Wednesday, January 02, 2008

Law Gives Chinese Workers New Rights


By Don Lee
The Baltimore Sun

Sunday 30 December 2007

Employers, fearing higher costs, resist; some are reportedly doing so with violence.

Shenzhen, China - Huang Qingnan had just reached a tiny fast-food stand in a rundown neighborhood here when two men in dark clothing appeared out of nowhere. They unsheathed watermelon-cutting knives concealed in newspapers and began slashing Huang's legs and back with the 16-inch blades.

The 34-year-old labor activist shrieked in pain. Witnesses said he turned and lunged toward one attacker, then collapsed on the dusty pavement.

"Catch them, catch them!" onlookers shouted as the two strangers fled, scurrying off to the end of the block, where they were met by a motorcyclist who spirited them away late one afternoon last month.

Huang, interviewed at a hospital here where he was recovering, said he believed the attack was motivated by his work to publicize China's new labor contract law: Starting Jan. 1, workers nationwide will gain new rights, especially when it comes to long-term job security.

Employees with 10 consecutive years at a company will be entitled to a contract without a fixed end date, essentially giving them lifetime employment. Severance payments will be mandatory for anyone whose contract expires or who leaves after giving 30 days' notice or is laid off, except in special cases of large-scale layoffs or dismissals because of criminal liabilities and other serious violations of company rules.

Here in this southeastern industrial city near Hong Kong, people such as Huang have been reaching out to migrant workers and educating them about their protections under the new law. Although lacking proof, Huang and other labor advocates believe some employers are trying to shut them up.

"The government is not promoting this law, so we need to," said Li Jinxin, an assistant with a Shenzen labor law firm who was pushed into a van last month and taken to a remote street where men clubbed him with iron pipes. Sitting in his apartment here last week, his cast-encased leg resting on a red stool, the 29-year-old Li said employers "wish we did not exist."

Local police and government labor officials declined to comment about the beatings.

Analysts say that China's overhaul of employment regulations - adopted in June after months of hearing opinions from interest groups - was needed in the face of China's rampant industrial development on the backs of largely unprotected laborers. Stories abound of workers toiling in inhumane conditions, being fired summarily and struggling for years to collect unpaid wages from unscrupulous employers.

"This law is beneficial to the job stability for migrant workers," said Wang Chunguang, a deputy director in the sociology department at the Chinese Academy of Social Sciences in Beijing. And that, he said, will help narrow the economic and social gap between China's poor and the rich, its countryside and cities.

"For the entire society's development, this large mobile population should be stabilized, and the premise of that is stable employment," he said.

But many employers, including foreign multinational corporations, regard the law as too restrictive, according to consultants and business groups. Some have warned that it will add hefty costs and could hurt China's competitiveness.

Most provinces in China require labor contracts between companies and their staff. But contracts are typically for one or two years. Many factories ignore labor agreements altogether, although now they are scrambling to institute written employment contracts because failure to do so under the new law could subject them to doubling a worker's salary.

Some key details of the law haven't been spelled out yet. For example, it's not clear whether a worker with 10 consecutive years at a company will be entitled on Jan. 1 to an open-ended contract or whether years of employment will be calculated starting from the effective date of the law.

But employers aren't taking any chances. Some companies have been firing workers, particularly veteran staff, or pressuring them to sign new contracts, in an apparent effort to circumvent some of the law's key provisions.

Huawei Technologies Co., a telecommunication equipment giant based in Shenzhen, reportedly offered a bonus to employees with at least eight years of service to resign and reapply for their positions - largely seen as a move to sidestep obligations to veteran workers under the new law.

Huawei representatives declined requests for an interview but said in a statement that some staff had signed new employment contracts as a result of the upcoming law. The company, which has operations in the U.S. and other countries, says it strictly abides by local labor regulations.

Analysts said technology companies might be particularly concerned about being hamstrung by the new law. Facing rapid changes in technology and market forces, these employers insist they need more flexibility to hire and fire swiftly. The new law would allow companies to dismiss workers who are not qualified but only after having provided additional training or a change in their position.

Wal-Mart sparked a controversy recently when local news media reported that the company had dismissed about 110 purchasing department workers in China. Labor advocates criticized the move as a scheme to pre-empt restrictions in the new law. Wal-Mart spokespersons in China declined to comment.

"Whether Wal-Mart or Huawei, the largest misunderstanding they have is the belief that this new law increases labor costs," said Guo Jun, director of the Democratic Management Department at Beijing-based All China Trade Union. Guo said employers would still have a lot of flexibility with part-time staff, and he contended that long-term contracts would ultimately pay off for employers with greater loyalty.


Don Lee writes for The Los Angeles Times.

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