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In the News: Mandatory Worker Representation in Boardrooms; Shanghai Biomedical Reform; and Temu Merchant Disputes
August 08, 2024 | BY
Clarence LeeRevised Chinese Company Law requires mandatory worker representation in boardrooms; Shanghai's biomedical measures catch the most attention; and Merchants of Pinduoduo's international arm, Temu, struggle to sue the company due to its complex structure.
Credit: AnnaStills/Adobe Stock
China Boosts Employee Protections in Company Law Overhaul
The Chinese government's company law overhaul, which mandates worker representation in company boardrooms, among other changes, took effect on July 1, Nikkei Asia reports.
Among the significant changes to the PRC Company Law (中华人民共和国公司法) are those relating to employee rights. The new law requires that "limited liability companies that employ 300 or more people must have an employee representative" (elected by the employees) on the board, "unless they have a separate supervisory board with employee representation." Previously, companies only needed to "seek feedback from labor unions and employees on key management and rulemaking decisions."
Other measures to empower employees include requiring companies to fully consider employees' interests when conducting business operations (Article 20) and the introduction of employee representative congresses (ERC) for the purposes of "democratic management" (i.e., "employees' participation in the decision-making process"), according to DLA Piper.
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