Chinese Employment Contract Law

New Chinese employment contract laws were put in place in January 2008.

New Chinese employment contract laws were put in place in January 2008 to set forth the obligations and rights of employers and to protect the rights of employees.

History

According to the All China Federation of Trade unions, prior to 2008 there were many incidences of forced labor, failure to pay wages and a lack of employment contracts in the private sector. The contract law of 2008 was intended to be an improvement of the contract law of 1994, encouraging job security for employees.

Facts

The Chinese labor law of 2008 states that employers must pay contributions towards the social security accounts of employees with minimum wage standards for employees working over time and those still within their probationary periods. In addition, any person that has been employed by a company for more than 10 years is entitled to employment contracts, which protect them from unfair dismissal.

Significance

The Peoples Republic of China was attractive to foreign manufacturing companies because of its cheap labor. It could be deduced that the new laws would put off foreign manufacturing companies due to new minimum standards. However, the intended improvement in employee relations with employers due to enhanced job security could negate the impact. Some small- to medium-sized companies have relocated to nearby Vietnam as a result of cheaper labor.

References

• China cultural industries:Labor Contract law of the Peoples Republic of China
• China law and Practice: Employment Contract law
• Pinsent Masons: Chinese employment and Contract law