China's National People's Congress (NPC), or top legislature, on
Friday defended a new labor contract law that will be brought into
effect from Jan. 1, 2008.
The new labor contract law required Chinese employers to sign
no-fixed-term contracts with their employees if the employees have
worked for them for more than ten consecutive years, or the two
sides have signed fixed-term contracts twice.
Some employers who have hired large amount of staff have started
to reduce their employees before the law takes effect by ending
contracts before expiration.
Some employers have prepared a compensation plan, some have not.
Public opinion has indicated that the main reason for their
practice is that "no-fixed-term contract" would either bring heavy
burden or less efficiency to the employers.
"Those practices (ending employee's contracts before expiration)
reflected employer's misunderstandings about the law," Zhang
Shicheng, an official with NPC's Standing Committee, told
"No-fixed-term contract does not mean a lifelong job and the new
law has granted employers right to fire employees with
no-fixed-term contracts if the employees violate laws or are no
longer capable for the job," Zhang said.
No-fixed-term contract has been widely adopted in developed
countries that could bring a more stable relationship between
employee and employer, he added.
The official told Xinhua that in China employees will be more
likely to be at a disadvantage when seeking jobs because of
employment pressure and the labor contract law's protection for
them is definitely "necessary".
Huawei, one of China's biggest telecommunications network
equipment makers, courted controversy in the third quarter of the
year, when it called on its staff who have worked for eight
consecutive years to hand in voluntary resignations. It was
believed to be a bid to avoid the consequences of the new law.
Huawei has spent about 1 billion yuan to pay for the
compensation to its employees who 'voluntarily' resigned and
shortly resumed posts with new contracts.
Zhang also revealed that the top legislature has started making
more detailed regulations to complete the new law and prevent
employers from carrying out other illegal practices in signing
contracts with employees.
(Xinhua News Agency December 22, 2007)