2011-12-26
Council of Labor Affairs: Unpaid Leave Not to Exceed 3 Months
Taiwan’s Council of Labor Affairs (CLA) announced on December 2, 2011 that companies trying to cope with slowing demand should not institute unpaid leave for periods exceeding three months.
The CLA has proposed in 2008 an agreement between companies and workers to regulate unpaid leave during times of economic slow-downs. Now, CLA has proposed guidelines for unpaid leave in order to formulate proper regulations, and expects the new guidelines to protect workers’ rights and reduce disputes.
The CLA advised that a company’s first measure for dealing with slowing demand should be to reduce bonus payments to executives, such as general managers, directors and supervisors. Then, only if the company still faces financial problems, can the company reduce its employees’ work hours with the consent of the employees. The new guidelines prescribed that any decision to adopt unpaid leave must be the result of negotiations with the individual workers and labor unions, and the periods of leave cannot exceed three months. If the company wants to extend the period of unpaid leave, approval of the employees is required for such extension.
Furthermore, when the company institutes unpaid leave, salary cuts cannot leave workers with pay that is below the minimum wage. The CLA also advised companies that they will be required to report their furlough plans to the local labor department.
Although the guidelines are not binding as law, Wang, Ju-Hsuan (王如玄), the Minister of the CLA, still believes that the guidelines will influence the decisions of companies with respect to leave policies.
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