GUANGZHOU: Since the new Labor Contract Law took effect on the mainland this year, the Pearl River Delta (PRD) region has seen a large increase in labor disputes among Hong Kong-invested enterprises.

Shenzhen, Dongguan and Guangzhou reported 4,347, 3,559, and 2,280 cases of such disputes, respectively.

It was an average increase of more than 100 percent compared with the same period last year, sources at the Guangdong High People's Court said.

"Of the total cases, nearly half are from Hong Kong-invested companies," said Zhu Deliang, director of the Guangdong Provincial Arbitration Office for Labor Disputes.

Zhu attributed the increase in labor disputes to the long-existing unbalanced labor-capital relations in Hong Kong-invested companies - most of which are engaged in labor-intensive manufacturing in the PRD region.

Zhu said companies used to make money by forcing employees to work overtime for little pay, "but employees have become more aware of how to protect their rights thanks to the new Labor Contract Law".

In Shenzhen, a neighbor of the special administrative region, the number of labor disputes in Hong Kong-invested companies doubled in the first quarter, Zhu said.

"Up to 90 percent of labor disputes have been settled by the arbitration office," he added. "Only a small number of cases have been handled in court."

Meanwhile, a number of Hong Kong-invested companies have closed or been relocated since the implementation of the new law.

And Zhu said those closures and moves have also resulted in disputes related to labor compensation.

By the end of the first quarter, Guangdong had 44,258 registered Hong Kong-invested companies, accounting for 65.2 percent of the province's total foreign-invested enterprises, according to figures from the Guangdong Industrial and Commercial Bureau.

Zhu said labor costs have risen by nearly 10 percent for those enterprises, many of which had illegally hired workers.

Xie Yingjian, director of the Guangzhou Arbitration Office for Labor Disputes, estimated that dispute total will continue to rise dramatically this year, primarily as a result of the Law on the Mediation and Arbitration of Labor Disputes, which took effect May 1.

Arbitration services for employees in labor disputes are provided free of charge, according to the new law, which was upgraded from the mainland's past regulation on labor-dispute arbitration, which was adopted in 1993.

(HK Edition 06/10/2008 page2)