China’s new labour law is beginning to take hold, despite some business opposition, Auret van Heerden, president and chief executive of the Fair Labor Association, has concluded after an investigative visit to the country.
The law, implemented on1 January and aimed at protecting workers’ rights, demands that all employees are given written contracts.
Van Heerden, whose organization is based in Washington DC, said there was evidence the law was beginning to take effect. He added that the Chinese government cares about what the world thinks of its labour rights record but was probably persuaded to bring in the new law more by industrial discontent at home.
There were gulfs between town and country, employed and unemployed, and the domestic and export sectors, and there was abuse of workers. These factors were the cause of instability, which China could not afford, said van Heerden.
Workers’ rights and contracts brought higher wages and more benefits, and employers had to take on more people. However, van Heerden believed a more stable and productive workplace would result.
One consequence of higher costs brought in by the new legislation will be that low-cost assembly businesses will leave China, but, said van Heerden, the government is probably unconcerned as it wants to promote high-value production and prefers to see manufacturers move up the value chain.
Another outcome is that access to tribunals and other grievance procedures has led to strikes.
Some employers have become worried about these and other implications of the new law and have tried to lay off workers or outsource work. Employees have responded by going on strike.
This has happened at the huge Nine Dragons Paper company, where several hundred temporary staff called a strike over what the company characterised as ‘misunderstandings and rumours’ about possible outsourcing of jobs. The strike was resolved after the company said it would renew the contracts of any employees who wanted to continue working for the business.
