Employment Contract Law is Passed
(The following is from an e mail Newsletter sent out by Baker & McKenzie and will be the topic of many future posts bith here and elsewhere. The repurcussions of this will be felt globallyand I will do my best to keep you informed of how this will affect your recruiting in China...)
On June 29, 2007, the Standing Committee of the National People’s Congress (NPC) approved the long-awaited Employment Contract Law (ECL).
The new law marks a significant change in PRC employment law. Overall, the impact of the ECL will be to expand individual employee rights and protections, and to strengthen collective rights through unions, employee representative congresses, and collective contracts. The ECL will come into effect on January 1, 2008. The most significant changes brought about by the ECL include the following: · An employer may have to negotiate company rules/codes of conduct/employee handbooks with a union or an “employee representative congress” elected by all employees. Such congresses may be established at any single facility of a multi-facility business. · Employees will be entitled to open-term contracts after one fixed term contract has been completed and the parties agree to continue the employment relationship. Since China does not recognize at-will employment and statutory termination grounds are narrowly defined, employees will have long-term secured employment. · The use of agency workers is restricted to temporary, substitute, and auxiliary positions. · Regional collective bargaining is encouraged for certain industries and could cover competing entities in the same industrial sector. Baker & McKenzie will shortly provide a Client Alert analyzing changes made to current law as a result of the ECL. An English-language translation of the ECL will be available upon request. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This Publication has been prepared for clients and professional associates of Baker & McKenzie. Whilst every effort has been made to ensure accuracy, this Publication is not an exhaustive treatment of the area of law discussed and no responsibility for any loss occasioned to any person acting or refraining from action as a result of material in this Publication is accepted by Baker & McKenzie.