Enterprises Cannot Pay Less Than Basic Pay Despite Unpaid Leave: CLA

Taipei, Dec. 17, 2008 (CENS)--Domestic enterprises should not cut the monthly pays for their employees below the legal basic pay of NT$17,280, despite the practice of unpaid leave amid the current economic recession, said Jennifer Ju-shuan Wang, minister of the Cabinet-level Council of Labor Affairs (CLA) yesterday (Dec. 16).

The statement differs from the interpretation of the CLA last Friday (Dec. 12) allowing enterprises to pay employees less than the basic pay, due to the factor of unpaid leave, a common practice being embraced by growing numbers of domestic enterprises amid the deteriorating economy, including the two major IC foundries, Taiwan Semiconductor Manufacturing Corp. (TSMC) and United Microelectronics Corp. (UMC).

The policy reversal is apparently made under the heavy pressure of labor organizations and legislators, who criticized several the earlier interpretation, over the past several days.

Wang explained that the earlier interpretation of the CLA was made in order to avoid enterprising resorting to layoff to cope with their difficulty. She noted that one factor for the policy change is the existence of improved job security system which can cushion the effect of layoff, including subsidy for the unemployed, assistance for job seeking, and assistance for vocational training. Wang added that unpaid leave cannot be implemented without agreement from employees in advance.

TSMC spokesman reported that the company will give all employees pays above the basic-pay level, despite the implementation of unpaid leave. Starting from this month, all workers at the company's production lines have taken four days of unpaid leave a month and the practice will be extended to all other staffers from January 1, next year.