The government has warned domestic and overseas companies
against trying to bypass the new Labor Contract Law by forcing
employees close to completing a decade in service to quit and
The All China Federation of Trade Unions knows about such moves
and has begun intervening to pre-empt them, an official surnamed Hu
told China Daily yesterday. "We have carried out probes into
Chang Kai, an official with the Legal Affairs Office of the
State Council, asked the companies to study the law properly before
initiating a move against it.
The new law, which becomes effective from next year, says an
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
one who renews his labor contract after working for two fixed terms
"The national and local legislatures, the State Council and
government agencies will soon issue judiciary interpretation and
guidelines to stop employers from trying to dodge the law," Chang
According to the interpretation, a firm will be seen as trying
to dodge the law if it prompts mass resignation, 21st Century
Business Herald quoted him as having said. And "violators will
have to pay a heavy price."
Chang criticized some so-called experts for providing
"countermeasures" for employers to bypass the new law.
Many companies began worrying that labor cost would rise and it
would become more difficult to sack employees on open-ended
contracts once public opinion was solicited on the law in March
The US retailing giant Wal-Mart fired about 100 employees at its
sourcing center in China last October, claiming the layoff was part
of its global restructuring.
Huawei, China's top telecom gear maker, recently prompted more
than 7,000 of its employees in service for more than eight years to
quit and reapply in an apparent bid to dodge the new law.
(China Daily November 9, 2007)