NEW DRAFT CONTRACT in DONGGUAN: Serious problems emerge
In October, the Dongguan City Labour Department released a draft of a new standard labour contract. IHLO has translated the draft here and extracted relevant clauses below. It is believed – as with most other contracts being prepared that the main drafter is the Labour department and it is not clear how much negotiation or input there has been from the ACFTU. Certainly the new draft contract in Dongguan raises some very worrying legal and ethical issues which call into question the significance of the new law to actually change working conditions and improve labour rights in any meaningful way.
Industrial Action = Criminal Behaviour: Dismissing striking workers
Firstly the new Contract states that
Clause 26: Under the following situations, either party can terminate the contract: (i) Party B (the employee) does not satisfy the employment requirements or Party B refuses to work (3 days in advance and offer any explanation); (ii) Party B is sentenced to imprisonment, sent to re-education through labour, and has serious problems of corruption, theft, gambling, fighting, swindling, strike and slowdown or bad behaviour, or failing to work causing massive economic loss to Party A (the employee) and repeatedly breaching labour discipline, or being dismissed for breaching factory rules and regulations after repeated warnings”
This is a much larger definition of the terms for immediate (and without compensation) termination than the New Contract law gives and indeed than the existing legislation gives.
Article 25 of the current Labour Law states:
The employing unit may revoke the labour contract with a labourer in any of the following circumstances:
to be proved not up to the requirements for recruitment during the probation period;
to seriously violate labour disciplines or the rules and regulations of the employing units;
to cause great losses to the employing unit due to serious dereliction of duty or engagement in malpractice for selfish ends; and
to be investigated for criminal responsibilities in accordance with the law.
The current laws cover go-slows which under current trade union law are allowed:
Article 27 In case of work-stoppage or slow-down strike in an enterprise or institution, the trade union shall, on behalf of the workers and staff members, hold consultation with the enterprise or institution or the parties concerned, present the opinions and demands of the workers and staff members, and put forth proposals for solutions. With respect to the reasonable demands made by the workers and staff members, the enterprise or institution shall try to satisfy them. The trade union shall assist the enterprise or institution in properly dealing with the matter so as to help restore the normal order of production and other work as soon as possible.
The new Contract law states:
Article 39 Where an employee is under any of the following circumstances, the employer may dissolve the employment contract:
1. It is proved that he does not meet the recruitment conditions during the probation period;
2. He seriously violates the rules of the employer;
3. He causes any severe damage to the employer because he seriously neglects his duties or seeks private benefits;
4. He simultaneously establishes an employment relationship with other employers and may seriously affect his completion of the tasks of this entity, or he refuses to make a correction though the employer has pointed it out;
5. The employment contract is invalidated due to the circumstance as mentioned in Item (1), paragraph 1, Article 26 of this Law; and
6. He is subject to criminal liabilities in accordance with the law.
Thus the new contract goes against current legislation and appears to place industrial action in the same category as criminal behaviour. This is not a positive move but a regressive clause which could have very serious repercussions for the growing labour rights awareness in Dongguan. At the same time it fails to define adequately the meaning of “bad behaviour” leaving the employee a great deal of flexibility in interpretation. The current law also does not specify personal issues like gambling as a cause for dismissal.
As with many places in China, but especially in the Pearl River Delta there has been a yearly increase in the number of strikes and go-slows and other forms of industrial action. Generally this is one of the few means the workers have to ask that employees sit down at the table with them to bargain. The clause would likely be used widely by employees (and possibly with this intention by the labour bureaus) to allow them to fire with absolute impunity any worker found to have engaged in a strike or other form of industrial action. Currently other similarly vague clauses in existing law can also be used but this appears to make it much more open.
Workers required to give reasons for leaving employment
The new Dongguan Contract also states the circumstances when the employee can terminate the contract (giving 30 days notice). These reasons include marriage and illness.
Article 27:
Party B (employee) may resign when: (1) Party B is going to marriage or take care the family; (2) Party B prefer resign after the set period of medical care for an illness or non-work related injury; (3) any other reasons, according to law, regulation and Party A’s code, allowing Party B resign prior to contract expire.
However the actual New Labour Contract Law does not require employees to give any reason to resign if the workers give 30 days notice.
Instead the new law actually states;
Article 37: An employee may dissolve the employment contract if he notifies in writing the employer 30 days in advance. During the probation period, an employee may dissolve the employment contract if it notifies the employer 3 days in advance.
Thus the new Dongguan contract appears to make the employee submit valid reasons such as marriage or illness in order to terminate a contract. The exact meaning of section 3; " (3) any other reasons, according to law, regulation and Party A’s code, allowing Party B resign prior to contract expire" is unclear but it could be interpreted as giving the employer sufficient grounds to refuse to allow a written notice of 30 days.
Once again this is a retrogressive step and could increase the hold over he employee by the employer as opposed to allowing the employee to have equal rights and protection in developing and choosing their contractual engagements which the new law is designed to do. It remains to be seen as to have this clause will be interpreted however.
Protection from unsafe work
According to the new Labour Contract Law article 42, an employer cannot terminate a contract in a set of stipulated circumstances which include pregnancy, occupation illness etc. The new Law states clearly that an employee cannot be terminated if they are engaged in “operations exposing him to occupational disease hazards and has not undergone a occupational health check-up before he leaves his post”…..While the Dongguan contract essentially covers most of the list of prohibited situations for termination it fails to include this very crucial circumstance.
Many workers are engaged in work which, due to either the nature of the work or (perhaps more widespread) the failure of the employer to install adequate OSH safeguards and the majority do not obtain health check son departure. This leads to the type of scenario that many workers affected by occupational disease find themselves in. They leave their factory and later find themselves ill and then have little legal or practical means to obtain compensation form their previous employer as they have no current contractual relationship and the employer denies liability. This is the case which workers affected by Silicosis and cadmium poisoning for example find themselves in and one of the main reasons why their struggle for compensation has been such a long campaign. [See for example the case of the Gold peak workers and Gemstone workers]
The New Contract law states;
Article 42. An employer shall not dissolve the employment contract under Articles 40 and 41 of this Law if an employee:
1. is engaging in operations exposing him to occupational disease hazards and has not undergone an occupational health check-up before he leaves his post, or is suspected of having an occupational disease and is being diagnosed or under medical observation;
2. has been confirmed as having lost or partially lost his capacity to work due to an occupational disease or a work-related injury during his employment with the employer;
3. has contracted an illness or sustained a non-work-related injury, and the prescribed period of medical treatment therefore has not expired;
4. is a female employee in her pregnancy, confinement or nursing period;
5. has been working for the employer continuously for not less than 15 years and is less than 5 years away from his legal retirement age;
(6) finds himself in other circumstances as prescribed in laws or administrative regulations
Whereas the Dongguan contract states;
30. Party A cannot terminate this contract under one of the following situations (except for the dismissals due to serious illegal behaviours):
(i) Party B suffers from occupational illness or occupational injuries and it is within the period of medical treatment;
(ii) Party B suffers from occupational illness or occupational injuries and the labour appraisal committee has confirmed that he/she has lost or partly lost the ability to work and he/she does not ask to terminate this contract;
(iii) Party B suffers from illness or non-work-related injuries within the stipulated period of medical treatment or that he/she still needs to stay in the hospital for medical treatment although the period of medical treatment has been expired;
(iv) female staff member in her pre-labour period, maternity leave and lactation period;
(v) Party B is having public holidays, various leaves and compensation leaves;
(vi) Party B has worked in the employment unit for 15 years and there are fewer than 5 years from his/her retirement;
(vii) other situations according to laws and regulations.
IHLO [with thanks to TF]
December 2007
____________________________________________________________________________________________________________________________________
Dongguan City Labour Bureau
Letter No. 3 of 2007 Labour Relations Department, Dongguan City Labour Bureau
Request for Opinions on “Dongguan City Labour Contract (Draft)”
16 October 2007
To: City Foreign Enterprise Association
City Taiwanese Enterprises Association
City Individual Retailers Association
According to the “PRC Labour Contract Law” and the “Regulation on Labour Contract Management in Guangdong Province”, the City Labour Bureau has drafted the “Dongguan City Labour Contract (Draft)” which will be implemented in 2008. See the text in the attachment.
We are now seeking your comments and recommendations on the “Dongguan City Labour Contract (Draft)”. Please send us your comments and recommendations before 25 October.
Contact person: Luo Shaowei
Contact number: 22203613, (Fax) 22203621, 22203613
Encl.: “Dongguan City Labour Contract (Draft)” Labour Relations Department, Dongguan City Labour Bureau
Issued by the Labour Relations Department, Dongguan City Labour Bureau on 17 October 2007 |
Encl.: “Dongguan City Labour Contract (Draft)”
Code:
Dongguan City Labour Contract
Published by the Dongguan City Labour Bureau, Guangdong Province
Contract Manual
- When the employment unit (Party A) decides to employ the worker (Party B), it is necessary to sign this contract to ensure the labour rights and obligations of both parties. If Party B orally agrees to be employed but is not willing to sign this contract, Party A should disagree to the employment. If Party B agrees to sign the contract but Party A does not sign this contract after hiring Party B for more than 30 days and causes damage to Party B, Party A should be responsible for the compensation.
- Both parties should seriously read this contract before signing it. Once having signed this contract, both parties should strictly implement the terms of this contract.
- This contract might be personally signed or stamped by the legal representative (or trustee) of Party A and Party B, with effect only together with the employment unit’s stamp (or the stamp specially used for labour contract).
- The blanks in this contract are to be filled out after the negotiation between both parties that should not breach any laws, regulations and relevant rules. Place the non-applicable blanks with “/”.
- The working hour system is divided into three categories, namely fixed-time working, irregular working hours, integrated working hours. It should obtain the approval from the labour security departments if it adopts irregular working hours and integrated working hours.
- Other terms which are not included in this contract can be added as an agreement to be signed by both parties and as an attachment to this contract, to be implemented with this contract.
- This contract must be seriously filled out with clear handwriting and concise and accurate wordings. It should not be arbitrarily amended.
- After signing this contract (together with the attachment), both Party A and Party B should each keep a copy for future reference.
Party A（Employment Unit）： Party B（Staff）：
Name： Name：
Legal Representative： Identity Card Number：
Address： Current residential address：
Type of business：
Contact Number： Contact Number：
According to the “Labour Law of People’s Republic of China”, “Labour Contract Law of the People’s Republic of China” and relevant national and provincial regulations, and by abiding to the law and the principles of fairness, equality, voluntariness, unanimous negotiation and honesty, we endorse this contract.
- Length of the contract
1. Both Party A and Party B agree to set the length of the contract of Party B with the following ( ) way:
- Fixed time limit: from (Date)____(Month)____(Year)20___ until (Date)___(Month)____(Year)20__.
- Non-fixed time limit: from (Date)___(Month)____(Year)20__ to the legal termination of this contract.
- Time limit for completion of work project: from (Date)___(Month)____(Year)20___until the completion of the work project.
- Both Party A and Party B agree to set the probation period (which is included in the period of the contract) according to the following (No. ) way:
- No probation period.
- Probation period from (Date)____(Month)____(Year)20___until (Date)____(Month)____(Year)20___.
The probation period shall not exceed 6 months. If the contract period is between 3 months and 1 year, the probation period shall not exceed 30 days. If the contract period is between 1 and 3 years, the probation period shall not exceed 60 days. If the contract period is over 3 years or of non-fixed time limit, the probation period shall not exceed 6 months.
- Working place and work content
- Party B follows the working arrangement of Party A to work in the Position_____ in the Department of _______of the Community (Village) Factory Area (Company, Shop)_____at______Street (District)___________Town_____________City.
- The job duties of Party B are__________________________________________________________________________________________; and both Party A and Party B confirm in accordance with the following (No. ) that:
- Party B’s working position does not belong to the working positions that require safety, health and special occupational protection as stipulated by national regulations.
- Party B’s working position belongs to the working positions that require safety, health and special occupational safety as stipulated by national regulations; and that position may cause damage to Party B’s body or health mainly due to ________________________________________.
Party A shall provide training and preventive measures on safety, health and prevention of occupational disease according to the relevant safety requirements concerning special working positions and types of work.
- If Party A needs to temporarily move Party B’s working positions (within 3 months) because of working requirements, Party B shall follow. If Party A needs to readjust Party B’s working position or send Party B to work in an external unit (for three months or above), both parties shall unanimously negotiate to sign a supplementary agreement and the agreement shall be attached with this contract.
- Working time and leave
- Both Party A and Party B agree to the normal working time of Party B in accordance with the following ( ) way:
- Standard working time schemes, i.e. ____hours per day, ______days per week, at least one day leave each week.
- Irregular working time scheme, i.e. with the approval of the labour department, Party B completes his/her duties in his/her position in a certain period of time, but it does not mean overtime.
- Integrated working time scheme, i.e. with the approval of the labour department, Party A sets the period of working time of Party B in his/her position by_____(week(s), month(s), quarter(s), year(s)) in accordance with the national regulations.
- When implementing standard working time scheme and integrated working time scheme, if it is due to the need of production, Party A can arrange overtime work for Party B in accordance with the relevant national regulations by negotiating with the employment unit’s trade union or Party B.
- In accordance with the provincial regulations on leave, Party A shall arrange suitable paid leaves, including public holidays, annual leave, marriage leave, maternity leave, sick leave and funeral leave.
- Remuneration
- Party A shall implement Dongguan City’s minimum wage requirements to pay Party B’s wages according to the following (No. ) ( )way:
- Probation period: RMB________ per month during the probation period.
- Time rate pay: standard pay of the position is RMB______ per hour. It is calculated in this way for Party B’s monthly salary.
- Piece rate pay: according to the announced piece rate system in the employment unit, Party A decides the piece rate pay for Party B and calculates Party B’s monthly salary.
- Wage of irregular working time or fixed wage: RMB______ per month.
- According to the employment unit’s economic situation, wage system and the result of collective wage negotiation, Party A shall adjust Party B’s salary accordingly.
- Party B shall pay the salary RMB _________(current /previous month) on ___(day) each month. If the salary day is a public holiday or leave, it shall be paid on the latest working day.
- Social Security
- Within the contract period, both Party A and Party B shall implement the regulations of the local social security department and join the legally required social security programs and pay the premiums in accordance with the required ratios.
- If Party B is sick or is injured due to his/her work, or Party B is sick or dies due to his/her work, he/she shall be entitled to the relevant social security compensation.
- If Party B is injured or die due to his/her work, Party A shall give occupational injury compensation or occupational death compensation in accordance with the social security requirements.
- Labour Protection, Labour Condtions and Prevention of Occupational Hazards
- In accordance with relevant national regulations on labour protection, including the regulations and standards concerning women workers and underage workers, Party A shall provide Party B with the required labour protection measures and labour conditions.
- In accordance with the national requirements of pre-work training, Party A shall provide Party B with training on safety, health, and prevention of occupational illness, labour law education and operational model and other technical training. Party B shall take part in the abovementioned training and shall follow and implement the health and safety requirements and prevention of occupational illness arranged by Party A.
- According to the type of work of Party B and the relevant national regulations, Party A shall provide Party B with the necessary labour protection measures and allowances, such as prevention of sunstroke, and provide Party B with regular health check in accordance with labour protection requirements.
- Party B has the right to refuse Party A’s illegal instructions and orders to work in danger. Party B has the right to report to the relevant departments or sue Party A and his/her management staff for any behaviours neglecting Party B’s safety and health.
- Labour Discipline
- In accordance with the relevant national and provincial laws and regulations, Party A shall set out all the management rules and publicly announce them to Party B. Party B shall follow these rules when he/she carries out his/her work.
- Party A has the right to inspect, urge, assess, award and punish Party B for following or failing to follow the management system.
- If Party A provides special technical training to Party B, it shall endorse a training agreement to be attached with this contract and it shall restrict the service period and the amount of compensation for the breach of the contract.
- If Party B is aware of the commercial secrets of Party A, Party B has the obligation to keep the commercial secrets. Both parties shall sign a confidentiality agreement to be attached with this contract and it shall set the years of restriction, the amount of monthly economic compensation and the amount of compensation for the breach of the contract.
- Change, Revocation and Termination of Labour Contract
- If any party asks to change any content of this contract, he/she shall inform the other party by letter. Once both parties agree to the change, the contract can be changed and they can handle the procedure of endorsing the new labour contract.
- If Party B leaves his/her position without approval for more than 15 days or accumulated for more than 30 days in 1 year, Party A can terminate this contract without paying any compensation and he/she can seek the responsibilities of Party B for breaching the rules.
- This contract can be terminated with the agreement of both Party A and Party B and Party A shall give Party B economic compensation according to the relevant rules.
- Under the following situations, either party can terminate the contract: (i) Party B does not satisfy the employment requirements or Party B refuses to work (3 days in advance and offer any explanation); (ii) Party B is sentenced to imprisonment, sent to re-education through labour, and has serious problems of corruption, theft, gambling, fighting, swindling, strike and slowdown or bad behaviour, or failing to work causing massive economic loss to Party A and repeatedly breaching the labour discipline, or being dismissed for breaching factory rules and regulations after repeated warnings; (iii) Party B serves in the military, emigrates to another country, studies overseas and enters a medium-level technical school or above; (iv) Party A restricts Party B’s personal freedom by means of violence, threat or other illegal means, or infringe Party B’s legal rights by forced labour or insulting him/her; (v) Party A has not paid Party B’s salaries for two consecutive months or above; (vi) after the inspection of relevant department, the labour safety and health situation is so bad that it seriously damage Party B’s health; (vii) Party A does not implement the terms of this contract or violates the laws, regulations and rules and infringes Party B’s legal rights; (viii) other situations according the laws and regulations.
If the contract is terminated according to items (i) and (ii) of this article, Party A does not need to pay any economic compensation to Party B. If the contract is terminated according to items (iii) –(vii), Party A needs to give economic compensation to Party B, apart from the fact that it only needs to give Party B a once-off payment if Party B emigrates to live in another country. If the contract is terminated according to item (viii) of this article, it will be decided whether economic compensation will be given in accordance with relevant laws and regulations.
- If the labour contract is terminated under one of the following situations, a written notification shall be given to the other party 30 days in advance.
Dismissal by Party A: (i) Party B is sick or the end of the period of medical treatment of non-work-related injuries and Party B cannot perform the original duties and cannot perform other arranged duties; (ii) Party B is not able to perform the duties after training or readjustment of working position; (iii) due to the change of production and technical conditions, Party A is not able to readjust Party B’s position or the employment unit is nearly bankrupt and is undergoing legal restructuring and the production situation is under great difficulty that it needs to lay off staff members. (iv) other laws, regulations and the rules set by Party A that allows Party to get early termination of labour contract.
Resignation by Party B: (i) Party B has to leave the job because of getting married or taking care of family; (ii) Party B asks to leave the job because of occupational injury or the end of medical treatment of occupational illness; (iii) other laws, regulations and the rules set by Party A that allows Party B to get early termination of labour contract.
If the party which ask to terminate the contract is not able to inform the other party in a written notification 30 days in advance, the party shall pay the other party the amount equivalent to the normal1 month salary of Party B in that year.
If this contract is terminated according to items (i) – (iii) of this article concerning the dismissal by Party A, Party A shall give economic compensation according to the rules. In addition, if the dismissal by Party A is made due to illness or non-work-related injuries, Party shall give medical allowance in accordance with the rules. If this contract is terminated according to items (i) – (ii) concerning the resignation of Party B, Party A can offer no economic compensation, but it is due to item (ii) it has to pay the compensation related to occupational injury item as required by regulations. If the contract is terminated due to the situation of item (iv) of dismissal by Party A and item (iii) of resignation of Party 3 of this article, it will be decided whether economic compensation will be given according to laws, regulations and the rules set by Party A.
- Party A cannot terminate this contract under one of the following situations (except for the dismissals due to serious illegal behaviours): (i) Party B suffers from occupational illness or occupational injuries and it is within the period of medical treatment; (ii) Party B suffers from occupational illness or occupational injuries and the labour appraisal committee has confirmed that he/she has lost or partly lost the ability to work and he/she does not ask to terminate this contract; (iii) Party B suffers from illness or non-work-related injuries within the stipulated period of medical treatment or that he/she still needs to stay in the hospital for medical treatment although the period of medical treatment has been expired; (iv) female staff member in her pre-labour period, maternity leave and lactation period; (v) Party B is having public holidays, various leaves and compensation leaves; (vi) Party B has worked in the employment unit for 15 years and there are fewer than 5 years from his/her retirement; (vii) other situations according to laws and regulations.
- This contract will immediately terminate if one of the following situations appears:
- This contract is expired and it is under the situation that it has to be terminated;
- Party A is legally declared bankrupt, or its business license is suspended, or it is ordered to close, withdraw or dissolve in advance;
- Party B begins to enjoy the pension;
- Party B is dead, or is declared dead or missing by the People’s Court.
If this contract is terminated according to items (iii) and (iv), Party A does not need to pay any economic compensation to Party B.
- Economic compensation is paid in accordance with the number of years Party B has worked in the employment unit, 1 month salary per year. Six months or above and below 1 year is calculated as 1 year; it will paid half monthly salary if it is less than 6 months.
If Party B’s salary is 3 times more than the city average wage level, the economic compensation will be set at the limit of 3 times the average wage level and the years of economic compensation shall not exceed 12 years.
- To confirm the dismissal or termination of this contract, Party A needs to give Party B the “Certificate of Dismissal/Termination of Labour Contract” and the procedures of the transition of job duties and the dismissal or termination and the payment of economic compensation shall be completed with 15 days. Party A shall not unreasonably withhold Party B’s wages, personal identification documents and refuse to handle Party B’s social security, such as pension and unemployment benefits, and handle the transfer of Party B’s files.
- Responsibilities for the breach of the contract
- If one party breaches the contract causing economic loss to the other party, it shall be responsible for the economic compensation in accordance with the consequence:
（i）Situation of Party A breaching the contract：
（ii）Situation of Party B breaching the contract：
- Dispute resolution and arbitration
- If disputes arise from both parties in implementing this contract, it should first be resolved through negotiation. If the negotiation fails, they should go to the local Labour Dispute Resolution Office to apply for dispute resolution. If the dispute resolution fails and if the party concerned asks for arbitration, he/she shall go to apply for arbitration at the local Labour Arbitration Department in 60 days starting from the date of the dispute.
- Others
- Matters not included in this contract shall be handled in accordance with relevant national, provincial and city regulations. During the contract period, if the terms in this contract is against the relevant national, provincial, and city labour laws, regulations and policies, it shall be acted in accordance with the laws, regulations and policies.
- Both Party A and Party B each keeps a copy of this contract to mutually monitor the implementation of this contract.
- The following are the rules set by Party A as attached with this contract, which have the equal effect of this contract:
（i）
（ii）
- Agreements made by both parties (if there is not enough space, please add attachment)
（i）Both Party A and Party B have no dispute concerning the working time system and labour remuneration standard and guarantee that they will not seek the responsibility of the other party concerning the amount of monthly salary and overtime payment..
（ii）
（iii）
（iv）
（v）
Party A（Stamp）： Party B (Signature or Stamp)：
Legal Representative or
Trustee（Signature）：
Date____________ _______________
Witness/Agency(Stamp)：
Date of Witness: _______________________
|
