The Labor Market Structure Improvement Committee under the Economic and Social Development Commission (ESDC) reached a framework agreement on the principles & direction of labor market reform after long discussions to the end of December last year.
The draft agreement involved a group of experts from labor, management, and government, with business and labor agreeing that the dual structure of the labor market (the gap between large enterprises and SMEs, the gaps between regular and non-regular workers) needs to be resolved, but differed greatly in their approaches to the situation. Of particular note, agreement on specific issues could not be reached due to FKTU opposition.
Since the Tripartite Commission has failed to reach a substantive agreement, specific policies in relation to labor market structure improvement were excluded from the government’s ‘2015 Economic Policy Direction’ on 22 December. The government is working to see a tripartite agreement as soon as possible.
The Tripartite Commission launched the Labor Market Structure Improvement Committee in September 2014, towards resolution of the pending issues of the scope of ordinary wage, reduction of working hours, and mandatory extension of retirement age through tripartite dialogue.
Principle and Direction of Labor Market Reform
Amidst a business environment changing rapidly from globalization, aging populations, information-driven societies, a developing service industry, a low-growth economy, and the increasing uncertainties and instabilities in the world economy, the nation’s economic and labor structure formed during the high-growth period of industrialization has failed to actively respond.
With economic vitality and quality jobs on the decrease, the labor market is further polarizing and concerns are rising that the current system is unsustainable.
A “Special Committee for Labor Market Structure Improvement” was formed under the Economic Social Development Commission (ESDC) with the aim of maintaining and further developing 30 years of social dialogue and agreement and preparing for the next 30 years. Through intensive discussions, the Committee understands the need for a paradigm shift and improvement of labor market structure in the interest of overcoming the present and future crisis, and agreed on 5 agenda items and 14 specific topics to make such improvement.
Labor, management and government will follow the principles and direction below as they seek to improve the labor market structure with the goals of ‘job creation, employment stability and social cohesion’ as special priority.
Principles
1. Share the pain which may arise in the process of improving labor market structure based on accountability to labor market realities.
2. Proactively improve labor market structure with a long-term view of preparing for both existing and future risk.
3. Improve labor market structure from the perspective of joint responsibility encompassing the current and future generations as well as the mutual interests of labor and management.
4. Actively work together in partnership towards improvement of labor market structure.
Direction
1. Share the need to stimulate the labor market through shared growth and cooperation between primary contractors and subcontractors and between large companies and SMEs, improvement of regulations surrounding non-regular employment and the system of remedy for discrimination, labor mobility and employment, wages, and working methods, and develop comprehensive measures by March 2015, towards improving the dual structure of the labor market.
2. Set the highest priority on solving the pending labor issues of wage, working hours and retirement age, with a view of eliminating uncertainty at industrial sites and benefiting both labor and management and minimizing conflict between them, and make mutual effort to reduce consumptive disputes at industrial sites.
3. Reinvigorate social dialogue and cooperation, and strengthen the partnership between labor, management, and government to reduce blind spots in basic labor rights, strengthen representation of unorganized areas, stimulate social dialogue at the central, regional, and industry levels, develop reasonable labor-management relations and strengthen the social responsibility of labor and management.
4. Strengthen the social safety net by reducing blind spots and increasing effectiveness; raise vulnerable worker income and enhance development of vocational skills, the employment service and other aspects of a proactive protection system; develop comprehensive measures for improvement of the unemployment benefit system by May 2015.
5. In order to support labor market structure improvements, modernize related laws and systems and strengthen the link to policies, as well as work to increase productivity and innovate the workplace through partnership between labor and management.
Labor, management and the government plan to make public the specific details and additional discussion, under the above-mentioned principles and direction, finalizing the 1st step by March 2015 and the 2nd step by May 2015.
19 December 2014
Special Committee on Labor Market Structure Improvement
Economic Social Development Commission (ESDC)