Holiday measure will cost NT$18bn: business leaders

By Crystal Hsu and Lisa Wang  /  Staff reporters

Industry leaders yesterday voiced strong objections to a bill introduced by the Democratic Progressive Party (DPP) to settle a dispute on a proposed reduction in the number of national holidays, saying it would create significant additional personnel costs for firms in multiple sectors.

“We firmly oppose the DPP’s bill to cut national holidays and give new workers annual leave, as business representatives were not consulted,” Chinese National Association of Industry and Commerce chairman Lin Por-fong (林伯豐) said in a statement.

The opposition stems from the introduction by DPP lawmakers of proposed amendments to the Labor Standards Act (勞動基準法), which seek to cut seven national holidays and allow new workers to qualify for annual leave.

The amendments stipulate that new employees would qualify for three days of annual leave after working for six months in the first year of employment, increasing to 10 days after two years and 14 days after four years of employment.

The legislation is expected to cost the private sector NT$18 billion (US$563.4 million) per year in additional personnel costs, with the extra days off creating NT$9 billion in staffing burdens, assuming 50 percent of the working population of 7.8 million has worked less than five years, the association said.

The extra burden would be heaviest for small and medium-sized enterprises, which account for 98 percent of companies in the nation, said Lin, who is chairman of Taiwan Glass Industry Corp (台灣玻璃).

Some companies might freeze pay raises or scale down operations to remain profitable, while others might hire temporary or outsourced workers, who do not qualify for annual leave or other regular compensation, he said, adding that some firms might even move their operations overseas to save on labor costs.

Extra annual leave would make it more difficult for companies in the service sector to arrange their employees’ work schedules, said Lai Cheng-yi (賴正鎰), head of the General Chamber of Commerce and chairman of Shining Construction Group (鄉林集團).

The government should have discussed the matter with trade groups before introducing the legislation, Taipei-based Chinese National Federation of Industries secretary-general Tsai Lien-sheng (蔡練生) said.

“It is not practical to standardize annual leave between the private and public sectors,” he added.

However, MediaTek Inc (聯發科), the nation’s largest handset chip designer, has said it does not plan on reducing its employees’ annual days off after the amendments are passed.

Changes to labor regulations have “nothing to do with the company’s competitiveness,” MediaTek vice chairman Hsieh Ching-jiang (謝清江) told reporters last week.

The chip design industry has its own cycles, Hsieh said, adding that engineers work based on the progress of their projects and take their vacations accordingly.

More than 9,000 MediaTek employees are based in Taiwan, accounting for more than 60 percent of the company’s 15,000 workers worldwide, he said.

Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, recently said that it would maintain its policy of providing more days off than required by the nation’s labor regulations.