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Employers, prepare for tribunal trouble

Employers in China are facing more labour arbitrations as employees take advantage of free tribunals and increased rights. Foreign companies are at most risk. They must keep good documentation and pay close attention to balancing internal rules and local law.

Issue: February 2009

Keywords (click to search): [employment] [labour] [arbitration] [disputes] [employee rights] [Employment Contract Law] [tribunal]

By Joanna Law.

This year marks mainland China’s 31st year of reform, but Guangdong province is showing few signs of celebration. Tales of mass lay-offs, factory shut-downs and labour disputes have become some of the most widely-featured stories in the local news media.

Known as China’s manufacturing hub, Guangdong has been particularly badly hit. Shenzhen’s gross domestic product growth slid from 14.6% to 12.1% in 2008, and is expected to drop to 10% this year.

Conflicts between employers and employees are especially serious. Ever since the new Employment Contract Law took effect in 2007, and its Implementing Regulations came into force in 2008, labour arbitration cases in the Pearl Delta have increased significantly: more than 60,000 applications had been made for arbitration by the end of 2008, according to the arbitration office of the Guangzhou Labour and Social Security Bureau. This figure is about the...

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