Labor contract law is getting lawyers pretty excited
Judging from the latest comments at the China Law Blog, China will be different after the 1st of January 2008:
CLB's Steve Dickinson has been working with many foreign companies to get them ready for the new law, called the labor contract law (LCL) and he just wrote a column for China International Business magazine on the basics involved. The article is entitled, "Power to the People," with the "people" being employees and Chinese lawyers, who are already salivating about suing foreign companies on this. And when I say salivating, I mean salivating. We have heard from Chinese lawyers who already have plaintiffs all lined up and ready to sue various foreign companies for when those foreign companies fail to comply. I kid you not.
The new labor law is going to apply to all employers, no matter how few employees (even one!) they might have. It is going to require all labor contracts be in writing and it will impose significant penalties on employers for failing to comply with this. Employees can claim double salary for months worked without a contract for up to 12 months’ salary. This rule is absolutely going to apply to "informal" employment relationships common to so many foreign businesses doing business in China. Expect a whole slew of lawsuits to be filed on January 1, 2008, by employees seeking double damages for the 12 months they just completed without a contract.
Do I see some salivation dripping from this piece too? One of the good things of China, compared to the US, is that lawyers are not defining the law, and the way they make their livelihood, but the government. And the government is going for a harmonious society, not for a battle field in court. I agree that the Labor Contract Law is meant to make a change, but it will not be going that fast.
One of the arguments in the run-up to this law was that China had been unable to implement the previous law, so how would it be able to uphold a much tougher law? No reason for panic, I would say.
posted by Fons Tuinstra at
10:55 AM
2 Comments:
Wrong, wrong, wrong. I would probably agree with you if this new law required government enforcement, but it doesn't. It merely requires greedy lawyers and I would think you would agree there are plenty of those. The law is set up to provide for big damages to employees and I can tell you there are already plenty of Chinese lawyers who will sue on it and win. Don't even bother comparing this to the old laws because the damages provisions set it apart.
At odds with ChinaLawBlog, Ah like it.
ChinaLawBlog: with its business target in China, is talking up the place, optimistic, at least pretend to be, to the situation: the enforcement is not that bad, the law here is as good as those in any other places, blah blah....
ChinaHerald: faced depression, sort of, more or less, as a foreign journalist (enemy of de harmonious society), grudges the infavorable situation, pointing out this is fake, that is unfair, blah blah.....
Harsh words, but no offences to both. It's good, it's good, people need both sides of view.
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