Recruiting in China

THE Shanghai Labor and Social Security Bureau yesterday issued guidance for workers and employers when the new Labor Contract Law comes into effect on January 1 next year.

The bureau has issued a pamphlet to explain the new law to business to avoid breaching regulations when signing contracts with employees.

Adopted on June 29 by the Standing Committee of the National People's Congress (NPC), China's top legislature, the Labor Contract Law aims to improve workers' rights and establish a stable and harmonious relationship between them and their employers.

The new law splits contracts into three types - fixed-term, open-term and job-based.

An open-term contract should be signed after workers have been employed by the same unit for 10 years.

Wang Yang, director of the labor relation department of the bureau, said: "Previously when laborers worked for 10 years for the same enterprise, the company would discuss whether to sign an open-term contract with the worker, so it depended on the employer. But after the Labor Contract Law takes effect, it will depend on the employees, if they meet the circumstances."

Wang also said the rights of laborers on probation were often infringed upon. The new law stipulates that the probation period should not exceed one month if the period of the labor contract is less than one year, and not be more than six months if the contract period is more than three years.

It also requires the salary of the probationer should not be less than 80 percent of the lowest salary for the same post.

According to the new law, businesses should set up a collective consultation system under which, when the employers make important decisions on issues such as salary, vacation, training and discipline, they should put their plans to a meeting attended by representatives of workers for discussion.
The law also has specific stipulations on the implementation and termination of contracts, with the aim of establishing a stable relationship with workers.

China's current labor contract system was set up in the Labor Law enacted in 1995. The Labor Contract Law is the country's first law governing contracts.