Huawei, China's top telecom manufacturer, recently requested that staff members employed with the company more than eight years hand in "voluntary resignation" letters and re-apply for their jobs.
During the reapplication process their job descriptions would remain unchanged, but the length of their service would be re-calculated. All employees accepting the new arrangement were offered compensation from the company at a total cost of 1 billion yuan (US$134 million).
This new employment scheme has thrust Huawei into the limelight amid vocal public concerns. The Shenzhen-based company described the move as a human resources reform aimed at streamlining management and strengthening their position in the marketplace.
However, many experts believe Huawei is actually attempting to dodge upcoming changes in national employment policy. The new Labor Contract Law, which takes effect January 1 next year, says an employee who has worked for a company more than ten years is entitled to sign an open-ended labor contract. The same option will also be made available to an employee who renews his labor contract after working two consecutive fixed terms.
A recent survey, organized by the Investigation Center of China Youth Daily, shows that 42.7 percent of the 2,212 interviewed applaud Huawei's staff reforms, while 57.3 percent do not.
According to the survey, opponents consider this a display of capital power, because "the employees working more than 10 years at Huawei are the backbone of the company, and they are the most important for the survival of the enterprise. Huawei's attitude toward its 'veteran' workers will definitely make the company less attractive to talented professionals."
Supporters, on the other hand, believe Huawei's strategy was misread. "The 'voluntary resignation' scheme aims to maintain vitality and seeks further development. More than 7,000 veteran employees, who are also shareholders of Huawei, will get 1 billion yuan (US$134 million) from the adjustment and still receive bonuses in the future, so why not be happy for that?"
"I have paid great attention to Huawei's 'voluntary resignation' scheme since the beginning. Our company is much smaller in size than Huawei, but we have some similar problems in human resources. I want to know how relative departments will deal with these problems so that we can use as a reference in the future,"said Ms. Lin, a human resources director of an IT company located in Zhongguancun, Beijing.
14.5 percent of the participants believed that their companies would follow suit and sign new labor contracts with veteran employees.
"Since the draft of the new Labor Contract Law was released, many firms have come in for consultation on labor contract rules and regulations. Some enterprises consulted me on how to "dodge risks," but companies can not shirk their responsibilities under the new law and there will be consequences for companies trying to evade," said a lawyer.
In addition, 87.4 percent of the respondents believe the new law does not provide excessive protection for employees, while 69.4 percent think the protection is not enough.
Nearly 70 percent feel that employees don't have the power necessary to protect their rights.
Speaking on termination of contracts, some experts said that there was no essential distinction between a labor contract with fixed terms and an open-ended labor contract. 75.5 percent do not believe open-ended contracts means the employees have jobs for life.
(China.org.cn by Yang Xi, November 12, 2007)
