Employers Paradise

There are 200 million migrant workers in China’s cities, with a potential backup pool of 100 million more waiting in the countryside. They see themselves treated as second class citizens at best, according to a survey by Shanghai’s Fudan University, working long hours that make them accident-prone from tiredness and too weary to study for the qualifications to get a better job. Compounding their misery, inflation is more than chewing up rising earnings.

Not that much of that is news. But this is one of the first surveys to be published since a new labor law came into effect at the beginning of this year, even though the survey’s field work was probably done last year.

The new law is meant to protect worker’s rights, simplifying a hodgepodge of laws, regulations and judicial decrees. One loophole closed is the one that let employers deny workers rights by the simple expedient of not issuing the employment contract in which the rights were enshrined; workers now get an employment contract by default.

Donald H. Straszheim, who runs the China practice of Roth Capital Partners, writes in Forbes:

What we are already seeing is the creativity of employers to find ways to circumvent the new rules to avoid being saddled with higher costs.

We are seeing new labor contracts, two half-time shifts, the use of outside “staffing companies,” the creation of “new companies” to do the same work, so-called voluntary resignations before year-end 2007 only to be rehired on Jan. 1, 2008, and the like. Talk about creativity. Not surprisingly, employers have more power than workers–even in China.

The old rules made China an employers paradise because they were laxly enforced in the extreme, especially in the private sector (state and foreign-owned enterprises largely played by the book). Will the new ones, drawn up partly in response to foreign criticism of China’s labor rights, and partly in response to growing labor unrest, fare any better? It will all come down to enforcement.


Filed under Economy, Politics & Society

3 responses to “Employers Paradise

  1. Pingback: Responsible Roundup: 1/17/08 : ResponsibleChina.com

  2. Unlike most of China’s other laws, this one will NOT all come down to enforcement. At least not to enforcement by the government. This new laws gives employees all sorts of causes of action for real damages against their employers/ex-employers and they know it. More importantly, Chinese attorneys know it and they are salivating at the prospect of bringing massive lawsuits against companies that violate the new laws. Unless the courts ignore the new laws in these lawsuits, the employees themselves will serve as an enforcement arm, sort of the equivalent of what in the United States is referred to as private attorney generals. The fact that employers are doing everything they can to get out from under the new laws shows they know those laws are almost certainly going to be “for real.”

  3. CB

    You chaps know the Chinese legal system better than I do, so I bow to your expertise. All I would say by way of reply is that the habit of courts acting as an administrative rather than a judicial arm of the state dies hard.

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