Huawei, China's top telecom manufacturer, recently requested
that staff members employed with the company more than eight years
hand in "voluntary resignation" letters and re-apply for their
During the reapplication process their job descriptions would
remain unchanged, but the length of their service would be
re-calculated. All employees accepting the new arrangement were
offered compensation from the company at a total cost of 1 billion
yuan (US$134 million).
This new employment scheme has thrust Huawei into the limelight
amid vocal public concerns. The Shenzhen-based company described
the move as a human resources reform aimed at streamlining
management and strengthening their position in the marketplace.
However, many experts believe Huawei is actually attempting to
dodge upcoming changes in national employment policy. The new Labor
Contract Law, which takes effect January 1 next year, says an
employee who has worked for a company more than ten years is
entitled to sign an open-ended labor contract. The same option will
also be made available to an employee who renews his labor contract
after working two consecutive fixed terms.
A recent survey, organized by the Investigation Center of
China Youth Daily, shows that 42.7 percent of the 2,212
interviewed applaud Huawei's staff reforms, while 57.3 percent do
According to the survey, opponents consider this a display of
capital power, because "the employees working more than 10 years at
Huawei are the backbone of the company, and they are the most
important for the survival of the enterprise. Huawei's attitude
toward its 'veteran' workers will definitely make the company less
attractive to talented professionals."
Supporters, on the other hand, believe Huawei's strategy was
misread. "The 'voluntary resignation' scheme aims to maintain
vitality and seeks further development. More than 7,000 veteran
employees, who are also shareholders of Huawei, will get 1 billion
yuan (US$134 million) from the adjustment and still receive bonuses
in the future, so why not be happy for that?"
"I have paid great attention to Huawei's 'voluntary resignation'
scheme since the beginning. Our company is much smaller in size
than Huawei, but we have some similar problems in human resources.
I want to know how relative departments will deal with these
problems so that we can use as a reference in the future,"said Ms.
Lin, a human resources director of an IT company located in
14.5 percent of the participants believed that their companies
would follow suit and sign new labor contracts with veteran
"Since the draft of the new Labor Contract Law was released,
many firms have come in for consultation on labor contract rules
and regulations. Some enterprises consulted me on how to "dodge
risks," but companies can not shirk their responsibilities under
the new law and there will be consequences for companies trying to
evade," said a lawyer.
In addition, 87.4 percent of the respondents believe the new law
does not provide excessive protection for employees, while 69.4
percent think the protection is not enough.
Nearly 70 percent feel that employees don't have the power
necessary to protect their rights.
Speaking on termination of contracts, some experts said that
there was no essential distinction between a labor contract with
fixed terms and an open-ended labor contract. 75.5 percent do not
believe open-ended contracts means the employees have jobs for
(China.org.cn by Yang Xi, November 12, 2007)