Putting China’s Labour Contract Law into Practice
With reports emerging of mass layoffs preceding its implementation, and factory closures or relocations to cheaper jurisdictions afterwards, the newly-effective Labour Contract Law has drawn much criticism. Large employers complain that it adds unreasonable costs, while employees are disappointed that the Law does not offer as many benefits for them as compared to the original draft. But is the Law as it stands a workable compromise, and can it be enforced in its current form prior to the release of implementing regulations?
Date:
March 2008
Keywords (click to search): [Labour] [arbitration] [employers] [employees] [human resources] [HR] [contract] [salary] [unionization]
Now that China’s Labour Contract Law has come into effect, the main question seems to be whether or not it can be successfully implemented. Of course, the answer to this question lies in how one defines successful implementation by the standards of China’s methods of enforcement. Preventative actions against errant employers are obviously not feasible given the size of the country, yet the Law does provide a framework with somewhat more predictable and uniform results for conflicts between employers and employees. For example, when disputes arise, local labour arbitration tribunals are going to be more likely to interpret vague terms – such as whether a forced resignation will restart the counting of years of service - in favour of the employee. Additional changes, such as greater termination payments and mandatory fixed-term contracts, have brought about concerns from large employers that the increased costs associated with the new Law could drive...
To continue reading this article, you must be a subscriber.
The rest of this article is available to subscribers only. Subscribe now to continue reading this article and to have full access to all other articles and full-text translations.