However, the social costs of having no law instead are frequently ignored. Caution is warranted. Not enough time has passed to accurately judge the effect of this law on the ROC's economic development or on society as a whole. There is no set of complete empirical evidence on the effects of the BLSL. There is no complete analysis of the effects of the BLSL on entrepreneurial behavior in the ROC. There is no complete study on how this law affects indus trial relations in the ROC. There is not even a credible definition of what constitutes the ROC's labor market. Therefore, under such con ditions, judgement of the BLSL's effects at the present time are pre mature and open entire!y to political inference. V.. O!)nclusion and Ou.tlook. In conclusion, I wish to address five key points. These points concern the future development of industrial relations law in the ROC, post BLSL enactment. First, long-term need and goes far. the BLSL is the result of processes as weB as social constitutional mandate. It beyond stating minimum. standards for industrial relations in the ROC. In some sense, it takes the place of collective bargaining agreements in other countries. As a result, however, it is not entirely adaptable to specific industry need~, reflecting the ever increasing com plexity of the ROC's economic and social growth. It also has negative infuences on future independent union development. Second, it will be necessary in the future to strengthen the role of unions in ROC industrial relations and to develop further the organi zational parts of ROC labor law. Additional materialization is not adviseable. The primary reason why the unions are currently so weak is due to their inability to strike. With the dismanding of martial la",,., the prohibition against strike will be gradually loosened, but not totally eradicated. This points to a slow improvement in the situation. On the other hand, employer employee meetings and work rulles could substitute for increased union power in the developmental stage. Making these mechanisms of indus trial relations work shoaled be the most important objective at present. 'Third, future development of industrial relations law in the ROC should take into serious consideration the increasingly ~ighly technical nature of the economy~s development. The Vocational Training Act of 1983,. 30) Heide Pfarr, in Michael Kittner, ed., Arbeitsmarkt-okonomische, soziale (MUller Verlag, Heidelberg), 1982, page 295.. 300. una rechtliche Grundlagen,.

(25) parallel with the BLSL, should be emphasized more in the future, allowing additional_:' higher level training of the labor force while still employed. To compliment these two laws, a law should be enacted ensur ing that employees not only cannot lose their jobs while receiving ad ditional vocational training, but also are paid for doing so--as is the case in many countries in the industrialized West. Such a measure could also be considered in future amendment::; to the BLSL.. approximately 200 factory inspectors in the ROC-in comparison to a labor force of about 7 million people. 31 While this number must be expanded, it should be noted that even doubling this number of officials won't suffice as such an effort is a mere drop in the industrial puddle. More emphasis on workers participation and organi zation must be made in the future.. III. Finally, from a psychological point of view, it is highly damaging to have Zl situation continue whereby the very people who are supposed to abide by the BLSL---the country's industrialists and entrepreneurs-not only continue to criticize the law but openly express their disobdience of it. This creates a self-defeating cycle of thought which primarily reflects the imbalanced representation of different interest groups within ROC industrial life-specificaHy, the heavy weighting of industry !caders versus very weak unions. In addition, many of the country's work-force does not even know what the BLSL emcompasses, but they have been told that "it's bad" by their emp~.oyers and the media. In part, such an attitude is also a refection of a lack of legal knowledge among the general popu iace. Additional education of the BLSL will bring forth a change of consciousness in this area.. Fourth, no matter whether the law is considered good or bad, it must be enforced. Otherwise, a hedious situation develops "both within and without t'Je ROC. Within, credibility of the law in general in the public's eyes is further weakened, if the law is not enforced. Without, the ROC opens itself up to further attacx from its trading partners on the issues of "unfair comnetition" and "mis-pricing." In either case, no enforcement will lead to a situation that is worse than not having the BLSL at aU. At present, the biggest problem with enforcement is the lack of current administrative capacity. According to the latest statistics, there are slightly more than 100 existing labor administration officials coupled with. 31) See The China Times Daily, ROC. (Chinese), Nove-mlx'r 18, 1986, page 2.. 301.

(26)