Innolux ‘Encourages’ Employees to Take ‘Vacations’
Innolux (3481.TT) is one of almost all large panel LCD producers that have lowered utilization rates as the display industry finds itself with high inventory levels and decreasing demand. Given that panel producers do not want to fire workers that have been trained only to hire and train new workers when utilization rates move up, the company has announced a new ‘Unified Vacation Plan’ for employees that designates September 12th and 13th as ‘vacation days’, along with October 5th, 6th, and 7th, with the payroll system deducting said ‘vacation days’ from worker’s pay, which has caused workers to complain to the media and the Taiwan Ministry of Labor.
The Ministry of Labor seems to believe that the Innolux leave announcements ‘clearly violate Labor Standards Law’ and put the company in position to receive a maximum fine of NT$1,000,000, which is the equivalent of ~$33,000 US$. The average engineer in Taiwan earns $85,300/year, which comes to $234/day and assuming all 52,600 Innolux employees are forced to take the 5 additional unpaid vacation days, the savings to the company would be ~$62.5m, which makes a $33k fine seem a bit insignificant. Of course it does little for company/employee relations but with the outlook cloudy for the next few months we expect management would not be distressed if a few employees left for greener pastures.
The Ministry of Labor seems to believe that the Innolux leave announcements ‘clearly violate Labor Standards Law’ and put the company in position to receive a maximum fine of NT$1,000,000, which is the equivalent of ~$33,000 US$. The average engineer in Taiwan earns $85,300/year, which comes to $234/day and assuming all 52,600 Innolux employees are forced to take the 5 additional unpaid vacation days, the savings to the company would be ~$62.5m, which makes a $33k fine seem a bit insignificant. Of course it does little for company/employee relations but with the outlook cloudy for the next few months we expect management would not be distressed if a few employees left for greener pastures.
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