China’s far-reaching reform of individual employment law has now been passed by the People’s Congress in the form of the Employment Contract Law, effective 1 January 2008. The new law aims to formalise contractual relations and reinforce stability of employment by strengthening the existing legal requirement for written contracts of employment; shortening the maximum lengths of probationary periods for new employees; and restricting the use of successive fixed-term contracts. 

The law also introduces stronger rights for employee consultation and union negotiation with enterprise management over the revision of company rules, and requires that the rules be widely publicised. On the subject of dismissal, while the new law creates two new permitted grounds for summary dismissal, and new grounds for collective dismissals, and restricts termination payments, it also entitles a dismissed employee to claim the remedy of reinstatement or, in its place, double compensation for dismissal.  Among a number of other amendments the rules on secondment of employees are tightened up, and the new law decreases maximum part-time working hours.

The new law seems set to entrench the role of the state-affiliated All-China Federation of Trade Unions (ACFTU). As well as allowing workers to negotiate collective agreements through the ACFTU where it is organised, it also requires negotiation of agreements with employers under the 'guidance' of the ACFTU in private sector enterprises where the ACFTU is less strong. According to the China Labour Bulletin "This represents a significant climb down from provisions in the second draft of the new law which allowed workers representatives to independently negotiate with management."

www.china-labour.org.hk