Home / Government / Central Government News Tools: Save | Print | E-mail | Most Read
New Labor Law to Set Compensation Limit
Adjust font size:

Workers whose contracts have been broken by their employers will be paid no more than 12 months' salary as compensation, under a new draft law proposed yesterday.

But the compensation cap will not apply if employees have been fired for serious workplace breaches or disciplinary action, or if the employer can prove they have serious economic problems.

Legislators started to read the third draft of the controversial labor contract law, which for the first time details a standard compensation for contract termination.

The draft, discussed at the 27th meeting of the Standing Committee of the 10th National People's Congress (NPC), the top legislature, states that if employers want to end contracts, they should pay employees the equivalent of one month's salary for every year of service, capped at 12 months.

The calculations will be based on the employee's average monthly salary over a 12-month period, prior to the end of the contract.

However, high earners will be paid compensation no more than three times the local monthly average salary, according to the draft.

Li Yuan, director of the administrative law division of NPC Standing Committee's legislative affairs commission, said the average monthly salary in Beijing last year was about 3,000 yuan (US$388.6).

Hu Guangbao, deputy director of the NPC Law Committee, said such stipulations were made in response to public suggestions.

The existing Labor Law spells out the need for economic compensation, but does not provide uniform guidelines. The previous draft of the labor contract law did not detail the issue either, leaving it to be set by State Council regulations.

Li said many overseas enterprises and organizations, including the American Chamber of Commerce in Shanghai (AmCham Shanghai), have also suggested setting the standard by law so that employers were able to calculate costs.

The AmCham Shanghai said in a letter to China Daily it applauds the Chinese government for its initiative.

"The stipulation on compensation is a major change in the latest draft, and it directly affects the interests of employers and employees," Li said.

But Li said that because the labor contract issue is very complicated, the draft law needs further discussion.

Official figures show that the NPC received about 192,000 public responses in the month after the draft was published last March for consultation. Only the Constitution, in 1954, received more.

(China Daily April 25, 2007)

Tools: Save | Print | E-mail | Most Read

Related Stories
Legislators Set for 3rd Reading of Draft Labor Law
Labor Law of the People's Republic of China
Enforce New Labor Law
Vote on Labor Contract Law Put Off
Protect Workers' Rights
Chinese People Debate Draft of Labor Contract Law
Questions and Answers More
Q: What Are the Custom Procedures to Export Personal Articles?
A: According to the Custom Law, any long-term non-resident passenger importing or exporting articles for personal use must submit a written application to the appropriate customs agency personally or by authorizing an agent.
Useful Info
- Who's Who in China's Leadership
- State Structure
- China's Political System
- China's Legislative System
- China's Judicial System
- Mapping out 11th Five-Year Guidelines
- Chinese Embassies
- International Department, Central Committee of CPC
- State Organs Work Committee of CPC
- United Front Work Department, Central Committee of CPC
SiteMap | About Us | RSS | Newsletter | Feedback
Copyright © China.org.cn. All Rights Reserved     E-mail: webmaster@china.org.cn Tel: 86-10-88828000 京ICP证 040089号