Debate on revisions to Labour Contract Law delayed because of deluge of submissions

31 October 2012

The Standing Committee of the National People’s Congress (NPC) has postponed discussion of draft revisions to the Labour Contract Law after being inundated with more than half a million submissions during the period of public consultation over the summer.

The Economic Observer (经济观察报) reported that the NPC had received 550,000 online suggestions on the draft law, forcing it to postpone deliberation until the end of December at the earliest.

The draft is designed to address abuses of the employment agency (劳务派遣公司) system that have become endemic since the Labour Contract Law was implemented in January 2008. In an attempt to avoid signing contracts with their employees, as stipulated by the Labour Contract Law, more and more employers have  hired workers from employment agencies, in spite of provisions that restrict the use of such labour to temporary, auxiliary and substitute positions.

Agency workers are usually paid less, have fewer benefits and less job security than regular employees.

According to a survey by the All-China Federation of Trade Unions (ACFTU), the problem is most acute in large-scale state-owned enterprises involved in petro-chemicals, telecommunications and finance, where an estimated two thirds of employees are agency staff. The use of agency labour is also widespread in privately-owned manufacturers and public institutions, it said.

It seems most likely that the greatest pressure on the government to postpone discussion of the proposed revisions came from this powerful business lobby, which has openly voiced concerns about the need for flexible hiring and firing during the current economic slowdown in China and across the world.

However, the pressure from Chinese workers, non-governmental organizations and even the ACFTU for all employees within a particular enterprise to get equal pay for equal work will not disappear because of the NPC postponement; rather it is likely to intensify.

Workers are increasingly demanding better pay and social security benefits and are keenly aware of the exploitative and discriminatory nature of the employment agency system.

In CLB’s submission to the NPC in July we made eight main recommendations on the revisions needed to the Labour Contract Law:

  • Enhance and strengthen the ability of the local authorities to regulate and supervise the use of agency labour.
  • Provide a role for the trade unions in ensuring that both employers and employment agencies comply with the law.
  • Limit the number of agency workers any one enterprise can employ.
  • Ensure that all social insurance benefits are paid in full.
  • Prevent employers from using agency workers on a long-term basis.
  • Prevent employers from using agency workers to replace striking workers.
  • Prevent employers from setting up their own employment agency or changing the status of current employees into agency employees.
  • Place restrictions on the types of industry and jobs that can legitimately use agency labour.

In the final analysis, however, CLB suggests the best long-term solution to the myriad problems currently evident in the employment agency system would be for the legislature to draft a new dedicated law specifically on the regulation of employment agencies and the use of agency labour in China.

Back to Top

This website uses cookies that collect information about your computer.

Please see CLB's privacy policy to understand exactly what data is collected from our website visitors and newsletter subscribers, how it is used and how to contact us if you have any concerns over the use of your data.