II. Formation of New Labor Relations

In the course of establishing and improving the socialist market economy system, labor relations in China have become increasingly complicated and diversified. China commits itself to the maintenance of harmonious and stable labor relations. It has formed an initial system of laws and regulations, with the Labor Law of the People's Republic of China as the main body, to adjust labor relations, and has established the labor contract and group contract systems, tripartite coordination mechanism, labor standard system, labor dispute handling system and labor protection supervisory system, basically shaping up a new type of labor relations in consonance with the socialist market economy.

Instituting a Labor Contract System

China started to try out a labor contract system in the mid-1980s, and energetically promoted it in the 1990s. As a result, the labor contract system is now universally implemented in urban enterprises of every description. Chinese laws stipulate that employers and employees shall establish labor relations in accordance with the law, and conclude written labor contracts, with or without fixed periods, or with a period to complete the prescribed work; during the conclusion of the labor contract, the two parties to the contract must abide by the principles of equality, voluntariness and reaching unanimity through consultation. The labor contract system clarifies the rights and obligations of the employers and employees, and safeguards the employees' right to select jobs and the employers' right to select employees.

Establishing a Group Contract System

The Chinese government encourages enterprises to continuously strengthen the functions of the workers' congresses and trade unions, and improve the system of employees' democratic participation. To form a self-coordination mechanism of labor relations in enterprises, China has trial-implemented and promoted a group contract system through equal consultation. Chinese laws and regulations stipulate that employees of an enterprise may conduct equal consultation and sign group contracts with that enterprise via trade union representatives or representatives directly recommended by the employees themselves, with regard to labor remuneration, working hours, rest and vacation, labor safety, labor hygiene, insurance, welfare and other matters. Equal consultation takes diversified forms, and group contracts have wide-ranging contents. Signing group contracts through consultation between the trade union and the enterprise has now been adopted by most enterprises.

In recent years, the group contract system has not only been popularized in non-state enterprises, but also been gradually carried out during the reform of state-owned enterprises. By the end of 2001, the number of group contracts signed by enterprises nationwide and submitted to the labor and social security administration departments for the record had reached 270,000.

Setting Up a Tripartite Coordination Mechanism

China has made active efforts to establish a government-trade union-enterprise tripartite coordination mechanism in conformity with its actual conditions. In this mechanism, representatives from government labor and social security departments at all levels, trade unions and enterprises constitute a coordination organ to conduct communication and consultation on major problems relating to labor relations, and put forth suggestions on the drafting of labor and social security regulations, major reform programs, policies and measures concerning the interests readjustment of the three parties.

In August 2001, the Ministry of Labor and Social Security, All-China Federation of Trade Unions and China Enterprise Association jointly established the State Tripartite Conference System of Labor Relations Coordination, and convened the first national tripartite conference of labor relations coordination, setting a standard and stable operating mechanism for China's labor relations coordination. So far, a dozen provinces and municipalities, including Beijing, Tianjin, Hebei, Shanxi and Jiangsu, and the two cities of Shenzhen and Dalian have set up regional tripartite coordination mechanisms for labor relations. Among them, Shanxi and Jiangsu provinces have established such mechanisms at the provincial, prefecture/city, and county/district levels.

Bettering the Labor Standard System

The Chinese government attaches great importance to rationally determining, legally promulgating and timely adjusting labor standards to guarantee the lawful rights and interests of workers and promote economic and social development. At present, a labor standard system is basically in place, centering on the Labor Law of the People's Republic of China and covering areas such as working hours, rest and vacation, wage, prohibition of the use of child labor, special labor protection for women employees and under-age workers, work quotas and job safety and hygiene. The system has been adjusted and improved along with the country's economic and social development.

To ensure that all workers enjoy the right to work, rest and vacation, China adopts an eight-hour-day, 40-hour-week system. When the employing unit needs to extend working hours, they must consult with the trade union or the workers, and generally the extension should not surpass one hour a day, in special cases not more than three hours a day or not more than 36 hours a month. All workers are entitled to enjoy legal holidays and at least one day off a week.

The state prohibits hiring people under the age of 16, and punishes the illegal employment of child labor. The state prohibits all employers from hiring women and minors (ages 16 to less than 18) for tasks explicitly prohibited by state regulations. China has formulated national, trade and local standards on job safety and hygiene. In order to improve the management system of job safety and hygiene, in 1999 the Chinese government promulgated related standards, at the same time starting attestation work. So far, China has worked out more than 200 national and trade standards on work and personnel quotas. It has also promulgated other labor standards, such as job classification standards and job skill standards.

To ensure that labor standards are scientific and rational and that they are implemented smoothly, the government solicits suggestions from trade unions, enterprises, specialists and scholars while formulating, promulgating or adjusting labor standards. The Chinese government has always maintained that labor standards must be in sync with the country's level of economic and social development, that they should guarantee basic human rights and promote economic development and social progress, and on this basis should be gradually improved. China values the experience of other countries in formulating and implementing labor standards and, in time, will accede to relevant international labor conventions in line with the actual conditions of its economic and social development.

Improving the System for Handling Labor Disputes

The Chinese government holds that all labor disputes should be handled according to law and in a timely fashion, and that the lawful rights and interests of both parties involved should be protected. It encourages both parties in a dispute to solve their problems through negotiation and consultation. Chinese laws and regulations clearly define the procedures and organs responsible for the settlement of labor disputes. According to the regulations, whenever a labor dispute arises between a worker and an enterprise, either party may apply to the labor dispute mediation committee at the enterprise for mediation. If the mediation fails or if neither party wants mediation, then they may apply to the local labor dispute arbitration committee for arbitration. If either party is not satisfied with the decision of the arbitration committee, he or she may file a lawsuit with a people's court.

By the end of 2001 China had established 3,192 labor dispute arbitration committees at the county-level or above, consisting of nearly 20,000 full-time and part-time arbitrators. From August 1, 1993, when the Regulations of the People's Republic of China Concerning the Handling of Labor Disputes in Enterprises was promulgated, to the end of 2001, labor dispute arbitration committees across the country officially handled 688,000 labor disputes, which involved 2,368,000 workers. More than 90 percent of these disputes were settled. Besides, labor dispute arbitration committees at various levels handled 503,000 labor disputes that did not officially file for the record with them.

Setting Up a Labor Security Supervision System

In 1993, China embarked on the establishment of a supervision system for labor security. The Labor Law of the People's Republic of China and Law of the People's Republic of China on Administrative Punishment stipulates the responsibilities and work procedures of labor security supervision organs. Labor and social security administration departments supervise all employers to make sure they observe labor and social security laws and regulations. They have the right to halt any violation of these laws and regulations and order the violator to correct it; they may also issue disciplinary warnings or impose fines on the violator. Any organization or individual has the right to report or file a complaint about any act that violates labor and social security laws or regulations. When a person concerned thinks that a labor and social security administration department has violated his or her legitimate rights in the course of supervision and execution of the laws, he or she may initiate an administrative review or bring an administrative suit.

According to the principle of promoting law-based administration and enforcing laws strictly, labor and social security administration departments at all levels have constantly strengthened their law enforcement and established or improved labor security supervision organizations. By the end of 2001, China had set up 3,174 labor security supervision organs, with 40,000 labor security supervisors.

Reforming the Wage and Income Distribution System

The Chinese government adheres to a diversified distribution system with distribution according to work as the main form. The principle is to give priority to efficiency with due consideration to fairness. Reforms are being made to the wage system so that market mechanism can play its regulatory role in the distribution of income and that workers' incomes can increase as the economy develops and enterprises' economic returns increase. The Labor Law of the People's Republic of China, Regulations on Minimum Wages in Enterprises and Provisional Regulations on Wage Payments contain clear-cut provisions on standardizing the distribution of wages. The Chinese government formulates minimum wage standards according to law and makes timely adjustments to them, standardizes wage payment methods, and regularly issues information regarding wage guidelines, guidance wage levels for the labor market, and labor costs. It encourages enterprises to trial-implement the system of collective wage negotiation and guides them to adopt diverse wage systems and distribution forms. While safeguarding enterprises' right to independent decision-making in the matter of wage distribution, the government also guarantees workers' right to receive the remuneration for their work according to law. At present, a minimum wage system has been basically established across the country, and more than 10,000 enterprises have started to experiment with pilot wage schemes through collective negotiations. Twenty-six provinces, autonomous regions and municipalities directly under the Central Government regularly release wage guidelines, and 88 cities publicize guidance wage levels for the labor market.

Since China adopted the reform and opening-up policy in late 1978, the national economy has developed rapidly, and the wages of urban employees have kept increasing. By the end of 2001, their annual per-capita money wages had reached 10,870 yuan, 16.3 times the figure for 1978. After allowing for inflation, the average annual increase rate was 5.5 percent in real terms.