Mon, May 25, 2009 page12

• ANALYSIS: TSMC learns labor habits the hard way

  INSENSITIVE: The practice of firing employees after a review and refusing to give them proof of involuntary leave means laid-off workers have no way to get government aid

  • By Hong Yo-fang / STAFF REPORTER
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  Amid the downturn in the semiconductor industry, many high-tech firms at Hsinchu Science Park (新竹科學園區) have cut jobs to weather the crisis.

  The country’s top two chipmakers, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), are no exception.

  But many wonder why the only layoffs to arouse controversy in the past few months were those made by TSMC, which announced last week its readiness to rehire hundreds of laid-off workers.

  On Wednesday, TSMC chairman Morris Chang (張忠謀) told employees via a televised speech that the world’s largest contract chipmaker was inviting all of its laid-off workers back to work on June 1.

  Chang also apologized for the company’s mishandling of its annual Performance Management and Development (PMD) employee appraisal, saying TSMC would compensate the laid-off workers for the harm resulting from the evaluations.

  But the main cause of controversy was TSMC’s refusal to provide its laid-off workers with documentation confirming their involuntary unemployment. Some laid-off employees said the company had threatened to label them as “unfit for the job” if they asked for proof of involuntary leave, which would make it hard for them find new jobs.

  By law, when a worker is laid off, he or she can apply for up to six months of government unemployment benefits after obtaining proof of involuntary unemployment from their former employer.

  TSMC’s refusal to provide such documentation forced its laid-off workers to protest for the first time in the company’s 22-year history, which severely damaged its image.

  Chang admitted that the company failed to respect the dignity of its workers and did not take into account the difficulty of finding employment amid the economic downturn.

  The global financial crisis that intensified late last year has had a strong negative impact on the operations of many high-tech firms at Hsinchu Science Park, forcing many to ask their staff to take unpaid days off and reduce their headcount.

  Almost all the companies, including UMC, issued proof of involuntary unemployment to workers who were laid off. TSMC, however, did not consider its employees as laid-off and therefore refused to issue such proof, causing the issue to snowball into a major controversy.

  Under the company’s PMD system, the 5 percent of its workers with the lowest performance evaluation scores are to be fired, with no proof of involuntary unemployment.

  TSMC workers have long criticized the PMD system as unfair and biased. But most of the workers laid off in the past did not protest because it wasn’t as difficult for them to find new jobs.

  But this year is different. Most of TSMC’s laid-off workers found it impossible to find jobs, and they had no proof of involuntary unemployment to apply for government unemployment benefits.

  Against this backdrop, some laid-off workers formed a group in the middle of February to represent them. With the help of the Labor Party, since March the group has staged protests at the Hsinchu Science Park Administration, the Council of Labor Affairs and the Presidential Office.

  The group twice protested in front of Chang’s house in Dazhi, Taipei, which caught media attention and prompted TSMC to give in to workers’ demands.

  On May 1, Chang’s wife, Sophie Chang (張淑芬), greeted the laid-off workers. On May 13, Morris Chang also appointed TSMC vice president Chin Yung-pei (秦永沛) as head of a five-member group to listen to the workers’ complaints and improve the PMD system.

  Last week, TSMC announced it would rehire its laid-off workers, with employee seniority and stock bonuses remaining unchanged. Those workers who do not wish to return to the company will receive severance pay and an extra bonus, with the company saying it wishes to help them through difficult times.

  Chang said in a speech that the company would not use the PMD system as a mean to fire employees, but his announcement that the former employees would be rehired at the beginning of next month is certain to have repercussions among other local electronics companies who cut payrolls earlier this year.
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