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China's New Labor Law Means Tenure For Everybody

By Dan Harris and Steve Dickinson

SFO Airport Tomokazu Sushi Restaurant 7:52 pm PST Dinner Before My Next Flight Just came across this podcast interview with CLB's own Steve Dickinson on the always superlative Danwei blog. The post is entitled, "China Businesscast: China's new labor law, everybody gets tenure" and it provides the following executive summary (which is good because my next plane takes off in twenty minutes and I have no time to listen:

The [new China labor] law was a government response to increasing public concern that employers were mistreating employees, especially in failing to pay proper wages. The Shanxi slavery scandal was a example of the sorry state of employee rights in China that brought the issue to the forefront of the public's mind. The law has several components, but the main effects are the requirement that employees have formal term contracts, and that employees can only be terminated with cause. This is the polar opposite of termination at will in the United States. After two term contracts, the employee must be given an open-ended contract. Combined with termination only with cause, it is comparable to the tenure system in American universities. Critics are calling it a return to the iron rice bowl, when companies were responsible for employees their whole lives. There has been a tremendous amount of publicity about the law, resulting in widespread general awareness, though the public's understanding is not always accurate. The media coverage seems to be driven by the inherent attractiveness of a story that affects everyone, rather than a government propaganda initiative. Companies need to beware, as ambitious [Chinese plaintiff] lawyers are actively looking to make money and a career testing the new law.

I am sure it is good stuff. For more on the new law, check out "China's New Labor Law -- It's A Huge Deal. Huge I Tell You."

Full post as published by China Law Blog on April 07, 2008 (boomark / email).