China's trade union official upholds labor contract law, denying cost rise
(Xinhua)
Updated: 2008-03-08 13:30

BEIJING -- China's senior trade union official said Saturday the Labor Contract Law will not increase the cost of law-abiding employers.

"According to our investigation, employers will see very slight increase of cost when following the law," said Zhang Mingqi, deputy president of the All-China Federation of Trade Unions (ACFTU) and member of the top political advisory body.

But those that had minimized the cost through illegal employment practice, such as refusing to pay for employees' social insurance, will now "cost much more," said Zhang at a plenary meeting of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC) currently in its first annual full session. "This is what the offenders should have paid."

The law protects not only employees but also the interests of law-abiding employers, helping form a fair play in the market economy, he said.

The Labor Contract Law, taking effect on January 1, includes new regulations such as entitling staff with more than 10 years of service at a company the right to sign contracts without specific time limits that would protect them from dismissal without cause.

Some companies complain that such items will reduce labor flow and weaken enterprise vitality.

Zhang voiced his confidence in this regard by saying that a contract without specific time limits will help employees feel more attached to their companies and do no harm to employers.

But he admitted the implementation of law is facing resistance.

"Some employers misread the law and try to steer clear of it," he said.

The Guangdong-based Huawei Technologies Co. Ltd., China's telecom network equipment giant, hit media headline for its controversial "voluntary resignation" scheme late last year.

Zhang suggested the government list the implementation of the law in its agenda and enhance the supervision from the labor departments and media.

"We also expect a detailed code on implementing the law to come out as soon as possible as well as relevant judicial explanations and government supplement regulations," he said.