Written on August 22, 2010 by admin
Filed Under: Labor Law
Time: 9:30 (Sat.) March 08.2008
Location: a Carrefour supermarket in Beijing
Scene: More than 100 customers standing impatiently in approx. 25 queues waiting to pay. In each queue, there’s only one cashier busy collecting money. “There used to be 3 cashiers in each queue and one additional person helping with packing ! ” some people complained. “Why doesn’t Carrefour hire more staff?” someone questioned. Each one has to wait averagely 30 minutes before they could pay for what they bought.
Such scene and criticism is not unusual these days.
With reports emerging of mass layoffs preceding its implementation, and factory closures or relocations to cheaper jurisdictions afterwards, the newly-effective Labour Contract Law has drawn criticism from both large employers, who complain that it adds unreasonable costs, and from employees, who are disappointed that the Law does not offer as many benefits for them as compared to the original draft. Employers are becoming very cautious to increase new staff.
These impacts are especially evident in labour-intensive manufacturers. There are many reports since end 2007 and early 2008 that Hong Kong, Taiwan and South Korea invested manufactures in China are closing its factories in China due to the increase of manpower cost.
Not only Asian investors having such concerns, Olympus Corp. and Yue Yuen Industrial (Holdings) Ltd., the largest branded athletic and casual footwear manufacturer who produce OEM for major international brand names such as Nike, adidas, Reebok etc. has decided to gradually relocate its manufacture to Vietnam in order to reduce cost.
China’s largest telecommunication manufacturer Huawei has pushed the disputes about China new Labour Contract Law to the peak. Starting from Sept. 2007, Huawei has persuaded 7000 staff who has been working more than 8 years with Huawei to resign. Huawei afterwards re-hired all these staff and signed new agreement. This action is to avoid the term in the new Labour Contract Law: –
1. “If the employee has been working for the employer for a consecutive period of not less than 10 years, an open-ended employment contract shall be concluded, unless the employee requests the conclusion of a fixed-term employment contract.”
2. “prior to the renewal, a fixed-term employment contract was concluded on two consecutive occasions, an open-ended employment contract shall be concluded.”
This resign-rehire action has cost Huawei more than USD14 million. But the huge cost and criticisms from media and Chinese government have not stopped Huawei from implementing it.
Starting from end 2007, Century Dragon and our strategic partner Beijing Limin Law Firm have been busy with revising employment contract and providing consulting and training on the new Labour Contract Law for our customers. Every employer is becoming very cautious and nervous when hiring new staff and signing agreement. Many of our customers have stopped their recruitment plan this year.
This article is not to criticize the new Labour Contract Law, but we believe it deserves time and efforts to evaluate the effect of the new law. If you are seeking for legal advice on the employment no matter you are employer or employee, we welcome you to contact with our lawyer.
Sino-Link Consulting is a comprehensive consulting firm based in Beijing, aiming at providing the full spectrum of international business and legal consulting services for clients interested in manufacturing, investing, or opening an office or factories in China. The One-Stop services provided by Sino-Link are recognized as convenient, efficient, and effective.
Written on August 22, 2010 by admin
Filed Under: Labor Law
EMPLOYMENT LAW INDIA
The object of the employment laws in India is social welfare legislation protecting the employees, protecting their contentment and regulates situation of crisis. India adopted the the core labour standards of ILO for welfare of workers and to protect their interests. India has enacted a number of labour laws addressing various issues such as resolution of industrial disputes, working conditions, labour compensation, insurance, child labour, equal remuneration etc. Labour is a subject in the concurrent list of the Indian Constitution and is therefore in the jurisdiction of both central and state governments. Both central and state governments have enacted laws on labour issues. Central laws grant powers to officers under central government in some cases and to the officers of the state governments in some cases. The labour laws cast upon the employer certain obligations for meticulous, impeccable and timely compliance. A minor violation or an inadvertent delay in complying with the statutory requirements, not only result in levy of damages but also prosecutions that too, of the top executives.Workmen’s Compensation Act 1923
This Act is the earliest national legislation to provide the compensation to certain classes of workmen by their employers for injury which may be suffered by the workmen as a result of an accident during the course of employment. The general principle is that a workman who suffers injury in course of his employment should be entitled to compensation and in case of fatal injury his dependants should be compensated. Minimum Wages Act 1948
The Act prescribes minimum wages for all employees in all establishments or working at home in certain employments specified in the schedule of the Act. Central and State Governments revise minimum wages specified in the schedule. Payment of Wages Act 1936
The Act regulates issues relating to time limits within which wages shall be distributed to employees and that no deductions other than those authorized by the law are made by the employers. Industrial Disputes Act 1947
Employees Provident Fund and Miscellaneous Provisions Act 1952This Act provides for the institution of provident funds, employees pension funds and deposit linked insurance fund for employees in factories and other establishment. Its main purpose to ensure the financial security of the employees in an establishment by providing for a system of compulsory savings. There is a provision for establishments of a contributory Provident Fund in which employees’ contribution shall be at least equal to the contribution payable by the employer. Payment of Bonus Act 1965
The Act applies to any establishment / business in which twenty or more persons are employed on any day during an accounting year. It provides for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity. The minimum bonus, which an employer is required to pay even if he suffers losses during the accounting year is 8.33% of the salary. Payment of Gratuity Act 1972
The Act provides for a provision for the payment of gratuity to all employees in all establishments employing ten or more employees to all types of workers. Gratuity is payable to an employee on his retirement/resignation.Maternity Benefit Act 1961
The Act provides the certain benefits to the women in certain establishments for a prescribed period before and after child birth. The Act does not apply to any factory or other establishment to which the Employees State Insurance Act 1948 is applicable. Every women employee who has actually worked in an establishment for a period of at least 80 days during the 12 months immediately proceeding the date of her expected delivery, is entitled to receive maternity benefits i.e. medical bonus, maternity leave, nursing breaks under the Act. Industrial Employment (Standing orders) Act 1946
The Act requires employers in industrial establishments to clearly define the conditions of employment by issuing standing orders duly certified. Model standing orders issued under the Act deal with classification of workmen, holidays, shifts, payment of wages, leaves, termination etc.The Apprentices Act, 1961
It regulates the needs of trained craftsmen for industry by utilizing the training facility available in the industry so as to supplement the availability of trained technical personnel. It is statutory obligation of every establishment to train a number of apprentices according to ratio of the trade in their establishment.
The Bonded Labour System (Abolition) Act, 1976
The Act seeks to provide for the abolition of bonded labour system with a view to preventing economic and physical exploitation of the weaker section.
The Child Labour (Prohibition and Regulation) Act, 1986
The Act is a social welfare legislation aiming to prohibit the engagement of children in certain employments and to regulate the conditions of the children in certain other employment. A child means a person who has not completed his fourteenth year of age.
The Collection of Statistics Act, 1953
The Act empowers the state to effect the collection of statistics of certain kinds relating to industry, trade and commerce.
The Contract Labour (Regulation & Abolition) Act, 1970
The Act was passed to aid of workers who are employed through contractors and who have no direct link with industry for which work is done. The Act regulates the employment of contract labour in certain establishments and prohibits such employment in certain circumstances.
The Dangerous Machine (Regulation) Act, 1983
The Act is to provide for regulation of trade and commerce in, and production, supply, distribution of the product producing dangerous machines with a view to securing the welfare of labour, operating such machines.
The Indian Dock Labouers Act, 1934
The Act was passed to give effect to the convention concerning the protection against accidents of workers while loading and unloading of ships.
The Emigration Act, 1983
The Act is designed to restrict and control the emigration of skilled and unskilled workers recruited for work beyond the limits of India. It apply to citizens of India and outside.
The Equal Remuneration Act, 1976
The Act provides for payment of equal remuneration to men and women workers and for the prevention of discrimination on the ground of sex.
The Factories Act, 1948
The Act provides that employees should work in healthy and sanitary conditions so far as the manufacturing process will allow and that precaution to be taken care for their safety and for the preventions of accidents.
The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
The Act applies to every establishment in which five or more inter state migrant workmen are employed. It further provides for the registration of the principal employer.
The Mines Act, 1952
The Act seeks to regulate the working conditions in mines by providing for measures to be taken for the safety of workers employed therein and certain amenities for them.
The Minimum Wages Act, 1948
The Act has been enacted to ensure that the employer pays minimum wages to the employees as fixed or revised by the appropriate government.
The Motor Transport Workers Act, 1961
The Act deals with the matters like medical facilities, welfare facilities, hours of work, spread over, rest period, overtime, annual leave with pay etc.
The Working Journalists and other Newspaper Employees (Condition of Service) and Miscellaneous Provisions Act, 1955
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