|Labor law 'will not hurt investment environment'
[ 2007-07-03 13:57 ]
approved Labor Contract Law will not undermine the investment environment
although it will better protect workers' interests and rights, China's top trade
union body said yesterday.
Liu Jichen, director of the law department at
the All-China Federation of Trade Unions, denied that the law - which
goes into force from January 1 next
year - is biased towards employees.
"It not only protects workers'
interests and rights, but also equally protects employers'," he told a press
The law, passed on Friday by the Standing Committee of the
National People's Congress, the top legislature, had raised concerns that
stricter contract requirements could raise business costs and give companies
less flexibility to hire and fire employees.
Liu, however, said that the
law takes into account employers' interests.
For example, he said,
employers can sign non-competition contracts with workers, with a
non-competition period of not more than two years to encourage innovation and
ensure fair competition.
So an employer can rest assured that an
employee does not walk out at the end of the contract period and join a direct
It also softens the terms under which employers can cut
staff - if an enterprise switches to other production, adopts a major
technological innovation or changes its mode of business.
that the law will help create a harmonious labor relationship.
protection is a worldwide trend," he said. "With working conditions improved and
rights protected, employees will feel more secure, which leads to a higher
Liu pointed out most labor disputes result from violations of
Because of the huge supply of labor force, workers are
in a disadvantaged position, he said.
Liu said the federation has
succeeded in keeping most of the items on protecting workers' rights and
interests in the law.
For example, the law makes mandatory the use of
written contracts and strongly discourages fixed- or short-term contracts.
It also stipulates severance be paid if a fixed-term contract expires
but is not renewed without an appropriate reason.
The law requires all
employers to submit proposed workplace rules or changes for discussion to the
workers' congress - concerning pay, work allotment, hours, insurance, safety,
holidays and training.
Employers and trade unions will then jointly
decide on workplace agreements.
It stipulates trade unions have the
right to sign collective contracts with employers on behalf of workers.
In a position paper released yesterday, the European Chamber of Commerce
in China said it welcomes the law and its aim of improving labor conditions and
creating workplace harmony.
"A more mature legal environment should be
considered as an advantage to attracting foreign investment," the statement
However, the chamber said the key challenge remains compliance by
employers and the enforcement by authorities of the existing laws.
(China Daily 07/03/2007 page 1)
go into force：（法律、法规）开始生效
（英语点津 Linda 编辑）
About the broadcaster:
Bernice Chan is a foreign expert at China Daily Website. Originally from
Vancouver, Canada, Bernice has written for newspapers and magazines in Hong Kong
and most recently worked as a broadcaster for the Canadian Broadcasting
Corporation, producing current affairs shows and