[ ASrIA Publications ]

The Asian Workplace

By Donna Situ
August 2001

At the start of 2001, as much as one-third of the world's workforce of three billion people are unemployed or underemployed. Among them, 20 million more workers are unemployed now than before the onset of the 1997 Asian financial crisis. At the same time, many Asian economies have weathered the financial troubles in the region with resilience and have emerged with marked signs of recovery. Coupled with the rise of the knowledge economy, companies throughout the world vie for global talent, and Asia again becomes an attractive marketplace for human capital.

The financial crisis has spurred companies to consider greater transparency, competitiveness, and liberalization. It has forced enterprises to restructure and revise business strategies. One area of change is the perceived role of the workforce in the success of a company. Although manufacturing continues to be an area where Asia is very strong, companies are moving away from a business philosophy of simple cost-reduction to one based on adding true value to clients/customers. Both Asian and international employers are more committed now than ever before to investing long-term in their workforce. Many believe that competitiveness and success ride on a human resource strategy that equips people with skills and knowledge, allowing employees a range of options and the opportunity to be accountable to new ventures and ideas.

The gradual dismantling of trade barriers and the expansion of the market economy have created numerous new jobs for people everywhere. Yet globalization has also brought about a host of issues for developed and developing countries: a gap between market and society, greater income disparity between the rich and the poor, widening polarity between urban and rural, and an increasing divide between those with and those without intellectual capital.

Governments in all major Asian economies now face the dilemma of maintaining a balance between the desire to attract potential employers with appealing investment opportunities and the need to contain the negative effects of globalization and industrialization on local workers’ basic living and working conditions. The impact of the financial crisis has also intensified tension between unions and employers. As a result, regulations governing labor relations, workplace standards, working hours, wages, termination, and numerous other terms pertaining to employment practices are constantly reevaluated and revised.

The following table provides a list of some basic mandatory requirements for employers in a number of Asian countries.

Mandatory/Statutory Employment Terms and Conditions

TERMS AUSTRALIA CHINA HONG KONG INDIA JAPAN KOREA SINGAPORE TAIWAN THAILAND Minimum Wage Set by agreement Set by region None Set by state/sector Set by region W 421,490 per month None NT$15,840 per month Set by region Medical (Insurance) 6% of pay to SS (Insurance) 4.75% of pay to ESI 4.25% of pay to HIP 3-8% of pay to SS Part of CPF contributions 2.55% of pay to NHI (Insurance) Retirement/Pension 8-9% of pay to Super 5-20% of pay to SS 5% of pay to MPF 11 % of pay to EPF 8.675% of pay to EPI 4.5% of pay to NPP 3.5-16% of pay to CPF Minimum 2% (DB) On hold by government Working Hours 35-38 hours per week 40 hours per week None 48 hours per week 40 hours per week 40 hours per week 44 hours per week 44 hours per week 48 hours per week Overtime 50-100% premium 50-200% premium None 100-150% premium 25-50% premium 50% premium 50-200% premium 33-100% premium 50-200% premium Sick/Short- term Disability 5 – 8 days to 2 year Set by contract Day 5 – 6 months Day 3 onwards Day 4 – 18 months None First 14-60 days paid Day 1 – 1 year First 30 days paid Holidays 9 (set by region) 10 12 Set by state 14 18 11 12 11 to 13 Vacation 4 weeks Flexible regulation 7 – 14 days 12 days 10 – 20 days 10 – 20 days 7 – 14 days 7 – 30 days 6 days Maternity 52 weeks (parental) Set by province 10 weeks 12 weeks 14 weeks 12 months (unpaid) 8 weeks 56 days 90 days Disability Super coverage (Insurance for TPD) (Insurance) (Insurance) (Insurance) (Insurance for TPD) (Insurance) (State benefits) (Insurance) Workers’ Comp Industry insurance 0.2-2.4% pay to SS Compulsory insurance Industry insurance 0.6-13.4% pay to SS 0.2-21% of pay to SS Compulsory insurance Payment of premium 0.2-2.0% of pay to SS Termination Notice 1 – 4 weeks notice/pay Set by contract 7 days’ notice/pay 1-3 months’ notice 30 days’ notice/pay 30 days’ notice 1 – 4 weeks’ notice/pay 10 – 30 days’ notice At/before next payment Others Leave loading % to unem- employed 13 months’ pay Bonus & allowances 16 – 18 months’ pay 16 – 18 months’ pay 13 months’ pay 13 – 14 months’ pay About 4.5% of pay to SS

Note: 1) SS = Social security; 2) DB = Defined benefit plan; 3) TPD = Total & Permanent Disability; 3) This table summarizes only the most basic minimum requirements; common market practice of providing company-sponsored benefit plans, which are not required by law, are indicated as (Insurance).