Fifty-three sacked employees negotiated compensation with Transpo Electronics (Shanghai) Co Ltd yesterday, after staging a six-hour rooftop protest over the weekend.
The factory will consider paying the workers two weeks' wages for each year of service as compensation for losing their jobs, according to the management committee of Waigaoqiao Free Trade Zone, who helped broker the talks.
Previously, the workers had asked for one month's salary for each year of work. The company told them it would not sign contracts with them next year when their current contracts expire on December 31.
Managers told employees on November 30 that they would not need to come to work the next day.
The workers said that because most had worked at Transpo for more than five years and some for up to 11 years, the firm had dismissed them before the new Labor Contract Law comes into effect on January 1.
Under the new law, employees who have worked for the same company for 10 consecutive years are offered an open-term contract.
However, according to the Shanghai Labor and Social Security Bureau, Transpo's move did not violate the current labor law or the new labor contract law. The bureau said it is legal for companies to refuse to sign next year's labor contracts after the current ones expire.
"According to the law, the company need not pay compensation in the circumstances because both employer and employee have right to determine whether to continue to choose each other after the contract expires," said an official surnamed Wang from the bureau's employee relations division.
"But we don't advocate that enterprises dismiss long-serving employees after contracts expire," he said. "We have been supervising local firms to avoid contracts being terminated."
(Shanghai Daily, December 11, 2007)