As the New Year draws near, certain enterprises in Guangzhou are
masterminding plans to terminate labor contracts with their
employees, in an apparent move to dodge the new labor contract law
that goes into effect on January 1, 2008.
However, a notice that was issued by the local government over
the weekend is blocking their crafty calculations. It requires them
to renew labor contracts with their employees by December 31, and
includes all businesses except those on the verge of bankruptcy or
trapped in an operational crisis.
According to the new labor contract law, any employee who has
worked for a company for more than 10 years is entitled to sign an
open-ended labor contract. The same applies to anyone who renews
his labor contract after working for two fixed terms
consecutively.
In addition the new law guarantees economic compensation in some
cases of contract termination; it also has clauses regarding social
insurance for employees.
Worrying that labor costs would rise from the labor law and that
it would become difficult to sack employees holding open-ended
contracts, enterprises began to force their employees who have
completed a decade-long services to resign now in order to sidestep
the new law.
In some other cases, enterprises have forced their employees to
enter into employment contracts with a staffing firm and then
accepted them as workers under the staffing firms' placement
arrangements.
The local government aims to put snuff out such illegal layoffs
exercised by a small number of enterprises, said Chen Jianlong,
vice director of Guangzhou municipal labor and social security
bureau.
A large number of labor contracts will expire at the end of the
year. The local government's notice comes at a timely fashion in
order to protect employees who are approximately 40 years of age
and have worked for about ten years from being dismissed. This
governmental protection would also avoid potential complaints and
labor disputes that could create dangerous situations harming
social stability.
However, the notice does not target normal layoffs. Enterprises
are allowed to discharge their employees in large numbers in case
of pre-bankruptcy restructuring and consolidation or if the
municipal government classifies them as having serious operational
problems.
Employers have to submit written reports to the labor and social
security department if the number of laid-off employees exceeds 20
or accounts for over 10 percent of the total staff number from
December 14 to 31.The labor department will give a reply within 15
days, according to Chen.
Agencies that manage social insurance are also told not to stop
insurance payments upon demand by employers. "As long as social
insurance is not suspended, labor relations will exist," said
Chen.
Trade unions are also given the right to point out illegal
practices by enterprises. They may ask them to rectify the
problems. They are also supposed to offer support and aid to
employees in arbitration and litigation.
(China.org.cn by Yuan Fang December 18, 2007)
