China approves new contract labor law
China enacted a labor law Friday meant to improve workers' rights amid complaints about unpaid wages and other abuses, and an official tried to assure wary foreign investors they will not be hurt by the new standards.
The law is the most significant change in Chinese labor law in more than a decade. Its approval followed 18 months of deliberation, public debate and complaints by activists that foreign business groups were trying to erode workers' rights. It takes effect Jan. 1.
The legislation sets standards for labor contracts, use of temporary workers, layoffs and other employment conditions in a rapidly changing economy, according to a report issued by the legislature. The text of the law was not immediately released.
''The law is meant to protect workers and their rights,'' Xin Chunying, deputy chairwoman of the legislature's law committee, said at a news conference.
Foreign business groups had expressed alarm at an early version of the law that sharply limited use of temporary workers and required approval from China's state-sanctioned unions for layoffs or firing individual workers. Companies argued that overly restrictive rules could raise the cost of business.
Later drafts dropped the requirement for union approval of layoffs, and the report Friday said only that the approved law requires a company to inform its union of planned layoffs and listen to its opinion.
But the law retains provisions limiting probationary periods and requiring severance pay for more types of workers, according to the report issued by the NPC.
''This concern of foreign investors is totally unnecessary,'' Xin told reporters.
''If there is some bias in the application of the law, it would be in favor of foreign investors because local governments have great tolerance for foreign investors in order to attract and retain investment,'' Xin said. ''Even if they (companies) violate labor law, they (officials) are still hesitant to resist them.''
The American Chamber of Commerce in China said it had not seen the final version of the law and could not comment. But its chairman, James Zimmerman, issued a statement thanking the government for taking the rare step of asking for public comment on the proposed law.
The government received more than 190,000 responses from workers and Chinese and foreign companies.
''Our members appreciate the Chinese governments openness in seeking comment from a broad range of stakeholders, including the foreign business community,'' Zimmerman said.
Labor activists criticized foreign business groups that expressed concern about earlier versions of the law, accusing them of trying to get Beijing to reduce protections for workers.
Most complaints are directed at Chinese employers or smaller companies run by foreign entrepreneurs. Major Western companies are regarded as offering the best pay and working conditions. But state media are quick to publicize accusations of misconduct against well-known American and other Western employers.
Passage of the labor law comes as the communist government is trying to update its legal and political structures to keep pace with a rapidly changing society and market-oriented economic reforms.
The labor law was first proposed in December 2005 amid complaints that employers were mistreating workers by failing to provide written contracts, withholding pay or requiring unpaid overtime.
China is in the throes of a scandal over the enslavement of nearly 1,000 children and adults who were abducted and forced to work in brick kilns. Operators beat and starved workers, often with local government protection.
The new law ''is expected to improve protection of employees' legal rights following the exposure of forced labor scandals in brick kilns in central and north China,'' the official Xinhua News Agency said.
(Published by The New York Times, June 29, 2007)