Taiwan has more than 3,800 labor unions that
serve over 2.8 million members. The sheer quantity
is impressive, but a closer look reveals that the
quality of these organizations is not what it could
be. What is being done to improve the situation?
Statistics can offer a quick and clear perspective on a subject--a country's economic progress, for example, or the size and productivity of its workforce. But numbers can also be misleading. Take for instance figures from the Council of Labor Affairs (CLA): in June 2001, Taiwan had a total of 3,874 labor unions with over 2.8 million members. In other words, 39 percent of the island's union-qualified workers have been organized to "protect the rights and interests of workers, to advance the knowledge and skills of workers, to develop productive enterprises, and to ameliorate the livelihood of workers," in the words of the Labor Union Law. This is a very high rate compared with other industrially developed countries. For example, the organization rate in Japan is 22 percent and in the United States it is 13.5 percent. But does a higher organization rate necessarily represent higher labor awareness and sounder union structures?
To get the real picture, it is necessary first to know how labor unions are formed in Taiwan. According to the Labor Union Law, public servants, teachers, and employees of munitions industries are prohibited from unionizing. Otherwise, a company or factory with more than thirty workers must organize an industrial union, and a trade union must be organized in any administrative area (such as a city or county) that has more than thirty workers with a specialized skill. Only one union can be organized in one area or industry, while unions in a larger area (such as a province or provincial-level city) can form federations, and federations can form nationwide general federations.
The complication is the existence of these two types of unions: trade unions and industrial unions. Currently, there are more than 2,600 trade unions with nearly 2.3 million members, and some 1,100 industrial unions representing about 580,000 members in various industrial sectors (see graphics on Page 29). Wu Shoei-long, chief of the union affairs section at the CLA's Labor-management Relations Department, explains that under the Labor Insurance Act, workers who lack a specific employer or are self-employed need to join an occupational union to get coverage for labor insurance. "The only purpose for joining a trade union is to qualify for labor insurance, and the only service you get is labor insurance," Wu says. "Taiwan's trade unions don't deal with management-labor issues or anything else. They call themselves labor-insurance unions."
If these labor-insurance unions are removed from the figures, the ratio of companies that should be organized but are not would be 96 percent. "The law says these workers should organize and have an obligation to join unions, but it doesn't stipulate what the penalties are for not doing so," Wu says. "What the government can do and has been doing is to encourage and assist workers to organize unions. If they refuse, we have no recourse."
Looking for the truth behind the numbers, the question arises: what do Taiwan's "real" unions do? One way of evaluating what they are accomplishing is to examine the number of collective bargaining agreements--the written contracts between employers and unions--that have been concluded. According to the CLA, 289 such collective agreements had been reached by the end of 1990, and the number increased to 301 in 2000. Without looking at the contents of these collective agreements, these low figures suggest that not much has been done. Another indication of union activity is the number of strikes held. Between 1987 and June 2001 only eleven legal and twenty-five illegal strikes have occurred. And this time the statistics may not be misleading. "Most of the industrial unions are called 'vase unions,'" says Jack Lee, professor of public administration at the National Open University and National Dong Hwa University. "They serve no function except to be ornamental."
The formation of these "vases" has cultural and historical roots. Culturally, Taiwan still bears the influence of an agricultural society in which there was little awareness of labor rights. Historically, the island's unions were politically based. "In an industrially developed country, organizing a union is initiated by workers who feel it's necessary to create a collective power base to bargain with employers," Lee says. "But when unions were first organized in mainland China, they started with help from political parties and served political purposes." During the civil war, both the Chinese Communists and the Kuomintang (KMT) were active in organizing unions, viewing them as tools to help strengthen their support. The number of unions increased from fewer than 1,200 in 1940 to 11,000 in 1948, and their membership increased from 417,000 to nearly 5.5 million over the same period.
When the KMT moved to Taiwan in 1949, it continued to help the working class organize unions, and managed to establish a union system extending from the central to local levels. "To the KMT government, the working class was important to both political stability and economic development," Lee says. "State-sponsored unions were not only a source of votes but also administrative arms for executing government policies." In fact, in the days when Taiwan was still trying to recover from World War II and the KMT from its setback on the mainland, these unions contributed greatly to the construction of the island's infrastructure, economic development, and political and social stability.
Although these administrative units did little to protect labor rights or lobby for workers' interests, it is not fair to place all the blame on unions. "A government has two options for its worker-management policy: it can regulate work conditions for employers and labor to follow, or it can establish clear rules of the game to allow employers and workers to negotiate the details themselves," Wu Shoei-long says. "Considering Taiwan's economic and political environment, it was necessary for the government to step in." One side effect is that when the government becomes the effective solution in every dispute, the unions are left with nothing to bargain with and they consequently have little room to develop.
This policy lasted for more than three decades until the mid-1980s, when it was criticized by scholars and a generation of better educated workers who have a higher level of awareness of labor rights. Jack Lee believes the Labor Standards Law, passed in 1984, was a turning point in Taiwan's union history. "The law not only protects the rights of the working class but also tells them that they are entitled to certain rights," he says. "More and more workers have begun to realize that they can pursue reasonable interests if they bargain with employers, and that their unions can serve as a platform for such bargaining."
In the late 1980s, the lifting of martial law not only removed constraints on setting up political parties, but also helped spread labor awareness. "A ruling party, in order to maintain a stable economic order, usually has a conservative attitude toward the development of unions," Lee says. "The opposition parties, looking for working-class votes, often take the side of labor groups and try to win them as many benefits as possible." Numerous labor and labor-rights organizations at the time were sponsored, supported, or led by opposition parties.
Pressure from abroad was also felt during this period. The American Federation of Labor complained to the US government that Taiwan's unhealthy union system allowed its industries to lower production costs by exploiting labor, thus leading to unfair trade between the two countries as well as contributing to the increased unemployment rate and trade deficit in the United States. In addressing the issue, the US government recommended that Taiwan promote labor rights and improve its union structure. The suggestion, coming from the island's number one trading partner, was taken seriously.
While the government and the working class both felt compelled to further develop labor unions, company owners had a different opinion. From their viewpoint, unions only cause trouble, and increasing labor awareness only contributes to higher production costs. "Employers benefited from 'vase unions' for decades, and they wanted to keep it that way," Lee says. "Such resistance put the government in an awkward position. An open and sound union system would promote labor rights, but it would also increase production costs and make investors reconsider their options about operating in Taiwan."
Despite the resistance of management, workers increasingly began to organize labor activity throughout the 1990s. One result of these efforts was the establishment of the Taiwan Confederation of Trade Unions, formed by state-run enterprise unions and eight city or county federations of industrial unions. The organization, representing the interests of some 250,000 members, is urging the government to revise the Labor Union Law to grant unions more power in their negotiations with employers.
In fact, the CLA has been revising the law for years, and has held many seminars and public hearings to share its opinions with employees as well as employers. In the discussions, a major disagreement between the council and labor groups has been that the government believes the law should be revised to allow workers the freedom to choose whether they want to join a union or not. "Article 14 of the ROC Constitution guarantees people the freedom of assembly and of association, which means having the right to choose one way or another," Wu says. "Making it an obligation to join a union takes away the freedom of choice, and that's unconstitutional."
On the other side of the debate, the labor activists hope to keep union membership an obligation. "The purpose of organizing a union is to give workers collective bargaining power. So the more members a union has, the more bargaining power it has," Jack Lee says. "Allowing workers to choose not only risks weakening the union's power but also allows the possibility for free riders to enjoy the results of unions' bargaining efforts without ever joining one."
Another argument regards whether an administrative area can have more than one union. "Which one are you going to join if this one only provides labor insurance service but that one has additional training programs?" Lee asks. "Allowing more than one union encourages competition, and unions would have to improve to survive." But as expected, there is resistance from existing unions that have enjoyed the benefits of being a monopoly in their areas.
Amendments to the labor union law are awaiting approval from the legislature. They have not been given a high priority--or any priority--given the backlog of legislation to be reviewed. In the meantime, few discussions have occurred on whether Taiwan has the proper environment for the rapid development of "real" unions. Jack Lee believes such development is a global trend and the correct direction to follow. But he also acknowledges that given the unhealthy status of Taiwan's unions, the government cannot suddenly release the reins and leave unions and employers strictly on their own to engage in bargaining. The shift should be gradual so that both parties have time to learn and mature.
Wu Shoei-long believes a "co-determination" system in which labor participates in the corporate decision-making process would work much better for Taiwan than a strong union system. He explains that the function of a union is to bargain with the employers. It is fine if they reach agreement, but if not, the union could call a strike or the employer could close the factory. "Are Taiwan's unions and employers mature enough to handle the bargaining? If not, is Taiwan prepared to tolerate the impact under the current economic environment?" Wu asks. "I don't think the answer is 'yes' to either question."
Yet despite the different viewpoints about the future, one thing can be concluded without any disagreement: when it comes to Taiwan's labor unions, one must be aware of the distance between statistics and reality.