Four in five private enterprises in China have not signed job contracts with their employees that's the startling result of a survey by the country's top legislators.

"The legal rights of employees were frequently violated in more than 80 per cent of private companies, specially in real estate, light industry, clothing and catering," He Luli, vice-chairwoman of the Standing Committee of the National People's Congress (NPC), said yesterday at the ongoing session.

According to the Labour Law that came into effect in 1995, a contract between employer and employee is mandatory. Administrative labour departments are authorized to force dithering employers to sign contracts with employees if the delay is intentional.

The lack of contracts leaves workers in a legal limbo: they cannot seek termination benefits should they be asked to leave; they have no right to medical treatment even in case of a workplace accident; and employers do not contribute their share to the pension fund.

But the tight employment market has forced job seekers to take up whatever work is available; and requirements in the Labour Law for written contracts, timely payment and compensation are often ignored in practice.

The number of unemployed urban Chinese is set to hit 17 million next year before coming down in the next five years, a top economic planner said recently.

Considering a pool of 150 million surplus workers in the countryside, the job market in China is "complicated and grave," said Du Ying, vice-minister of the National Development and Reform Commission, last month.

The NPC Standing Committee inspected the implementation of the Labour Law in seven provinces and municipalities and surveyed 2,255 companies in the past few months.

Although it is not known if foreign companies were part of the survey, overseas-funded clothing enterprises, for example, last year accounted for 45.34 per cent of the total output value in the sector. There are more than 2 million private firms in China.

The legislators found that even among the fewer than 20 per cent of private companies which signed contracts with employees, the duration was mostly less than one year.

"The employers refused to sign long-term contracts to avoid legal obligations," He said.

And many contracts only prescribed the obligations of employees and the rights of employers.

"Some contracts even stated that the employer holds no responsibility for the illness or even death of its employees, even when injuries occur in the workplace," she said.

She urged the central government to adopt effective measures so that all companies are compelled to sign contracts with employees.

"As a contract is a legal and binding agreement that states the obligations and rights of employers and employees, it is of fundamental importance to safeguard the interests of labourers," she said.

The vice-chairwoman urged the implementation of a registration system when hiring employees, with the signing of a contract as a mandatory component.

In addition, legislators also found problems with salary payment and social insurance.

According to an investigation in April, 13 per cent of employees' salaries were lower than the national minimum salary and 8 per cent of employees surveyed did not receive payments on time or at all. Many private companies also refused to insure their employees.

Figures from the All-China Federation of Trade Unions show that more than 100 billion yuan (US$12.1 billion) was owed in unpaid wages to migrant labourers in China last year.

(China Daily 12/29/2005 page1)