International Law

What?s New on the Labor Front

By Stan

If you are a foreign company mulling over a series of layoffs, be very careful. The government is not going to be too happy about that, although in most places, they will not outright deny your ability to order layoffs.

Here’s the latest, which is not so much news (from a substantive point of view), but it is instructive in telling us what the government is really concerned about these days:

China today issued new rules for employers to contain potential mass job sackings and said creating jobs should be considered an even higher priority in setting economic policies.

Employers across the country must give 30 days notice to work unions or all employees if they are going to slash more than 20 workers or over 10 percent of the total workforce, the State Council said in a notice posted on its Website today.

They must also submit a dismissal plan to local social security authorities before any layoffs, the notice said, which was dated February 3.

However, the notice didn’t say whether employers would be punished for disobeying the rules.

Supervision of labor should be stepped up to prevent workers from not getting paid and the sudden shutdown of factories, it said.

Officials should "properly handle" disputes triggered by angry, laid-off workers and their rights should be asserted, the notice emphasized.

Officials will be evaluated on their performance in creating jobs and controlling unemployment, it said.

The notice, the latest step to curb rising jobless rates amid the global economic downturn, also said the government should take a bigger role in capping jobless situations and pushing projects to boost employment.

Expanding employment should be the key priority in consideration of any major economic adjustments and industry projects, according to the notice.

Government investment must focus on projects that are likely to generate the most jobs, and project proposals must specify employment projections, it added.

The global economic slowdown started to take affect China late last year as the country’s gross domestic product dropped to 6.8 percent in the fourth quarter. The full-year figure slowed to 9 percent, the lowest since 2002.

Exports dropped 2.8 percent in December, following a 2.2 percent decrease in November, the first such decline in seven years.

Many factories in export-driven southern China have closed, raising concern that social stability in rural areas will deteriorate as unemployed migrant workers lack the income to support their families.

About 20 million migrant workers – 15 percent of the nation’s migrant labor pool – have already lost their jobs, Chen Xiwen, director of the Office of the Central Rural Work Leading Group, said earlier this month.

The prospect of the country’s job market looks even worse given that about 6 million college students will graduate later this year.

For a comparative perspective, the big labor news in the U.S. (besides spiking unemployment) is that Obama is actually trying to appoint someone as Secretary of Labor who has {gasp!} ties to organized labor/unions. The Republicans somehow believe that this disqualifies someone for that position, to which I say that the U.S. certainly is a wacky place these days.

Full post as published by China Hearsay on February 11, 2009 (boomark / email).