Abstract
This article examines nonstandard or precarious workers in Taiwan since 2000. It traces the origin of nonstandard work back to increasing pressures faced by business in global competition and financial crises. Its emergence was also accompanied by the decline of the traditional informal labor sector and the increase of unemployment. It is argued that the issue of precarious work can mainly be explained by the rise of the “informalization” of employment among the formerly employed. The three types of the nonstandard work and dispatched work are discussed, along with specific case studies. Reactions from labor movements and social critics to the alarming problems facing precarious dispatched workers have finally caught the attention of the government. The concluding section assesses the policy responses to the growth of precarious work.
Today’s Taiwan is a typical export-oriented industrial capitalist state with a very active global trading sector that has developed over the years. At the same time, Taiwan has also witnessed increasing concentrations of income and wealth in the hands of the rich and powerful and worsening social and economic inequality. By all accounts, workers have become a disadvantaged social class and experience more internal differentia and vulnerability.
Taiwan has gone through a great economic structural transformation in the past 60 years, from an agrarian to an industrialized country. Such economic transformations since the 1980s have been particularly evident. The share of agriculture in GDP dropped to only 6.34% in 1980, further declining to 3.65% in 1990, 1.94% in 2000, and then only 1.33% in 2010 (see Table 1). By 1981, the economy had been transformed into a modern capitalist industrialized economy with the service sector taking the lead (53.26% share of GDP), followed by the industrial sector (40.38% share in GDP). After 30 years, in 2010, the significance of services in GDP had increased to 63.92%, whereas industry declined to 34.78%. Taiwan pursued a state-led capitalist industrialization strategy of import substitution and export promotion in the postwar era, leading to the rise of capitalist industrialization, followed by the emergence of a postindustrialized society. This has led to a shift in the labor force allocation and employment structure in the past 30 years with a sharp decrease in the agricultural labor force (from 19.50% in 1980 to only 5.24% in 2010) and an increase in service sector employment (from 37.98% in 1980 to 58.83% in 2010), whereas industry also experienced a gradual drop (from 42.52% in 1980 to 35.91% in 2010). Taiwan has also experienced high population growth and rapid urbanization since the 1960s.
Basic Economic Background of Taiwan (1980–2010)
Source: Directorate-General of Budget, Accounting and Statistics, Executive Yuan.
Data in the 1981 column are from 1980 for GDP at current prices, average disposable income per household by disposable income quintile, and economically active population by sector.
However, it was the 1980s that witnessed the worsening of income inequality that accompanied the economic growth and expansion. Between 1980 and 2010, the ratio of the incomes of the highest 20% to that of the lowest 20% grew from 4.17 (1980) to 6.19 (2010). This pattern of increasing income inequality in Taiwan is also evident in the rise of the Gini index from 0.278 (1980) to 0.342 (2010). In other words, Taiwan was not able to avoid the Kuznets “growth-inequality” trap after the 1980s, though it was praised and regarded by many development scholars as a model for “growth with equity” between 1960 and 1980.
Being an export-oriented economy since the 1960s, Taiwan’s economy and labor market is quite responsive and sensitive to external global economic competitive pressures. The labor force and total employment have been steadily growing over the past three decades. The unemployment rate remained relatively low, less than 3%, between 1980 and 2000. On the other hand, the unemployment rate soared from 2.99% in 2000 to 5.21% in 2010 (see Table 2). The absolute number and ratio of employees to total employment has increased from 6,547,000 (64.4%) in 1980 to 8,103,000 (77.2%) in 2010. “Own-account workers” and “contributing family workers,” the two major segments of the “self-employed,” experienced noticeable declines over the same period. This illustrates changes in the different types of employed, that is, the decrease of “self-employed” and the increase of sole “employees” between 1980 and 2010.
Basic Employment Data of Taiwan (1980–2010)
Source: Directorate-General of Budget, Accounting and Statistics, Executive Yuan.
Though the absolute number of “own-account workers” rose from 1,341,000 in 1980 to 1,523,000 in 2000, and then dropped to 1,329,000 in 2010, the percentages of such workers steadily declined from 20.5% (1980) to 12.7% (2010). The changing pattern can also be observed for “contributing family workers”; the numbers and percentages of this type of worker between 1980 and 2010 fluctuated over the years, from 701,000 (10.7%) in 1980, to 744,000 (9.0%) in 1990, then to 710,000 (7.5%) in 2000, and finally down to 585,000 (5.6%) in 2010. Furthermore, the total absolute number of “self-employed workers” increased between 1980 and 2000, then dropped between 2000 and 2010. The percentage of self-employed workers, however, has experienced steady declines for the past three decades, from 31.2% (1980) to 18.3% (2010). All in all, the eventual decline of the workers in the “informal employment sector” and the soaring of unemployment rate after 2000 inevitably changed the “employment landscape” in Taiwan.
It is important to say that work in Taiwan has not always tended toward retaining its “standard” form; rather, some work has been retained in other “informal” and “self-employed” forms. This unique class and employment structure in Taiwan could well explain why Taiwan still has a relatively smaller amount of “nonstandard and precarious work” as defined strictly by the above modern capitalist employment relations, in contrast to other industrialized capitalist countries in Northeast Asia, such as Japan and South Korea between 2000 and 2010 (Tarohmaru, 2011).
Informal sector employment is another useful term to describe all types of “workers” outside the standard employment relations who are usually regulated by legal contracts between employees and one employer. They can certainly be classified as engaging in “nonstandard work,” according to the above definition. They do not have bosses to pay their salaries, and their work may be unstable and insecure. They bear the risks of their employment and are therefore vulnerable, but their work is not dictated or regulated by any form of modern and formal employment relationship. In this sense, the self-employed, especially those small owners not hiring workers outside their family members, and their contributing family workers, may be outside the category of “precarious workers” in “late capitalist labor markets,” as coined by Vosko (2010). As for those own-account workers who are still seeking employers to hire them and pay for their services and time, they can generally be considered as “part-time workers” or “temporary and contract workers,” and they do actually engage in both nonstandard and precarious work.
In today’s Taiwan, there are still a sizable number of self-employed workers, accounting for 18.3% of the total employment in 2010 as mentioned above, and they are outside the regular and regulated employment markets. The very existence of such self-employed workers could in fact absorb some of the labor force or temporary out-of-job workers and keep them out of the official statistics of different counts of “nonstandard workers.” That could be the case in Taiwan before 2000. If there were no opportunities or space for the self-employed, the number of “nonstandard workers” could have been larger.
A close look at the different employment status of nonstandard workers in 2010 shows that 86.4% of part-time workers are from the category of employees, 8.4% from own-account workers, 4.6% from contributing family workers, and only 0.3% from (small) “employers” (i.e., small owners). More than 98% of the temporary or dispatched workers are drawn from sole employees, and merely 1.5% are drawn from the self-employed (no employers at all). Most important, the two types of nonstandard or precarious workers do not draw any noticeable numbers from employers (C.-C. Liu, Lin, Lee, & Wang, 2010). To put it differently, the emerging nonstandard sector of labor mainly drew workers from the employed population. That demonstrates a trend of “informalization” of the formal employment market, whereas the traditional informal sector has been shrinking over the past decades.
Taiwanese businesses and government began to feel the real impact of macro-level economic pressures in the late 1990s because of increasing global competition and crises. They were forced to create flexible employment arrangements to cut costs and remain competitive. Such emerging flexible labor markets could be observed in both formal and informal sectors. Formal employment became less standard and turned “informalized,” whereas informal work became even more unstable and insecure. The rise of flexible or nonstandard employment and growing unemployment are closely related to each other (Chang, 2006; Ko, 2005).
In Taiwan, narrowly defined nonstandard and precarious employment grew into a noticeable social phenomenon in the labor market in 2000 after the first financial crisis. It turned into an alarming social problem in the second financial crisis and an economic tsunami immediately after 2007. The immediate rationale behind it was that business organizations needed to be more competitive in the face of increasing pressure from economic globalization and hardships from economic recession by cutting costs of the routine workforce. In some ways, the rise of nonstandard employment, as well as its consequences for precarious work, has been a newly emerging social and economic issue that has attracted increasing public attention and policy debates in the past decade. The greater economic insecurity, work instability, social inequality, and related labor-management disputes caused by precarious work are central to the growing concerns among labor movements and labor officials (Cheng, 2008, pp. 60-79).
There are many related terms to describe the nature of employment that is not typical or standard, such as flexible, contingent, external, vagrant, peripheral, temporary, unstable, outsourced, and dispatched. Also, there are normative terms used to portray the human consequences of atypical employment for these workers, such as risky, insecure, and precarious. In this article, for clarity of discussion and argument, I focus on the types of nonstandard employment with precarious work conditions in Taiwan’s capitalist labor markets.
Profile of Nonstandard and Precarious Work in Taiwan
The earliest official, but incomplete, statistics on nonstandard employment in Taiwan date back to 2001, but only in the two categories of “part-time workers” (fewer than 35 hours per week) and “fixed-term contract temporary workers” (no more than 3 months). The new category of “dispatched workers” was introduced in 2002. Table 3 presents the numbers (generated from different sources) of nonstandard and precarious workers in these three categories between 2002 and 2006. It was clear that in the first half of the 2000s, Taiwan witnessed a steady increase in nonstandard employment, from 224,554 (2.39%) in 2001 to 470,147 (4.64%) in 2006. Almost half a million Taiwanese workers were engaged in one or another type of atypical work, though its proportion of the total employed population might still be quite low. However, there was steady growth of a new type of temporary worker, workers who are organized and dispatched by institutionalized employment agencies.
Numbers and Percentages (in parentheses) of Three Types of Nonstandard Workers in Taiwan (2001–2010)
Sources: Various yearly statistical reports of Manpower Use Surveys by Directorate General of Budget, Accounting and Statistics, Executive Yuan, ROC (Taiwan). For 2008–2010 data, they were reclassified by C.-H. Lee (2010b).
Entering into the second half of the past decade, in both absolute and relative terms, Taiwan’s nonstandard employment has been further increasing significantly. Excluding 2007 (when the official statistics faced problems of inconsistency and error), in the years of 2008 and 2010, total nonstandard work jumped to 924,000, accounting for 8.8% of the total employed population. Part-time workers increased almost fourfold, from 102,000 to 384,000, in a decade. The number of dispatched workers increased close to fivefold, from 76,574 in 2002 to 353,097 in 2010.
Among the three types of nonstandard and precarious workers since 2001, the most significant has been “dispatched workers” (派遣工), now 353,097 (domestic alone) in number, accounting for 38% of all nonstandard workers (which total 924,000) and 3.36% of the total employed population in 2010. It is an organized and sophisticated atypical employment arrangement that the dispatching agencies have created to provide “needed” labor to many public organizations, schools, and private companies where low-level work opportunities (such as cleaning, telephone operation, clerical work, custom service, and telephone marketing) exist, allowing these companies to hire an “external,” “contracted,” “flexible,” and “nonregular” work force instead of their own permanent and steady employees. As pointed out previously, dispatched workers appeared rather recently in the official record in 2002, and it has been growing quite quickly. It is important to mention that among the three categories of nonstandard workers, the work situation of the dispatched workers is the most complex as they have to sign legal documents that regulate the unique employment relations among themselves, the dispatching agencies, and the actual client companies.
In addition to the rise of domestic dispatched workers since 2002, there was already another type of dispatched workers from other Southeast Asian countries present in Taiwan in the early 1990s. By 1994, there were 240,000 foreign workers dispatched from Southeast Asia. This increased from 314,034 in 2004 to 338,755 in 2006 and to 365,060 in 2008. By 2010, foreign dispatched workers jumped to more than 379,653. These dispatched foreign workers are not included in the statistics in Table 3, as they are not considered to be part of the domestic labor force and the employed population, though, in reality, these foreign workers do take part in Taiwan’s day-to-day employment activities. Hence, in actuality, Taiwan currently has about 1,303,653 precarious workers, of which 732,750 are dispatched laborers. The dispatched segment constitutes more than half (56.20%) of the total number of nonstandard and precarious workers.
Recent data also reveal that nearly half of nonstandard employees are female. This constitutes 7.86% of women’s total employment, higher than men’s, which is 6.18%. They tend to be either very young, with about 25% between 15 and 24, or very old, with more than 10% older than 65. They also tend to be less educated (with more than 10% having only a middle-school-level education). In both age and education backgrounds, nonstandard workers are marginal as well. Among them, close to 20% are in the service-related sector and another 16% are in construction work. In most cases, they are hired to work production, service, farming, and clerical-related jobs (Directorate General of Budget, Accounting and Statistics, Executive Yuan, Taiwan; DGBAS, 2010).
In addition to the above “peripheral” demographic features, the “weak” work situation experienced by Taiwanese nonstandard and precarious workers today is reflected in the fact that, compared to standard and regular employment, precarious workers are not protected by long-term employment relations with regulated contracts, receive a lower salary (80% with lower pay than the minimum salary set by the government), have no pension provision, do not have the opportunity to receive job training, and do not have any other welfare or benefits besides salary. There is no role played by a related government agency to monitor work contracts or to protect concerned employees. No protection can be sought from a related labor union. No proper mechanism is available to settle disputes when they occur. They are simply hired to sell their “commodity of labor.” They are no longer “workers” in a classical class sense or according to the common definition of “employer–employee” relations. Finally, they stand alone without workers’ solidarity. Overall, they are considered to be the primary constituents of the “working poor” in today’s Taiwan (C.-H. Lee, 2010a, p. 17).
Some critical scholars even attribute the rise of flexible labor, or nonstandard employment and precarious work, to the rollback of Taiwan’s labor rights in the 2000s. The so-called flexible trends in the labor regime in the form of deregulation, deunionization, and casualization since 2000 have also been criticized for giving rise to the above-mentioned nonstandard and precarious work (M.-C. Liu, 2006).
Furthermore, according to a 2011 Manpower Use Survey conducted by DGBAS, mentioned above, among all nonstandard workers, 15.03% expressed a desire to change their “work,” with another 8.6% wishing to get an additional “job.” Thus, close to one fourth (23.63%) of today’s part-time workers, temporary workers, and dispatched workers are not happy with their current “work situations” or consider their present work not adequate to finance their daily needs. Such desperate sentiments were particularly strong among the nonstandard workers in their most productive ages, 25 to 44. Almost a third (31.39%) wanted to change or add to their work. A similar dissatisfaction can also be detected among the high-school-educated precarious workers, with 27.46% of them repeating the same sentiment.
In contrast, the same survey data revealed that as few as 6.64% of the regular and standard workers wished to change their present job, with the youngest employees (aged between 15-24) having the highest desire (13.42%) to seek different work. More important, the data also disclosed that the average regular monthly income of the standard employees was NT 35,922 (roughly US$1,197.40), whereas the nonstandard and precarious workers were paid less than half that (NT 14,382, or US$479.40; DGBAS, 2011).
Characterization of Taiwan’s Dispatched Workers: Domestic and Foreign
As indicated earlier, the rise of the dispatched workers not only contributed to the changing “workscapes” in Taiwan in the past decade or so but also constituted a very unique and new “subclass” of the Taiwanese working class. They are certainly atypical workers by all accounts in conventional labor markets with a regulated bilateral employer–employee relationship. It may be quite true that loyalty seems not to be expected or demanded by the employers of nonstandard workers. But compared with part-time workers and contract temporary workers, the dispatched workers are different as they are not legally bound or accountable to the organizations that supervise their work but rather are legally signing a labor contract with their employer, the “third-party” dispatching (staffing) agency. The triangular arrangement of dispatched work among the three parties concerned is shown in Figure 1.
A triangular scheme of dispatched work in Taiwan
Ko, Yeh, and Tsai’s (2004) study of eight dispatching agencies (four local, three foreign, and one joint venture) provides important facts regarding Taiwan’s dispatched workers and the related issues concerning dispatched workers and their unique “employment relations.”
First, the identity of the boss (employer) has been confusing and ambiguous to all dispatched workers. As pointed out, it is the dispatching agency that legally hires the workers, but it is the client company that actually uses and supervises the workers. For example, in Academia Sinica’s Humanities and Social Science Building, cleaning is completely subcontracted to a private dispatching labor agency, HT Environmental Cleaning Company, through a yearly procurement contract of labor service. Under the contract, HT Co. dispatches 12 “regular” cleaning workers to the building for the job with an agreed-on total budget that covers all salaries, labor and health insurance, pension allowances, tools, cleaning supplies, and maintenance for the whole year. Academia Sinica is the client company, whereas HT Co. is the sole legal employer of the 12 dispatched workers.
In the contract, it is even written that the workers are HT employees and have no direct legal or employment relationship with Academia Sinica. All requirements of labor relations stipulated by the Labor Standard Law are the responsibility of the dispatching agency (HT Co.). Even when work accidents occur, Academia Sinica will not in any way be responsible. However, Academia Sinica had requested to set the minimum monthly salary for the cleaning workers and foreman and preferred hiring workers from the neighboring Nan Kang community.
Under such a strange and novel employment structure, many controversies over labor disputes and a variety of violations of related labor laws could inevitably develop. Currently, because of the lack of proper laws and regulations being enforced, those controversies have not yet been settled.
Second, the dispatched workers all experienced high job turnover because their work opportunities have been unstable and short term in nature. They do not usually enjoy any promise of long-term benefits, though sometimes they may be paid competitively. Again, one cannot really expect a sense of collective loyalty or commitment from the dispatched workers toward their two ill-defined “employers.” However, there may be a difference between the constant hire and the registered temp, with the former perhaps developing more loyalty to the company in which he or she works.
Third, the following people are likely to be dispatched workers: students, fresh entrants or reentrants to the job market, the temporarily unemployed, people hoping for quick money or moonlighting, and the recently retired. In light of the relatively limited qualifications of these dispatched workers, they are frequently sent to do lower-level or simple manufacturing work or to handle service jobs.
Fourth, there is no clear sign that there will be a more professional class of dispatched workers. Nor is it likely that the dispatching agencies will provide training for different dispatching requests to make the workers concerned more competent and qualified. The current dispatching agencies have not yet perceived a demand for skilled or professional dispatched workers from the various businesses.
Finally, the study also revealed the rationale behind client companies using dispatched workers. Saving money on labor costs was the most important reason, followed by the need for flexible labor for a temporary or special project without paying more in salaries than necessary. The dispatched workers are also used to substituting for regular workers on sick or holiday leave, or they could be seen as intermediate workers who could eventually be hired as regular workers or possible outsourcing. It is interesting to note that avoiding the risk of being a long-term and legal employer was not mentioned as a reason for using dispatched workers.
Another corporate survey, done by the Council on Labor Affairs (CLA, 2006), also revealed different aspects of how business organizations hired dispatched workers. Among 9,264 sample businesses surveyed, 729 hired dispatched workers, which is about 7.9% of the total. Also, 41.2% of public businesses employed dispatched workers, whereas only 7.3% of the private businesses did. One estimate showed that by January 2010, there were as many as 15,514 dispatched workers out of 24,977 temporary employees hired by the Executive Yuan–related government agencies and offices. Local labor activists criticized the central government for setting a bad example in using and exploiting labor (Lin 2010).
The above survey reported that 8.3% of the industrial sector and 7.4% of the service sector used dispatched workers. Among specific businesses, 28% of postal and insurance companies used dispatched workers, as did 23.2% of water, electricity, and fuel companies and 23% of medical insurance service companies. Larger private establishments were more likely to use dispatched workers. There were 47,123 dispatched workers hired by 729 business units, with an average of 65 workers hired per business. If they were hired in the public sector, they were likely asked to do cleaning (30.1%), mechanical (26.7%), general affairs (10.3%), or security (10.1%) work. If they were employed in private business, they were assigned to routine business assistance (17.1%), mechanical operations (13.2%), cleaning work (7%), telephone service (6.9%), or marketing service (4.6%). Overall, dispatched workers were hired to take care of basic and routine tasks, though diverse jobs were also observed. Put in more concrete terms, in today’s Taiwan dispatched workers are most frequently used by businesses in the financial and stock sector for routine work, in metal manufacturing industries for equipment maintenance and machine operation, in transportation, communication and logistics businesses for telephone service and shipment, in electronic assembling manufacturers for mechanic operations, in the computer, information, and visual sector for field operations, in transportation equipment manufacturing for mechanical work, and in medical and health-related services for cleaning work.
This survey also found that the major reasons behind hiring dispatched workers for those client businesses were to cut down labor costs (50%), to take advantage of flexible work force arrangements (50%), and to speed up the recruitment of needed workers (48%). For the public sector, it was to save personnel costs resulting from budget cuts (74%). For the private sector, it was the flexibility to hire qualified necessary labor (50%).
Dispatching Agencies’ Violations of Labor Laws
A survey done by the CLA in 2010 revealed that 86% of the dispatching agencies have violated the Labor Standard Act on at least two counts (Hsue, 2010). In particular, dispatching agencies have not observed the existing labor laws regulating “employment relations” and have violated concerned workers’ rights and benefits. The ambiguous identities of the employer and the corresponding employee prevent the dispatched workers from protecting their own labor rights or bargaining their welfare collectively.
The following cases illustrate the disputes involved more concretely. The first case occurred at National University of Sports, where the dispatched cleaning workers were demanded by the dispatching agency to return some of their salary as a service fee and were told that they should also pay for their health insurance and pension deposit. In the end, the dispatched workers’ actual pay was only NT$20,000 a month (about US$667) rather than NT$30,000 (about US$1,000), as originally agreed. The second case was the sudden death of a dispatched worker during the late-night shift at Wintex Electronic Company, where the family suspected the death was from being overworked and exhaustion.
The third case was related to dispatched workers working as museum guides when they were asked to pay back NT$8,000 (about US$267) for the dispatching fee without receiving any supervision or assistance. They were also required to work like “guards” so that, by the existing labor laws, they could not benefit from national holidays or sick, wedding, or funeral leaves and had to work the late-night shift without overtime compensation. Female workers were required to present pregnancy test results before they could renew their contracts. Even the local government’s gender equity commission did not find the dispatching agency’s unfair treatment illegal (Coolloud, 2011a, 2011b).
The most recent investigatory report disclosed by the CLA (2011) further revealed how the 70 dispatching agencies surveyed had violated related labor laws. By April 1, 2008, the CLA had passed regulations that stipulated that dispatching agencies were required to fulfill related legal obligations as “employers.” Those agencies happened to be the primary agencies providing dispatched workers for the three major science parks in Taiwan, namely, Hsin-Chu (Northern), Central, and Southern Science Parks. It was found that a total of 179 incidents of violations were deemed to be not in accordance with the Labor Standard Act, Gender Equity Law, or Labor Retirement Payment Law. The violations included failure to set up rules governing work hours and overtime, providing no additional pay for overtime work, failing to publicize the related regulations on sexual harassment, violation of related norms of retirement payment, and failure to put workers on insurance protection schemes (CLA, 2011).
Table 4 presents the most recent statistics on dispatched foreign workers from 2000 to March 2012. In 2011 there were 425,660 dispatched foreign workers in total, and by March 2012 the number had increased to 433,956. Among that group, 41.8% came from Indonesia, 22.3% from Vietnam, 19.3% from the Philippines, and 16.5% from Thailand. More than half (53.72%) of the foreign workers were recruited to the manufacturing sector, and the remaining 46.27% were in the general category of “social service sector,” such as household help and caretakers in hospitals or at homes for the elderly. The manufacturing jobs were mostly held by male blue-collar migrant workers, whereas the service jobs were predominantly occupied by female foreign workers.
Dispatched Foreign Workers in Taiwan, 2000–2012
Source: Council of Labor Affairs.
Most of the cross-border movement of these foreign dispatched workers was through employment brokers. This brokerage system includes legal contracts signed by the foreign workers, brokerage agents, and the client companies or families. Moreover, there are official lists of charges and expenses set by both the government of Taiwan and the country from which workers originated, to be paid by the foreign workers themselves, such as income tax, labor and health insurance, commissions or fees, health check-ups, room and board (in Taiwan), training, passports, exit permits, visa to Taiwan, airfare, and airport tax (from Vietnam). Normally, a foreign worker, after having worked in Taiwan for 2 years, will have earned approximately US$5,000. But in most cases a foreign worker cannot save any money for the first 2 years because he or she has to pay back US$6,000 in loans originally borrowed to pay for all his or her expenses before leaving the country. According to a research report done by Wang and Chang (2011), a foreign worker finally makes a profit only in his or her third year.
Also, a number of human right violations were detected in the brokerage systems. These include exploitation, unfair charges of service fees, mistreatment in the workplace, and sexual harassment. The bilateral brokerage system of dispatching migrant workers from Southeast Asia has been tightly institutionalized and remains intact in spite of attacks from labor rights and civil society organizations. As pointed out, the bilateral dispatching agencies could charge the dispatched migrant workers more than 1 year of salary for fees of any kind.
Unlike the local dispatched workers, migrant workers can join existing labor unions at the workplace, but they are usually not invited to do so. They are, by law, not allowed to establish their own unions. They are permitted to stay in Taiwan for a maximum length of 9 years of employment, but a recent amendment to the Employment Service Act on January 19, 2012, extended it to 12 years. Such a legal change was not without controversy, as the amendment to the act was speculated to be a way to reward big businessmen who were openly backing and supporting the reelection of the incumbent, President Ma. It was also criticized by local labor organizations for the lack of leverage available for cheap labor and because local workers would suffer because they would lose jobs to migrant workers (Shih, 2012).
Reactions From the Labor Movement and Local Critics
The first large-scale protest against unstable and exploitative labor conditions of precarious work, especially for dispatched workers, was initiated and staged at the 2010 Labor Day rally by the labor movement. At that demonstration, four major demands were made by labor movement organizations. At the top of the list of demands was to “stop labor dispatching, labor outsourcing and reject labor flexibility.” The other three demands were to “insist on union autonomy and independence, fight for labor rights of solidarity,” “monitor ECFA by democratic procedures, workers’ rights must be protected in the negotiation with China,” “all employees should benefit and be protected by pension coverage, and the government must pay for the loss of labor insurance scheme” (Hong et al., 2010).
On December 12, 2011, another demonstration took place in Taipei, calling on the government to better protect the rights of dispatched foreign workers by giving them regular days off and establishing a minimum wage. Holding up signs that read “Where are my days off?” in Indonesian, Thai, Vietnamese, and Tagalog, the participating migrant workers, civil society activists, unionists, and students demanded vacation time for this group of dispatched migrant workers in Taiwan. The Presbyterian Church’s Labor Concerns Center, one of the protest organizers, stated that there were about 200,000 foreign domestic workers in Taiwan, and only 5.5% received regular days off on public holidays and weekends.
As many as 42.4% of foreign workers did not have a single day off in 2011. Moreover, they worked, on average, 13 hours a day. Employers usually take their passports, so they are under the constant threat of being fired and sent back to their home country. Most of the foreign workers do not dare resist because, to come to Taiwan, they borrowed a large amount of money to pay for the brokerage agency, roughly NT$200,000 (US$6,667), and they need to make money to pay back the debt (Loa, 2011).
Criticisms from civil society have focused on the precarity of the dispatched workers. A popular slogan, “The age of failed dispatch,” was coined at a workers’ film festival in 2010 to depict the miserable situation faced by the dispatched. The dispatched workers were even described as the modern “coolie” workers for sale at the price of NT$15,000 (US$500) a month. In the materials printed by the organizers of the film festival, dispatched workers were portrayed to be “cheap,” “enjoying no benefit provision, no promotion opportunity,” and were “easily disposable.” The satirical expressions of the dispatched workers could also be found in the so-called “manual” of using the dispatched: “do not let them feel that they are individuals with dignity,” “make sure to kill their illusions of promotion or benefit,” “keep their salary at the lowest possible level,” “use them as instruments to lower the regular employees’ status and their salaries,” and “ignore their social and economic needs.”
Furthermore, powerful criticism condemned the treatment of dispatched workers as a “commodity” or “machine” rather than “human,” and that they could be recalled or even taken back for disposal when they were found to malfunction. How would malfunctioning even be detected? The dispatched workers faced being “recalled” or “disposed of” when any of the following were observed: low work enthusiasm, demanding a pay raise, asking for benefits, requesting promotion, suffering from depression or thinking about other rights. The demands of labor organizations and criticism from civil society have raised public consciousness of the rising social problem and have finally caught the attention of the government.
Conclusion: Assessing Policy Responses
Labor movement activists and civil society critics have been concerned about the precarious nature of nonstandard labor in general and the dispatched workers in particular. Because of the precariousness incurred at work, they demanded proper legal protection of labor rights for this subclass of Taiwan’s working class. The original request was to have a separate labor law to govern atypical work and dispatched workers. A separate Dispatched Work Law was drafted by the CLA in 2004, but it went nowhere because no consensus could be reached among all parties. A new policy move was made in January 2010 to amend the existing Labor Standard Act by including special clauses on dispatched work so as to regulate the rising new type of work and to protect dispatched workers’ rights. As a result, the original idea to draft a separate Dispatched Work Law was finally dismissed.
In July 2011, a survey was conducted among officials of related government agencies about what to include in the separate clauses for dispatched workers. The contents cover a wide range of issues, from the financial requirements (with the minimum capital of NT$30 million, equivalent US$1 million) to set up a dispatching agency, to detailed stipulations of the related obligations and rights of the concerned parties. Currently, the drafting process is still under way. So far, preliminary policy understandings have been reached among labor organizations and concerned government agencies. However, the response from business is not yet clear. It is expected that they will state that it is in the interests of business to have more flexible, less regulated policies.
The most basic consideration is to set a limit on the number of dispatched workers in any business establishment. In principle, the dispatched workers cannot exceed 3% of the total employees of a company, or 5% if formally approved by the respective labor–management meeting, or 20% if officially endorsed by the unions concerned. The second rule is that dispatched workers are not allowed to perform jobs in some specific industries or professions, for reasons of public security and labor safety. These six industries and tasks are medical personnel, security staff, aviation specialist, pilot or assistant pilot of yachts or boats in a ship’s company, mass transit driver, and mining worker. The third regulation is that no dispatched workers can be used and hired by the client companies at a time when their regular workers are on strike.
Though it is desirable to produce a fair, proactive, and workable specialized chapter on dispatching workers within the Labor Standard Act, there are remaining disagreements among union, business, and government. It is not agreed on whether foreign migrant workers are to be included in the policy. It is the conviction of labor and related labor law experts that the client companies should also be required to coshare legal responsibility along with dispatching agencies, to take care of workers’ well-being and rights, such as unpaid salaries, workplace hazards, and sexual harassment. But business may not share the same view. The same disagreement can also be found on whether or not the dispatched workers can have rights to join unions, welfare associations, or labor-management meetings.
Another point of debate is how to determine the reasonable rate of commission or service fee to be charged by the dispatching agencies. The current practice is that the dispatched workers are charged as much as 20% to 30% of their monthly salaries. Can the different types of dispatched workers, such as preregistered workers, on-the-spot called-in workers, and constant hires, be charged the same rate of commission? Among the three categories of dispatched workers, as their employment relations are quite different, can one regulation be sufficient to govern and protect their work conditions and related rights?
The draft of the proposed chapter on dispatching workers in the Labor Standard Act makes it clear that dispatched workers are not temporary workers and after 1 year of working in one specific workplace, they can ask to be employed as regular employees. It is unlikely that the client companies will agree to the requirement without further negotiation and debate.
However, some dispatching agencies did express positive attitudes and feedback on the revision, and they welcome the separate chapter on dispatching work in the Labor Standard Act as it could serve as a total assessment of the labor dispatching business since 1997. The general manager of the Swiss-based dispatching agency Adecco shares this view. Adecco Taiwan was established in 1989 and is now considered to be the biggest foreign dispatching firm in Taiwan. Again, there is no consensus among the different dispatching agencies and various client companies.
Moreover, from the complexities of the issues raised and the debates posed in an international forum on ensuring rights of dispatched labor held by the National Federation of Production Labor Unions on December 10 and 11, 2009, just one month before the CLA officially proposed its amendment, it is clear that the legalization and institutionalization of the rights for the dispatched workers have been long overdue, but their completion may inevitably take some time to achieve. As for the other two types of nonstandard workers (part-time and fixed-term contract temporary workers), it is even more questionable whether equal attention will be paid to their labor rights anytime soon.
Footnotes
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
This article is a part of a Sawyer Seminar Program that received support from the Andrew W. Mellon Foundation. The author is grateful for the opportunity to attend workshops held in Seoul and supported by the Institute of Sociology at Chung-Ang University and in Chapel Hill supported by the Carolina Asia Center, University of North Carolina at Chapel Hill.