The country's top telecoms equipment-maker Huawei Technologies
said yesterday that the mass resignation last month by more than
7,000 of its employees was simply part of a program to boost its
competitiveness.
The privately owned company is one of the first in China to give
its staff stock options. However, it said it now needed to revise
employment contracts to increase its efficiency, which had been
damaged by both the stock option plan and its unique "job number"
scheme.
Under the latter, workers who joined the Shenzhen-based company
between its establishment in 1988 and 1999 were paid higher
salaries and given a better benefits package.
However, in a statement issued to China Daily, Huawei said the
stock option and job number schemes, which had initially helped
boost morale in the firm's early days, had in more recent times
caused resentment among those not covered by them.
As a result, more than 7,000 employees who had been with the
company for the past eight years or more, last month agreed to
resign their original contracts in return for compensation payments
and the chance to reapply for their old jobs, the statement
said.
The move, however, led to speculation Huawei was actually
attempting to exploit a legal loophole ahead of the introduction of
the Labor Contract Law on January 1.
Under the new legislation, employees who have worked for a
company for more than 10 consecutive years are entitled to sign
open-ended labor contracts, rather than the more commonly used
fixed-term agreements.
Huawei denied it was trying to dodge the law saying all workers
had agreed to resign and reapply.
"We have had problems with the crossover of employees within the
parent company, subsidiaries and joint ventures, as well as with
unclear job descriptions, and that is not good for our business
operations" the statement said, adding that the job number scheme
also had to be revised.
The move is part of a series of staff-related reforms, which
covers everything from salaries to welfare and insurance benefits,
the statement said.
The move comes at a time when the global telecoms industry is on
a downturn.
And as Chinese authorities continue to delay the awarding of
licenses to operators to build the next generation mobile-phone
networks, almost all equipment-makers, including foreign players,
have been hit by a slump in business.
Lin Jingqing, an official with the Guangdong department of labor
and social security, said national authorities will soon issue
supporting regulations to the Labor Contract Law.
(China Daily November 6, 2007)