Industrial Relations of Taiwan - Research Paper Example

Industrial Relations – The case of Taiwan Discussion/analysis of impact on IR policy The expansion of globalization worldwide has led to the change of traditional industrial relations; under the influence of globalization, employment rates in industrialized countries may be increased but the quality of employment relations has been adversely affected; Taiwan is an indicative example of the above phenomenon. Liu and Chen-Min (2006) note that the benefits of globalization for employment can be indirect; by supporting the development of national economy – through the increase of foreign direct investment worldwide – globalization can lead to the increase of job availability and support the further growth of employment – mostly in the long term. Regarding specifically Taiwan, it has been proved that the ‘real export growth rate and the stock market development’ (Liu and Chen-Min 2006, 667) have benefited the country’s economy – a fact that also benefited the employment in all the country’s industries. The effects of globalization on the Taiwan’s industrial relations can be identified by referring to the current Labor Law – both for natives and foreigners – that regulates employment relations across the country. The reference to the human rights framework in Taiwan would be also valuable – in order to understand the potential interaction between globalization and the industrial relations of the particular country. In accordance with a human rights report published by the US Department of State in 2010 human rights in Taiwan are generally protected but there are problems including the ‘corruption by officials, violence and discrimination against women, trafficking in persons, and abuses of foreign workers’ (US Department of State, March 2010) that have not been adequately addressed. Employment in Taiwan is controlled through three major legislative texts: ‘the Labor Union Act, the Collective Agreement Act , and the Settlement of Labor Disputes Act’ (Council of Labor Affairs Executive Yuan Taiwan, 2010); through these laws, all issues related to employment in Taiwan’s various industries are addressed – at least this is the target set by the Taiwanese government. The effectiveness of these laws need to be tested – using appropriate literature – aiming to show the influence of globalization in employment relations across the country. One of the key elements of globalization is the limitation of obstacles in the development of business activities worldwide; this means that the entrance of foreign capital in a particular market is welcomed – this trend is indicated in the laws regulating the relevant process. In Taiwan the requirements for the entrance of foreign entrepreneurs in the country’s market are strict; in fact, business visitors in the country are only allowed to participate in meetings/ seminars and make calls for sales in local businesses (Fragomen, 2010); on the other hand, in a report published by the Institute of Occupational Health and Safety (2006) it is noted that the effects of globalization on Taiwan’s industrial relations have become clearer after 2002 – when the country entered the WTO; the above fact gave ‘rise to deficiencies in high-level professionals and blue-collar workforces’ (IOSH, 2006); the effects of globalization on the industrial relations in Taiwan had specific forms: a) new, flexible modes of employment were introduced – in order to face the global competition; these modes of employment have been unfair for employees leading to the decrease of their remuneration and the increase of their working hours, b) schemes, like early retirement, have been added to the existing legislative texts that regulate employment in Taiwan, c) the needs in high – skilled workers has been increased – the current number of 10000 foreign workers (IOSH, 2006) working across firms in Taiwan should be further increased in order to meet the local market’s needs, d) the need for increasing the number of women participating in the workforce has also appeared. It is made clear that industrial relations in Taiwan have been affected by globalization; however, the specific relationship can have many different aspects – not always positive – as indicating through the findings of the research presented below. 2. Use of case studies and examples to support arguments The relationship between globalization and employment has been explored in practice using different criteria; globalization has been found to have both direct and indirect effects on industrial relations in markets worldwide. Gourevitch, Bohn and McKendrick (2000) tried to identify the role of globalization in the development of performance of US firms; through their research it was proved that globalization has helped US firms ‘preserve employment in the United States (and possibly expand it), and increase employment worldwide, most notably in Southeast Asia’ (Gourevitch, Bohn and McKendrick 2000, 301). It is made clear that through globalization employment rates in the particular region – Southeast Asia – have been increased; Taiwan is also benefited in regard to the employment potentials of its citizens. Through another point of view, Walker (1999) notes that the actual benefits of globalization on employment are limited taking into consideration the fact that through globalization ‘cheap-labor platforms in the newly industrializing countries’ (Walker 1999, 263) are established. Referring especially to the effects of globalization on Taiwan’s industrial relations Wang (2009) states that ‘since 1980, wage inequality, unemployment, and the white-collar–blue-collar worker employment ratio’ (Wang 2009, 120) have shown a radical increase; Wang (2009) have focused on the industrial relations of Taiwan from 1980 up today aiming to highlight the effects of globalization on the country’s economy and employment. Through the study of Wang (2009) it is proved that despite its potential benefits – referring especially to the increase of job availability – globalization can lead to the worsening of existing industrial relations by lowering the levels of wages and the quality of conditions in the workplace. Similar assumptions have been developed by Lee and Hsin (2004, 362) who refer to the efforts of the Taiwanese government to control the increase of unemployment across the country; the above researchers note that the employment training plans introduced by the country’s government in order to increase the employment rate have not been proved to lead to the expected benefits – for this reason it is strongly doubted that these plans can actually support the increase of employment in Taiwan. The empirical research developed in the specific field has also led to the assumption that the effects of globalization on Taiwan’s employment status are not positive; a survey has been conducted by Yeh, Yawen and Chiou-Jung (2009) aiming to identify the benefits of performance – based pay systems in Taiwan; the above survey is based on data from ‘a nationally representative sample of paid employees in Taiwan -about 8906 men and 6382 women’ (Yeh, Yawen and Chiou-Jung 2009, 1407); it has been proved that the specific payment system has resulted to long working hours and increased job control – compared to the time-based pay system. The performance-based pay system is a pay system promoted in the context of globalization aiming to lead to the increase of performance of employees in industries worldwide; however, in Taiwan its use has led to the opposite results – as the research developed by Yeh, Yawen and Chiou-Jung (2009) has proved. Moreover, in the research developed by Zheng and Mei-Chih (2008) it has been proved that the plans introduced by the Taiwanese government in regard to the development of employment across the country are not appropriately designed – using ‘data from 211 multinational companies (MNCs) operating in Singapore and Taiwan’ (Zheng and Mei-Chih 2008, 834) noted that the level of skills of employees working in those countries’ information, communication and technology industry is quite low – a fact that indicates the inability of these countries’ government to develop effective schemes for the support of employment in all their industries. Globalization may have led to the increase of job positions but countries in the Southeast Asia - including Taiwan – have not been appropriately prepared in order to control the effects of globalization on the employment sector – low quality jobs and lack of skills required are the key indicators of this failure. 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Technological Forecasting and Social Change. 75(6): 834-853 Online Sources Council of Labor Affairs Executive Yuan Taiwan, 2010, available at http://twlabor.tier.org.tw/LEEng/DefaultE.aspx Fragomen, 2010, Country summary: Taiwan, available at http://www.fragomen.com/newsresources/xprNewsDetailFrag.aspx?xpST=CountrySummaries&news=50 Institute of Occupational Safety and Health (IOSH), 2006, "Taiwan Economic Growth Convention" Labor Market and Human Resource Planning, available at http://www.iosh.gov.tw/English/Publish.aspx?cnid=379&p=1430 US Department of State (2010) Human Rights Country Reports: Taiwan, available at http://www.state.gov/g/drl/rls/hrrpt/2009/eap/135990.htm Read More