Recruiting in China

Job hunters with Olympic experience got a positive reception at a large-scale job fair here, Monday's China Youth Daily reported.

The fair on Sunday, the first after the Games, drew as many as 30,000 applicants.

More than 5,000 positions were offered by about 600 companies, including many big names such as China Life Insurance Company, Lenovo and Yum! Brands Inc.

Although not stated as a requirement, applicants with Olympic service experience were preferred by employers, the newspaper said.

An employee from Yum! who declined to be identified said that Olympic volunteers had a better sense of service, which companies needed.

China's Hainan Airlines Co. Ltd and Grand China Air Co. Ltd will recruit 300 Olympic volunteers as stewards and 50 as managers, said Zhu Yimin, President of Hainan Airlines and Grand China Air last week.

He said Hainan Airlines and Grand China Air will introduce an "Olympic air crew" on selected routes, carrying forward the "Olympic spirit and offering service of high quality to customers".

BEIJING, Sept. 18 (Xinhua) -- China's State Council, the country's Cabinet, issued an implementation regulation for Labor Contract Law here on Thursday in an effort to clarify confusion surrounding the law.

The new law, which was put into effect on Jan. 1, was hailed as a landmark step in protecting employee's rights. But many complained the law increased a company's operational cost as it overemphasized protection of workers.

One of the most debated terms was one that entitled employees of at least 10 years' standing to sign contracts without specific time limits. Some employers believed the "no-fixed-term contract" would bring a heavy burden to them and lower company vitality.

"By issuing the regulation, we hope to make it clear that labor contracts with no fixed termination dates did not amount to lifetime contracts," a Legislative Affairs Office of the State Council official told Xinhua.

The regulation listed 14 conditions under which an employer can terminate a labor contract. These included an employee's incompetence to live up to the job requirements, serious violations of regulations and dereliction of duty.

Another 13 circumstances were also included in the regulation, under which an employee could terminate his or her contract with an employer, including delayed pay and forced labor.

Compensation should be given if employers terminate the contract lawfully. Employers should double the amount of compensation if they terminated a contract at their own will. No further financial compensation was required, according to the regulation.

China's top legislative body, the Standing Committee of the National People's Congress, adopted the Labor Contract Law in June2007, which was followed by a string of staff-sacking scandals.

The best known was the "voluntary resignation" scheme by Huawei Technologies Co. Ltd., the country's telecom network equipment giant.

The Guangdong Province-based company asked its staff who had worked for eight consecutive years to hand in "voluntary resignations." Staff would have to compete for their posts and sign new labor contracts with the firm once they were re-employed.

Huawei later agreed to suspend the controversial scheme after talks with the All China Federation of Trade Unions.

The NPC Standing Committee said on Thursday it would start a law enforcement inspection at the end of September in 15 provinces, municipalities and autonomous regions.

The Legislative Affairs Office of the State Council issued a draft of the implementation regulation on May 8 to solicit public opinion. By May 20, the office had received 82,236 responses. On Sept. 3, the State Council approved the regulation.

HONG Kong's employment remained stable for the quarter ending August with unemployment at 3.2 percent and underemployment at 1.9 percent, the Census and Statistics Department of Hong Kong said yesterday.

Total employment rose by 13,100 to 3,546,300 from June to August while the labor force grew by 17,600 to an all-time high of 3,675,400.

The number of jobless people rose by 4,500 to 129,100 while the number of underemployed fell by 900 to 69,000.

Unemployment fell in the decoration and maintenance, communications and manufacturing sectors, while there were more jobless people in sanitary services, education services and welfare and community services sectors.

Underemployment falls were mainly seen in foundation and superstructure construction and retail trade sectors, offsetting the rises in the decoration and maintenance, and miscellaneous personal services sectors.

Hong Kong Secretary for Labor and Welfare Matthew Cheung said the unemployment rate has remained unchanged notwithstanding the expansion in labor supply. Cheung warned that there was no ground for optimism in the face of global financial turbulence.

"With the further downside risks to the already challenging external environment, the uncertainties clouding over the near term outlook for the local economy have increased," he said.

He added that the government will closely monitor the impact on job creation and employment while continuing to enhance training, retraining and employment services.

Salaries in India are expected to increase by 16 per cent in 2009, one of the highest in the Asia-Pacific region driven by strong economic growth and pressure on employers due to soaring inflation, a latest report says.

As per a report by the Hong Kong-based compensation firm HR Business Solutions pay increases in the Asia-Pacific region are likely grow even as the economies are expected to be impacted by the global slowdown.

"The forecast pay increase in India averaging 16 per cent is one of the highest among all the countries," the report stated.

The HRBS 2009 pay increase forecast is based primarily on four economic factors -- GDP growth, inflation, unemployment, manpower demand and past pay increase trends.

Elaborating further it said that the Indian economy is reported to be cooling, but still it is expected to achieve a growth rate of 7-8 per cent in 2008, which is among the strongest in the region after China.

"In addition, it has the fourth highest inflation rate of over 12 per cent in 2008 which increases pay rise pressures on employers. Labour demand is still robust and there is a lack of sufficient supply of the skills-set required by India's rapidly growing services, manufacturing, construction and retail industries to boot," the HRBS report added.

Economic growth rates in Asia are mostly forecast to be moderately lower in 2008 relative to 2007, while inflation rate across the Asia-Pacific region has soared to an all-time high.

"In many of the Asian countries, demand for manpower continues and in some cases, while general unemployment rate remains high, the labour market is extremely tight for qualified employees, for example, India, China and Vietnam," it stated.

Besides, in some developed economies such as Hong Kong, Singapore and Australia, while the unemployment rate is low, the demand for people has been strong.

Meanwhile, Sri Lanka is the other country which is forecast to see a higher double-digit rise in salaries of about 17 per cent in 2009.

The country's inflation rate of more than 16 per cent is the next highest in Asia after Vietnam and firms in Sri Lanka are hiring and facing challenges in recruiting and retaining skilled human capital.

Most of the neighbouring countries of India - Pakistan, China and Bangladesh are forecast to post around 11 per cent of expected pay increase.

In 2008, the salary increase in India had averaged at 14.9 per cent.

Other Asia-Pacific countries like China, Vietnam and Indonesia are forecast to see a rise of 11 per cent, 12.4 per cent and 12.7 per cent, respectively in 2009.

Earlier, in a separate report on Asian compensations, global HR consultancy Mercer had forecast that India was likely to witness over 14 per cent increase in salaries annually for the next three years as the corporates were facing shortage of talent.

The Mercer report had also stated that India, Vietnam and Indonesia were the only three countries in the Asia-Pacific region which are likely to see a double-digit increase in salaries until 2011.

The courts have ordered 10 pilots of China Eastern Airlines to compensate their employer a total of nearly 8 million yuan ($1.17 million) for leaving their jobs, local media has reported.

The Wuhan Intermediate People's Court ruled on Thursday that each of the pilots was to compensate the airline's branch in Wuhan, capital of Hubei province, 700,000 to 1 million yuan, depending on their service term and the training programs they received, the Changjiang Times reported.

Zhang Hua, who was ordered to pay 700,000 yuan to the airline, told the paper that the ruling was of no surprise to him.

Still, he said he did not regret leaving China Eastern.

"I don't want to live under constant high pressure," he was quoted as saying by the newspaper.

"I want to work for a company that is humane and that has a relaxed atmosphere."

In May last year, 13 pilots of the Wuhan branch of China Eastern handed in their resignations and were asked to pay a total compensation of more than 100 million yuan. The employer claimed that the money was to compensate it for the investments it made to train the pilots.

In August, the provincial labor arbitration committee ordered the 13 pilots to pay more than 9 million yuan to compensate the airline for their departure.

Daunted by the large amount, three of the pilots reportedly withdrew their resignations. The remaining 10 pilots brought their case to the Qiaokou District People's Court.

The court later announced that the 10 pilots should compensate their employer a total of nearly 10 million yuan. The airline lodged an appeal to the Wuhan Intermediate People's Court, which made the final ruling this Thursday.

Zhang Qihuai, a legal expert with the China University of Political Science and Law, said he had told the pilots in a legal consultation that the compensation being ordered by the courts was reasonable, since the amount was about what the company had paid for training the pilots.

"Most State-owned carriers in China sign tenure contracts with pilots to prevent them from leaving the company," Zhang said.

Company officials in Wuhan and Shanghai declined to comment on the ruling on Friday.

China has begun tightening its work visa application process for foreigners to keep out people with a criminal record, but critics say the implementation of the provision is "ill-conceived" and will impede even Fortune 500 companies' ability to hire expatriate talent.

Under the amended rules, foreigners applying for - or renewing - work visas (Z visas) must additionally submit a certificate from a police station in their home country - and authenticated by the Chinese embassy in that country - declaring that the applicant does not have a criminal record.

Initially, the additional paperwork requirement will apply only for foreign workers in Guangdong, the booming province in southern China that's better known as the "world's factory floor". But given that Guangdong has always been a "laboratory" for China's economic and administrative reforms, the provision is certain to be implemented nationwide, reckon immigration lawyers and business consultants.

The new regulation may have been inspired by some recent instances of Chinese businesses being defrauded by foreign-national employees who (it was later revealed) had previous criminal records in their home countries, say lawyers.

In itself, the 'no criminal record' certification isn't an unreasonable requirement. "The motive (for the introduction of the new provision) is to put in place reasonable criteria for people to obtain a work permit," says Chris Devonshire-Ellis, senior partner at Dezan Shira & Associates, a professional services firm providing FDI, legal, tax, accounting and due diligence services for multinational corporations.

But there are "serious shortcomings" in the manner in which it has been implemented, he adds. "It will have a negative impact on the ability of foreign-invested enterprises in China to be properly managed, and a negative impact in the way foreign business people view China as being a reasonable place to work."

As a result of this provision, "it's going to be very frustrating for well-meaning businessmen and employers to get the right quality of senior executives and expatriate personnel into position in China," says Devonshire-Ellis.

Indians face 'discrimination'. In particular, notes Devonshire-Ellis, "certain nationalities, among them Indians, face discrimination in obtaining China visas purely on the basis of their passport."

Although this appears to be a haphazard situation, implemented differently across the country, China's administrative infrastructure appears unable to determine whether an individual is "undesirable" or a senior executive in a multinational. "This is becoming an area of concern and is damaging China's foreign direct investment environment," he adds.

There appears to have been "little or no dialogue" between Chinese immigration authorities and the international community about the implications of putting in place the 'no criminal record' regulation, says Devonshire-Ellis.

In some countries, like New Zealand, there is no such certification process in the first place. In others, such as the US, "there is no formal or well-defined procedure to obtain such a document."

In effect, China has invoked its domestic administrative system, which is based on the restrictive hukou (household registry) system, and imposed it on foreign nationals who apply for a work visa. Under the hukou system, a Chinese national's personal records are stored in their hometown, which is their place of birth. All requests to relocate in China or to engage in business are serviced by the local police station in the hometown, notes Devonshire-Ellis. "But such a procedure simply cannot be assumed to be in place in other countries, and in fact it largely isn't," he observes.

Complying with the new regulation is also fraught with logistical nightmares for those who are already working in China and need to renew their visas. "The request for a certificate from a police station in the applicant's country of origin ignores the fact many expats have worked overseas for years and may not have any contacts with their local police station in their home country," points out Devonshire-Ellis. "Second, it requires an expensive trip back home to secure such documentation."

In any case, in many countries, the administrative procedure to supply such a document does not exist. Even if it does, it's unlikely to be issued by "the local police station" in countries such as the United Kingdom, most European nations, and the US and Canada, where the registry of criminal offenders is maintained at a national, not local, level.

The latest work visa measure comes barely five months after China tightened the provision for securing business (F) visas and tourism (L) visas. In the run-up to the Olympics, and following the riots in Tibet in March, China introduced stringent provisions that still remain in place. Immigration lawyers in Shenzhen expect the F visa and L visa provisions to be relaxed a bit after the Paralympics in Beijing, but with greater monitoring to prevent their abuse.