The central government has vowed not to amend the Labour Contract Law to appease business leaders who claim the new legislation has increased costs and bankrupted tens of thousands of enterprises.
Speaking at a National People’s Congress press conference in Beijing, Xin Chunying, deputy head of the NPC Standing Committee’s Legislative Affairs Commission, said the factory closures over the last year had nothing to do with the Labour Contract Law, which according to a government survey had only increased business costs by two percent.
This is in line with a recent independent survey of foreign-owned businesses, which estimated that the total cost increase directly related to the new law was between two to three percent.
While such comments from a senior lawmaker are encouraging, they will not necessarily affect the reality on the ground. Local governments, which have a vested interest in maintaining economic growth and employment in their region, are undoubtedly under severe pressure from local businesses to relax enforcement of the law.
Many businesses are using the current global economic crisis as pretext to lobby for measures that would erode the minimal concessions workers have won over the last year or so. Some pro-business legislators in the NPC have even been pushing for the abolition of China’s minimum wage system (introduced in 2003), a move that met with a stern rebuff from senior All-China Federation of Trade Union officials at the NPC.
However, it is still unclear just how committed the ACFTU is to protecting workers’ rights during the economic crisis. There has been a flurry of comments from union officials on the need to accommodate businesses in difficulty, and guard against hostile forces infiltrating the ranks of migrant workers, but very little to indicate the union is willing to take a firm stand against employers who use the economic crisis as an excuse to violate workers rights.