China toy factory board agree to renew labor contracts

(Xinhua)
Updated: 2008-11-26 22:14

The violence had stopped by Wednesday morning.

The factory managers fled their offices on Tuesday night.

The employees claimed their employer, the Hong Kong-based Kader Holdings Co. Ltd. that produces toys for several major international brands, was trying to evade its obligations under China's labor contract law, which came into effect early this year.

The new law requires employers to sign unlimited-term contracts with employees who have worked for more than 10 years. Some employers, however, believe such contracts will be a burden.

Liu Xiyuan from the central province of Hunan, who has been working at Kaida for 21 years, said he turned down compensation equivalent to eight months' wages when his contract expired on November 19. "If I had accepted the compensation, it would have meant all my 21 years of work wouldn't count," said Liu, 45.

One employee, who refused to give his name, said he accepted 4,000 yuan in compensation for having seven years of work written off.

Kaida, which employs more than 6,500 people, terminated contracts with 380 employees on November 19. Another 216 contracts had been scheduled to be terminated on Wednesday.

Li said the protest was not a result of the global financial crisis.

"It's because the employer fails to understand the labor contract law well and lacks thoughtful consideration while making arrangements for the employees," he said.

He said the township government has set up a working team to handle the issue together with the employer and employees.

"We will strictly abide by the labor contract law and prevent further problems from arising," he added.

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