The "House of Flying Daggers" in Enterprise Employment

Since the implementation of the "Labor Contract Law of the People's Republic of China" in 1995, fundamental changes have taken place in China's labor employment system. It has developed into an employment model that is regulated by the labor market under the market economic system and that both labor and capital can freely choose; besides the original state-owned enterprises and collective enterprises, private enterprises and foreign-funded enterprises have also developed rapidly, and the number of employees has continued to increase; some new employment models such as Labor dispatch, part-time workers, and second jobs are also emerging. At the same time, labor and employment disputes are also increasing year by year. In 2004 alone, labor departments accepted 240,000 labor arbitration cases. The new employment situation urgently needs new legal norms to adjust.

In October 2004, the draft "Labor Contract Law of the People's Republic of China" began to solicit comments.

On February 18, 2005, the Standing Committee of the National People's Congress announced that the "Labor Contract Law of the People's Republic of China" was included in the 2005 legislative plan, and the State Council submitted the draft to the Standing Committee for deliberation.

On October 28, 2005, the State Council executive meeting discussed and approved in principle the "Labor Contract Law of the People's Republic of China (Draft)".

On December 24, 2005, the "Labor Contract Law of the People's Republic of China (Draft)" was submitted to the 19th meeting of the Standing Committee of the 10th National People's Congress for deliberation.

The most important labor laws and regulations in the past ten years have been announced...

The labor law experts of "China STAFF" magazine, according to the draft "Labor Contract Law" under review, remind the majority of human resource managers to pay attention to the following changes in laws and regulations:

Interpretation 1: Enterprises must sign written contracts for employment, and contract changes must be in writing

Some enterprises are often reluctant to sign labor contracts. Rights and obligations are difficult to determine. The "Labor Law" stipulates that enterprises must sign written contracts for employment. The "Labor Contract Law (Draft)" once again stipulates that enterprises must sign written contracts for employment, and further stipulates that contract changes must also be in writing. Because the term of a labor contract may be three years and five years, ten or eight years, or even a contract with no fixed term, the employee's job position, position, and income may change during this period. In this regard, the draft stipulates that any time Changes must be in writing. In this way, if it wants to adjust the employee's job position or make other changes during the performance of the labor contract, the enterprise must make the change in the form of written confirmation based on consensus with the employee.

Interpretation 2: If an enterprise does not sign a labor contract, it will be treated as an open-ended contract.

In order to solve the problem that enterprises are unwilling to sign a labor contract, the draft protects the factual labor relationship formed by not signing a labor contract, and further stipulates that those who do not sign a labor contract are treated as an open-ended contract. In this way, whether the company intentionally fails to sign the labor contract or fails to sign the labor contract in time due to negligence, once a dispute occurs, it will be considered that there is an indefinite contract between the company and the employee. The draft attempts to force enterprises to standardize labor contract management.

Interpretation 3: Whether a labor relationship is established between an enterprise and an individual is subject to personal understanding

Labor regulations regulate the labor relationship between the company and its employees, and protect the interests of the workers who form a labor relationship with the company , workers who have not formed a labor relationship with the enterprise shall not be protected. In real life, there are often disputes between units and individuals on whether there is a labor relationship between the two parties, and such disputes are often not proved by credible evidence such as contracts. For such issues, the draft regulations are based on the understanding that is beneficial to workers. In this way, unless the enterprise has solid evidence to prove it, if the individual believes that there is a labor relationship with the unit, the dispute handling department can confirm that there is a labor relationship, and the individual believes that there is no labor relationship, and can confirm that there is no labor relationship.

Interpretation 4: The rules and regulations of the enterprise must be approved by the trade union and the workers' congress

The rules and regulations of the enterprise are closely related to the workers. . In this regard, the draft stipulates that if the rules and regulations involve the vital interests of workers, they must be discussed and approved by the trade union, the workers' meeting or the workers' congress. The trade union and the workers' congress shall formulate their own plans, and whether the enterprise agrees or opposes the plan of the trade union and the workers' congress, it shall be implemented in accordance with the plan of the trade union and the workers' congress.

Interpretation 5: The employee enjoys the special treatment provided by the company, such as housing and cars, and is still allowed to leave freely and cannot agree on liquidated damages.

The labor contract has a clear labor contract term, and the enterprise formulates the employee's use plan and career plan according to the contract term. In order to prevent employees from switching jobs and causing losses to the company, companies often stipulate in labor contracts that employees who resign early need to pay liquidated damages, sometimes even astronomically high liquidated damages. Recognizing the harm of abusing liquidated damages, the local legislation of some provinces and cities has imposed certain restrictions on the use of liquidated damages. For example, it is stipulated that only if the enterprise provides employees with special welfare benefits such as investment recruitment, investment training, etc., enterprises can Employees agree on liquidated damages. The draft further restricts the use of liquidated damages, stipulating that companies can only agree liquidated damages with employees if they provide employees with professional and technical training for more than 6 months off-the-job. According to this regulation, even if the company provides generous special benefits such as car housing, etc., employees can still leave their jobs freely without paying liquidated damages.

Interpretation 6: Pay wages in full during the non-compete period

Employees will master the company's customer list, core technologies and other business secrets during work. In order to protect business secrets and prevent unfair competition caused by malicious job-hopping Employees in important confidential positions will agree that they will not be employed by competitors for a certain period of time after leaving the company. While restricting the employment of employees, the company will give employees a certain amount of economic compensation, and the amount of compensation is freely agreed by both parties. The state has not uniformly stipulated the compensation standard for non-compete. In order to prevent the agreed compensation standard from being too low, some regions have stipulated the minimum compensation standard. For example, Shenzhen stipulates that it is not less than 2/3 of the annual income, and Zhuhai stipulates that the annual compensation fee is not low. 1/2 of the total annual remuneration. If Shanghai does not agree on specific non-compete compensation standards for enterprises and individuals, it is generally determined at 20%-30% of personal income. The "Labor Contract Law (Draft)" clearly stipulates the economic compensation standard for competition restriction, and the amount shall not be less than the annual salary income of the laborer in the employer.

Interpretation 7: During the fixed-term contract period, it is not allowed to dismiss sick and incompetent employees.

The employee may be unable to go to work due to long-term illness during the work period, and may be unable to perform the job due to ability reasons. In this case, the "Labor Law" stipulates that for employees who are unable to go to work due to long-term illness, the enterprise may advance Termination of the contract; for employees who are not competent for the job, the company can terminate the contract in advance if it finds that the employee is still not competent for the job after training or adjusting the job position. The "Labor Contract Law (Draft)" has changed this provision, and the above-mentioned principles can still be dealt with for employees who have signed an indefinite-term contract, but cannot be applied to those who have signed a fixed-term contract. According to the draft regulations, employees who have signed fixed-term contracts do not have to worry about being dismissed early because of illness or incompetence, regardless of the length of the contract.

Interpretation 8: Economic compensation must be paid for the termination of the labor contract.

The fixed-term labor contract has a clear contract expiration time. If the enterprise or employee is unwilling to renew the labor contract after the expiration of the labor contract, the labor contract will be terminated immediately without any compensation to the other party. The "Labor Contract Law (Draft)" has adjusted this system. After the labor contract expires, if the enterprise is unwilling to renew the contract, regardless of whether it causes the employee to lose their job, the employee must be given economic compensation.

Interpretation 9: Enterprise layoffs must first lay off new employees and then lay off old employees.

Due to major changes in objective circumstances such as relocation and production transfer, companies sometimes have to lay off a large number of employees. Old employees who have worked for many years often become the priority targets for corporate layoffs due to higher income, poorer physical condition, and relatively outdated work skills. In order to protect the interests of old employees, the "Labor Contract Law (Draft)" stipulates that when laying off employees, enterprises should give priority to retaining employees with longer working hours, those who have signed labor contracts with a fixed term and those who have signed labor contracts with no fixed term.

Interpretation 10: The use of labor dispatch is restricted and a reserve fund is required

In recent years, labor dispatch has developed rapidly in various countries around the world, and China is no exception. Various types of enterprises use a large number of labor dispatch personnel, and large-scale labor services The number of employees dispatched by dispatch companies is as high as hundreds of thousands. The jobs of dispatched personnel include general workshop production and operation positions, as well as important senior management positions. Since the labor dispatch personnel signed labor contracts with the labor dispatch company, and the work was performed in another employer, sometimes the labor dispatch company and the employer would shirk each other's obligations to the employees, resulting in the damage to the interests of the labor dispatch personnel. In this regard, the "Labor Contract Law (Draft)" stipulates that labor dispatch companies must pay a reserve fund to the labor department at the standard of 5,000 yuan per person, and there are also certain restrictions on the dispatch period. And it is stipulated that if the legitimate rights and interests of labor dispatch personnel are damaged, the labor dispatch company and the employer need to bear joint and several liability.

These new adjustments and changes in the "Labor Contract Law (Draft)" have given workers more rights, trying to balance the strengths and weaknesses between employers and workers. The company's existing employment management model must be redesigned according to the new regulations, and all aspects of the company's human resource management system, such as personnel recruitment methods, performance management systems, personnel elimination mechanisms, and salary structure systems, must be adjusted to adapt to the new laws. surroundings.

Professor Dong Baohua, a labor law expert specially invited by "China STAFF" magazine, participated in the legislation in Shanghai, Guangzhou, Shenzhen and other places in March to discuss the latest trends and ideas for the revision of labor contract law for enterprise human resource managers. Through in-depth analysis and discussion, the human resources and legal personnel of the enterprise can understand the revision direction of the regulations as soon as possible, and make reasonable responses as soon as possible to adjust the relevant enterprise strategies. For details of the seminar, please call 0755-25942718 for consultation.

This article is an exclusive contribution of CCH China (www.cchchina.com.cn) and may not be reproduced without permission.