Labor dispute lawsuits nearly doubled last year over 2007 because of the economic downturn and the new Labor Contract Law's adoption, a Supreme People's Court (SPC) senior official said yesterday.

While the national figure increased by 95 percent year-on-year, it nearly tripled in some eastern and southern coastal cities during the period, SPC executive vice-president Shen Deyong said. He did not reveal the figures for last year or 2007.

Shen said the current global financial crisis is one cause of the drastic increase.

"Many companies fired employees, cut salaries and bonuses, or encouraged staff to take leave without pay to cut costs in face of the economic downtown," he said. "That caused many disputes."

Official figures showed at least 20 million migrant workers have become unemployed because of the current crisis. Media have also reported many bosses fled their companies, leaving tens of thousands of workers unpaid.

Another reason for the rise is the Labor Contract Law's enforcement from Jan 1 last year, Shen said.

The new law requires firms to award open-ended contracts to employees who have worked with the companies for 10 years or more, as well as to workers who have completed two fixed-term contracts, to protect them from dismissal without cause.

It also mandates companies make larger contributions to pension and insurance funds, because many firms had previously derived profits from violating labor rights.

But the law has become controversial, as many people have said such regulations would reduce labor flow, weaken enterprise vitality and increase human resources' costs. Some companies even fired employees to avoid awarding them open-ended contracts, which also created disputes.

(China Daily March 3, 2009)