Layoffs: Labor Pains Triggered By The New Labor Law

Two months before the formal implementation of China's labor contract law, there was a wave of corporate dissolution in some parts of the country.

Even HUAWEI, a well-known company in China's IT industry, joined in this special game. According to the company's requirements, nearly ten thousand workers who worked for nearly eight years had to go through the resignation formalities before the new year's day in 2008, and then sign a labor contract with the company for one to three years before 2008.

A law focusing on protecting the legitimate rights and interests of labourers and building a harmonious and stable labor relationship has been confronted with such embarrassment. After the national day, HUAWEI has been circulating a "N+1" plan to buy out the length of service to cope with the new labor contract law, which will be implemented next year. The service age of employees over 8 years will be bought out, the company will give compensation once and then the seniority will be cleared. Workers can choose to continue signing with the company or not.

Layoffs in the period of legal preparation have emerged

In late June, LG China had dismissed its large number of 5~10 employees, and global resources had similar actions in late August.

In August, CCTV concentrated more than 1800 temporary staff members to arouse public concern, and soon began to return the substitute teachers and let Shenzhen plunge into the whirlpool of public opinion.

A law focusing on protecting the legitimate rights and interests of labourers and building a harmonious and stable labor relationship is faced with such embarrassment before it is implemented.

Either because it is "good or evil", or because the interests side party misunderstands the law.

It has been 13 years since the implementation of the first labor law in 1995. In January 1, 2008, this law will be officially replaced by the labor contract law of the People's Republic of China.

The new law has attracted much attention. In June 29, 2007, the twenty-eighth session of the Standing Committee of the National People's Congress adopted the labor contract law with a high vote. In just a few months, many new regulations in the legal provisions attracted people's attention, as well as news events that followed.

In August, CCTV concentrated more than 1800 temporary staff members to arouse public concern, and soon began to return the substitute teachers to Shenzhen.

Misreading:

Between news events and new laws

CCTV's "layoff storm" started in the "carton box" incident.

After the Beijing TV station reported that the "paper steamed buns" message was identified as a fake news from the TV station hired by a certain director, CCTV also began to retreat "temporary workers". In less than a month, CCTV retreated more than 1800 temporary staff, and the number of layoffs accounted for 20% of the total staff of CCTV.

The "fuse" of layoffs is false news on the surface, and the deeper reason is closely related to the promulgation of the labor contract law.

In an interview with the media, the director of the personnel office of CCTV confirmed that the launch of the new labor law and the government's emphasis on false news were the reasons for the layoffs.

The concerns of CCTV are mainly due to the expansion of the scope of application of the new labor contract law.

For a long time, the relationship between institutions and their employees represented by science, education, culture and health system has not been clearly stipulated in the application of labor law adjustment and department regulation.

In the process of formulating the labor contract law, whether the employment relationship of institutions should be included in the scope of adjustment is still controversial.

This means that in 2008, CCTV will have to perform "much more" obligations in accordance with the provisions of the new law. At the same time, many of the recruits may also become real "CCTV reporters". These are reasons why CCTV has to take measures and not rain.

The dismissal of substitute teachers in Shenzhen is not only due to the change in the scope of application of the labor contract law, but also because of the provisions of the labor contract law on the non fixed term labor contract.

The fourteenth provision of the labor contract law stipulates that when a specific situation arises, the employer should sign an unfixed term labor contract between the employer and the laborer, including: the worker has worked continuously for ten years in the employing unit; if the employer implements the labor contract system for the first time, or when the country has an enterprise restructuring, the worker will continue to work in the employing unit for ten years and be less than ten years from the statutory retirement age.

These two provisions are referred to as the "double ten" regulations.

In addition, after two consecutive fixed-term labor contracts have been signed, renewal of contracts should be renewed.

In Shenzhen, there are at least 8000 substitute teachers from all over the country.

Many of them have worked in Shenzhen for many years, and most of them are excellent educational talents from the mainland. However, under the strict personnel system, to become "formal" from "temporary" is a distant dream for most people, the labor contract law, which can help most of them realize their dreams easily.

Because the relationship between non fixed term labor contracts is the legal title of "formal workers", and most of them already have the conditions prescribed by law.

Unfortunately, the good intentions of the labor contract law have become the motivations for substitute teachers.

Many substitute teachers were notified by the school to terminate the contract after the introduction of the new law.

The school's explanation is "survival of the fittest" or "pressure from above".

But the real reason is not difficult to imagine that before the implementation of the new law, the school will basically not have to shoulder any responsibility. Compared with the inevitable situation next year, the school's teaching order and interests can hardly be counted.

A law focusing on protecting the legitimate rights and interests of labourers and building a harmonious and stable labor relationship is faced with such embarrassment before it is implemented.

Either because it is "good or evil", or because the interests of the parties misreading the law.

Highlights:

Between real needs and interest games

All laws can not only reflect the interests of one group, but the result of various interests balance.

In the process of formulating the labor contract law, the Standing Committee of the National People's Congress released the draft full text to the public and solicited opinions. There were as many as 190 thousand feedback opinions from all over the place in the short term, which set a new record in the history of the NPC's legislative history.

Many of the formal provisions are derived from the masses' opinions.

But it is the new law that has increased the number of measures to protect workers, which has caused widespread concern among employers.

These protective measures, which are called "ten bright spots" by the media, include expanding the scope of application of the labor contract law, standardizing the form of labor contract formation, expanding the application of the non fixed term labor contract, limiting the application of the penalty clause, stipulate the competition restrictions, appropriately expand the application of the economic compensation, standardize the labor dispatch, standardize the part-time employment form, and increase the illegal labor cost of the employing units, etc.

Of course, in all the "bright spots", the provisions of the "double ten" provisions and the "two fixed contracts" have triggered the obvious Domino effect.

In the new law, the signing of an unfixed period contract becomes a statutory obligation. In the retiring labor law, although there are "workers who work continuously in the same employer for more than ten years, if the parties agree to renew the labor contract, if the laborer proposes a labor contract with no fixed term, it should conclude a similar labor contract with no fixed term", but the premise of "mutual consent" makes this provision has not been able to play a role.

With regard to labor dispatching and increasing penalties, the space for employers to circumvent the law has been greatly reduced.

Although the labor contract law focuses on the protection of laborers' rights and interests, legislators have fully considered the interests of employers.

For example, if the contract is converted into an unfixed period contract after signing two fixed term contracts, the laborer shall not have serious violation of the rules or regulations of the employer or serious dereliction of duty and malpractice, causing serious damage to the employer. If the laborer establishes labor relations with other employers at the same time, it will seriously affect the completion of the work task of the unit, or if the employer proposes, refuse to correct, or is unable to work, the employer can also refuse to sign the new labor contract.

With these protective measures, many enterprises have encountered the problem of "one job and one job hopping", which will also be solved.

Some enterprises have paid a high training fee, and the staff have found a new job. How to compensate for the training costs is not clear before. The new rule specifies the standard of calculation: if the worker violates the stipulations of the service period, he should pay liquidated damages to the employer according to the contract.

The amount of penalty shall not exceed the training fee provided by the employer.

The liquidated damages paid to the laborers by the employer shall not exceed the training expenses that should be apportioned in the part of the service period that has not yet been fulfilled.

After careful analysis, many provisions in the labor contract law do not only stipulate the rights of the laborers, but also give the employers a strong tool to investigate their responsibilities.