Labor and Social Security authorities in southern China's Guangdong Province have warned companies
against illegally laying off employees in hopes of evading
obligations required under the country's new Labor Contract
Law.
An official with the administration in charge of labor
relations, Lin Jingqing, reiterated Saturday that unreasonable
dismissals are not acceptable under the law, Guangzhou-based
Information Times reports.
Lin's remarks came after local big businesses, including network
hardware manufacturer, Huawei Technologies Co., Ltd, laid off long
term employees to avoid signing them to contracts with unfixed
terms.
He said related regulations will be issued to punish evasive
employers.
China will enforce its new Labor Contract Law on January 1,
2008. The law will require employers to offer contracts with
unfixed terms to those who have worked for the company for 10
consecutive years upon reaching a negotiated consensus.
The contracts will secure stable careers for senior employees,
as they can not be terminated without legal reasons or the
occurrence of the specific conditions listed.
On the other hand, enterprises worried that the protected
contracts may cause side effects in human resource management, the
report said.
According to earlier reports, Huawei Technology defended the
layoffs, saying they could encourage employees to work harder and
help the company maintain competitiveness.
The company, one of China's most successful worldwide brands,
persuaded 7,000 of its employees approaching the ten year mark to
resign "voluntarily" and sign new contracts with fixed terms
ranging from one to three years.
The reports said the dismissals could cost the company one
billion yuan (US$134 million) in compensation, which triggered
heated debate nationwide.
The labor official ensured the new law will grant equal rights
to workers as well as businesses, saying the open-ended contracts
don't mean "iron food bowls" for employees.
Lin Jingqing said the contracts can be terminated by employers
if a worker is any of the following: in breach of duty; breaking
the law; or seriously affecting the enterprise's operation.
For an employee not able to work following illness or injuries,
employers also have the right to terminate the contract.
(CRI November 4, 2007)