China Labour Bulletin appears in the following article. Copyright remains with the original publisher
9 November, 2007
The Chinese Government's attempts to change its labour laws continue to create controversy. China's biggest telecom equipment maker Huawei has confirmed that 7,000 local employees have resigned and then rehired on new contracts. The company denies it is exploiting a loophole in the new labour law, but it has been widely criticised for its actions. Huawei's move follows concerns by foreign investors in China that the new rules will add to their costs and favour unionism.
Presenter - Karon Snowdon Speaker - Geoffrey Crothall, On-line Editor of the China Labour Bulletin in Hong Kong
SNOWDON: The technology company Huawei's actions amount to forcing around 7000 long term workers to resign and reapply for their jobs on short term contracts.
CROTHALL: I think it's an extreme example of what's going on.
SNOWDON: Hong Kong based labour researcher Geoffrey Crothall says many companies in China have looked for ways to get around the new rules set to come into effect in January.
CROTHALL: I think it is an overreaction in terms of international labour standards. All the new law does is give China's workers the basic protection that workers all around the rest of the world take for granted.
SNOWDON: The changes are an attempt to improve the lot of China's workers and by most measures are quite modest. Written contracts are to become mandatory, improving certainty and allowing for benefits like health insurance. Probation periods are to be regulated, industry wide collective agreements with union involvement are being encouraged, health and safety improved and abusive elements of the labour hire firms stamped out. Employer groups, both local and foreign, have lobbied hard to have the provisions watered down, in some instances succeeding. Beijing has been swamped with around 200,000 thousand submissions and two years of debate since proposing the changes. One of those is a provision for short term contracts to be replaced with open-ended contracts for employees who have been with one company for ten years. It appears to have provided a loophole for Huawei. It got its workers with at least eight years service to resign and then issued new short term contracts lasting just one to three years. Huawei is a telecommunications network provider to most of the big operators around the world, and has 62,000 employees globally.
The company didn't respond to Radio Australia's offer to comment for this report. Chinese media is reporting its actions are subject to an official inquiry. I asked Geoff Crothall from The China Labour Bulletin if companies have much to fear from the new law.
GEOFF CROTHALL: As a labor rights organisation we don't really think they've got anything to fear from the changes. The provisions of the labor law are very basic rights that workers should expect to have anywhere around the world.
KAREN SNOWDON: What do you think are its most important features?
GEOFF CROTHALL: It basically says if you're employed then you have to have a written contract stating what your job is, what your terms and conditions are. So it eliminates some of the loopholes that have been commonly exploited in the past.
KAREN SNOWDON: And to your mind will it do away with some of the more extreme and probably rarer instances of shocking treatment of workers in China that we hear about from time to time, where people simply aren't paid or they are abandoned in remote areas or terrible health and safety conditions in some work places.
GEOFF CROTHALL: The law in of itself will not help. If the law is implemented properly, it will help. This has always been the key problem in China. The legislation is very good. The implementation of the legislation has been lacking and in many cases employers blatantly disregard the law. They feel they can get away with it and they do.