China's top trade union body has warned that the country would not kowtow to
pressure from foreign businesses to water down a new law designed to offer
greater protection to hundreds of millions of workers.
Voting on the law is expected this month.
The government received more than 200,000 public comments on the draft law,
some suggesting that foreign businesses may be inclined to shift production
elsewhere because the proposed law is "too strict", and operating costs could
However, Xie Liangmin, a senior official with the law department of the
All-China Federation of Trade Unions, said it had succeeded in safeguarding
workers' rights in the current draft.
submit to any pressure in protecting Chinese workers' rights and interests," Xie
"We welcome foreign companies that respect Chinese laws and look after their
workers. Those relying on cheap labor and making profits by violating workers'
rights will finally be ousted."
The draft law requires all employers to submit proposed workplace rules or
changes for discussion to the worker's congress - concerning pay, work
allotment, hours, insurance, safety, holidays and training.
Employers and trade unions will then jointly decide on workplace agreements.
The proposed law also stipulates trade unions have the right to sign
collective contracts with employers on behalf of workers.
It strongly discourages fixed-term contracts through various measures; and
requires that severance be paid if a fixed-term contract expires and is not
"The new law is not designed to replace the current Labor Law; rather, it
attempts to further standardize the labor contract in favor of employees," Xie
"It will provide a more solid legal ground for trade unions to protect
workers' rights or to settle labor disputes."
Both the European Union Chamber of Commerce in China and the American Chamber
of Commerce in Shanghai made submissions to the National People's Congress,
China's legislature, on the proposed changes to the labor law.
In a position paper released in April this year, AmCham Shanghai said it had
never lobbied against the draft law, adding: "Most of the provisions in the
proposed law merely restate existing law. The problem is, therefore, not a lack
of laws, but the enforcement of existing requirements."
Last December, the European Union Chamber of Commerce in China said it
applauded moves to improve labor conditions, but was concerned that "current
levels of compliance and implementation of existing legislation are inadequate".
However, in a letter to the NPC last year, Serge Janssens de Varebeke -
then-president of the European Union chamber - warned the "strict" regulations
could force foreign companies to "reconsider new investments or continuing their
activities in China" because of possible increase in production costs.
The International Labor Organization office in Beijing, which provided
technical advice on some of the draft's provisions, said it "doubted the truth
of any such threats", and did not consider the draft law "overly protectionist".
"We would doubt that the law in its current form would warrant such drastic
action as many other countries have similar provisions," Constance Thomas,
director of the International Labor Office for China and Mongolia, said.
"China will remain an attractive place to invest and workers will be better
protected from labor exploitation."
She stressed the need for education about the law, and that it should be
properly put into practice through "encouragement" and "enforcement".
Zhu Bin, another official with the All-China Federation of Trade Unions, said
Change to Win, one of two major national trade union organizations in the US,
last month expressed its full support for Chinese trade unions' stand on
protecting workers' rights.