Chinese Law Prof Blog

Editor: Donald C. Clarke
George Washington University Law School

Wednesday, January 2, 2008

Liang Jing on China's Labor Contract Law

Here's an interesting piece on China's new Labor Contract Law by political commentator Liang Jing (a nom de plume). Translation courtesy of David Kelly.

Liang Jing, "Why does the new labor law have more failures than successes?"

A story was widely reported in the Chinese media on December 2 that the government-run All-China Federation of Trade Unions, in the face of an emerging wave of layoffs as an increasing number of employers attempted to circumvent the impending enactment of the Labor Contract Law on January 1, had recently issued a circular to safeguard employees' legitimate rights and interests, urging the resolute correction of actions such as forced resignations and re-signed labor contracts. The ACFTU's "notification" pointed that the actions employers' in violation or evasion of the labor laws "impacted negatively on building a socialist harmonious society." It required trade union organizations at all levels to "search out actions by employers that violate existing labor laws and regulations, or evade  the Labor Contract Law in violation of employees' rights, and resolutely demand their rectification. They should actively report and express their views and recommendations to local Party committees and governments, and coordinate with labor administrative agencies in seriously dealing with them. Representative cases that were evil in nature and most influential must be grasped in toto, and not tolerated." This meant that the highest levels of the CPC was carrying out a political mobilization through the government-run trade union, and launching a political offensive against employers who make good profits, and whose treatment of workers is much better than the general level.   

Have China's higher levels gone crazy? Why did they have to mobilize such a political offensive where there can be no winner? Are workers' rights really the objective of this political offensive? Those who understand the situation in China are quite clear that ringleader in destroying social harmony is none other than the authorities themselves, who in their wisdom enacted the Labor Contract Law. 

The low level of labor rights has not only become a disgrace to China, but is also an enormous threat to global economic balance and stability. However, the Communist Party rulers, who refuse to give up dictatorship, do not know how to solve the problem. What is more, the old Bolsheviks, represented by Song Ping, were foolish enough to believe that they could use the protection of labor rights to achieve the political aim of consolidating the Communist dictatorship. This tendency of Song Ping, who was Hu Jintao's mentor, was a major influence on the new labor legislation, to the extent of writing some unrealistic labor standards  into the Labor Contract Law. Triggering the massive layoffs by employers prior to the implementation of the new law, were the provisions for contracts with no fixed terms. This new requirement caused Chinese enterprise employers with the best operating conditions to be tremendously concerned, and one after another to get older workers to abandon their rights to "no fixed term contract"  at high prices before the implementation of the new law. It has been reported that one company, Huawei spent 1 billion yuan on this. Of course, not all enterprises' retrenched workers could be as fortunate in their compensation as in the case of the Huawei workers.   

Clearly, the run-up to enactment of the new labor legislation has been a lose-lose for both parties. Faced with an ever-rising tide of layoffs, China's rulers find themselves in great embarrassment. Hence they have instinctively switched on the one-party authoritarian state machinery, exerting political pressure on employers to try to check the wave of layoffs. However, the real purpose of the political offensive is not safeguarding workers' rights, but saving the authorities' face.   

While the political offensive against employers may suppress the wave of layoffs, it once again fully exposes that, rather than the rule of law, what the CPC truly believes in is politics with an iron fist. The problem is that this is able to safeguard the rights neither of employers nor of labor, because the CPC's power base is neither capitalists nor workers, but bureaucrats.   

Both the newly promulgated Labor Contract Law and the forthcoming Labor Dispute Handling Law inevitably have more failures than successes, causing much trouble for Hu's "harmonious society." The fundamental reason for this is not that unrealistic labor standards are formulated, but that the new legislation fails to grant Chinese citizens more autonomous rights, and in particular fails to allow workers to organize themselves to struggle for their own rights and interests.   

While the Chinese authorities now say the new labor law is being misinterpreted, it is in fact quite clear to everyone apart from a few self-deluding leaders that the losers are the employers, while the winners are not the workers, but labor officials who have won more power. With the new labor laws, having devoured the accused they can polish off the plaintiff, and in the game of "maintaining fairness" in cutting the cake, carve themselves a bigger slice.

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"The CPC's power base is neither capitalists nor workers, but bureaucrats."

Professor, what are your thoughts on this statement?

Posted by: E.D. | Jan 6, 2008 10:09:01 AM

Do we know where Liang Jing's piece was published? Thanks, Lucille

ANSWER: No - sorry. (DCC)

Posted by: Lucille Barale | Jan 7, 2008 4:03:26 PM

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