The Labor Law and the Need for Public Comment

After much controversy, a revised Labor Standards Law has now been enacted in Taiwan.

The Executive Yuan has made known its intention to re-revise the Labor Standards Law after amendments passed last year left both employers and employees dissatisfied with the rigidities it imposed on working hours, overtime pay, and other working conditions. A new draft is expected to be submitted to the Legislative Yuan in November.

AmCham Taipei hopes that the lawmakers will speedily enact the new version in order to introduce greater flexibility into the system as befits the innovation-driven, knowledge-based economy Taiwan aspires to become. Professional, technical, and managerial personnel cannot be governed by the same rules as are suitable for workers on a factory production line.

The Labor Law example, in which the deficiencies became fully evident only after the amendments were passed and began to be implemented, underscores the value of the 60-day notice and comment period that the Taiwan government put into effect from October 1 last year. Previously stakeholders and other members of the public had a mere seven or 14 days to express an opinion on a proposed new law or regulation, hardly sufficient time to provide thoughtful and constructive input.

The new system, which AmCham Taipei had been advocating for several years, is designed to ensure greater transparency and public participation. It provides enough time to detect and reconsider potential flaws in the draft regulation before it goes into effect, reducing the likelihood of future disputes between regulators and the regulated. The result should be better, more effective regulations, with happier stakeholders and less harried civil servants.

This month, following the one-year anniversary of adoption of the 60-day policy, presents an opportune time to examine how well the program has been working. The government’s National Development Council (NDC) has been tracking the degree of compliance, and has found steady improvement. Of the 70 proposed new regulations announced in January this year, for example, only 39 (55.7%) were given a notice and comment period of at least 60 days. In September, in contrast, there were 94 new regulatory drafts, of which 74 enjoyed the full 60-day notification for a compliance rate of 78.3%.

Government agencies are allowed to deviate from the 60-day rule in case of emergencies. NDC monitoring is helping to ensure that divergences are due to genuine urgency and not simply bureaucratic convenience. The Council is also reminding ministries with the lowest compliance rates that their performance is being watched.

Data is still being compiled on how many stakeholders are submitting comments and on the quantity and quality of the responses that government agencies are providing to those comments. Some AmCham Taipei member companies may be constrained from making public suggestions as a matter of corporate policy, but we urge others to take full advantage of the opportunity to make their ideas known when new regulations are under consideration. In any case, AmCham Taipei can make a collective filing on behalf of its industry committees.

As long as stakeholders convey their views based on their practical experience and government agencies take those comments seriously and provide clear explanations as to why suggestions can be accepted or not, the outcome will be a vastly improved business climate marked by constructive communication between government and industry.

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