AustLII Home | Databases | WorldLII | Search | Feedback

Western Australian Student Law Review

You are here:  AustLII >> Databases >> Western Australian Student Law Review >> 2017 >> [2017] WAStuLawRw 6

Database Search | Name Search | Recent Articles | Noteup | LawCite | Author Info | Download | Help

Kwok, Josephine --- "China's Labor Contract Law and its Effect on Chinese Labour Relations" [2017] WAStuLawRw 6; (2017) 1 Western Australian Student Law Review 98


Josephine Kwok[*]

China—Labor Law—Employment Law—Contractual Employment Relationships—Impact of Chinese Labor Law—Legal Enforcement—Workplace Relations

As one of the most labour-intensive countries in the world, labour relations within China remain critical to Chinese social and economic stability and expansion. The Labor Contract Law (‘LCL’), enacted in 2007 and officially taking effect from 1 January 2008, sought to improve China’s labour system by instilling the concept of a legally binding written contract to define and clarify the rights and obligations existing between employers and workers. The LCL also reflects the People’s Republic of China’s government’s recognition of the importance of upholding fair employment practices to avoid growing labour unrest. However, despite overwhelming initial public interest and debate, the LCL has encountered problems hindering its effectiveness since its implementation. Yet, the real difficulty in maintaining a pro-labour legal framework in China ultimately lies in the disconnect between the legal standards spelled out on paper and the rules actually enforced in practice. Nevertheless, the LCL does succeed in creating a ‘rights consciousness’ within the working class and encourages employees to fight for their legal rights, identifying that such rights can exist independently of their employment security and prospects. This article outlines the LCL’s key provisions, highlights the difference between the LCL and the 1994 Labor Law, and considers the responses of stakeholders to the implementation of the LCL.


As one of the most labour-intensive countries in the world, labour relations are critical to the stability of China and its recent economic reforms. As a response to widespread and escalating labour disputes, the Labor Contract Law of the People’s Republic of China (‘LCL’) was enacted. The LCL aims to improve the labour contract system, define and clarify the rights and obligations of parties to a labour contract, protect the legitimate rights and interests of labourers, and build and develop stable and harmonious labour relations.[1] It strives to end the widespread abuse of workers who have no contracts, and hence virtually no formal labour rights. It also reflects the People’s Republic of China’s (‘PRC’) recognition of the importance of ensuring fair employment practices to avoid labour unrest.[2] However, the LCL has encountered many problems since its implementation, mainly due to the sceptic opinion that a poor enforcement culture, both in Chinese labour relations and in China generally, will render the LCL somewhat ineffective in rectifying pressing labour issues.[3]

This article will firstly outline the LCL’s key provisions and the underlying reasons for its implementation. At a time when China’s economic reforms were developing rapidly, the shift towards privatisation allowed privately-owned enterprises to take advantage of low labour costs and working conditions. The LCL aimed to promote and clarify a series of labour rights from an employment contract to protect disadvantaged workers. Secondly, the article outlines key differences between the LCL and the 1994 Labor Law of the People’s Republic of China (‘LL’).[4] In particular, the LCL’s focus is to have employers enter into written employment contracts with their workers to formalise the labour relationship. The written contract also serves to impose a stricter standard on the termination of employment relationships, whereby termination must be based on ‘just cause’. Finally, this article will consider the different reactions towards the LCL from various stakeholders. It seeks to highlight the contrast between employers’ and workers’ attitudes towards the LCL’s strict labour provisions, as well as raise awareness regarding the ways in which some employers may resist compliance with the new legislation.


The Standing Committee of the National People’s Congress passed the LCL on 29 June 2007, and it came into effect on 1 January 2008. The Ministry of Human Resources and Social Security of the People’s Republic of China is the body responsible for administering the LCL. It has been considered ‘the most significant reform to the law of employment relations [in China] in more than a decade’.[5] At the time it came into effect, China’s economic reform saw greater development in the private sector, consisting mostly of foreign-invested enterprises and domestic private enterprises. The move towards privatisation allowed private enterprises to take advantage of low labour costs and sweatshop manufacturing conditions. The LL, then in force, was considered incomprehensive and ineffective in preventing and regulating such exploitation of workers. As a result, the LCL was created. The LCL promotes a series of rights relevant to the contractual employment relationship: remuneration, social security and welfare benefits, work-related injuries, unemployment, overtime payment, and severance pay. As providing protection for vulnerable workers is at the heart of the LCL, its enactment also highlights the important social dimensions of the law.

Having aroused ‘more public debate than perhaps any piece of legislation in the history of China’,[6] discussions surrounding the LCL’s process of formation largely focused on whether the goal of harmonising labour relations should be pursued through enforcing employment stability, or by flexible market principles.[7] Indeed, the LCL does impose stricter liabilities and economic penalties on employers than previous labour laws not merely as a deterrent, but also in the form of compensation for workers, thus allowing them to directly benefit from employer penalties.


Although the LL had been in place in China since 1994, there were still many gaps relating to labour relations that needed to be addressed. Before the LCL, China’s labour laws were often criticised as being ‘a vague and ambiguous set of statutes’,[8] which workers knew very little of. This gave employers greater flexibility to interpret the law and explain regulations in ways that served their self-interests.[9] For example, while the LL contemplates termination of a labour contract, there are no provisions about regulating the creation or amendment of the contract.[10] An even greater problem with the LL presented in that it left millions of workers unprotected, especially internal migrant Chinese workers who had moved from rural areas to work in urban China; under the LL, they enjoyed fewer rights and often did not have employment contracts.[11] It must be noted that the LCL was not intended to directly amend or abolish the LL but rather to supplement existing labour laws in China.

A Written employment contracts

The main difference between the LCL and the LL is the requirement in the LCL of a written labour contract at the commencement of an employment relationship.[12] While previous labour laws did regulate labour contracts to some degree, the LCL places emphasis on formalising the employment relationship by signing written contracts with explicit and costly penalties for non-compliance. Where an employer fails to sign a written contract within one year of commencing the employment relationship, the employer shall be deemed to have entered into a non-fixed duration contract and must pay double the originally agreed wage amount.[13] Workers completing two fixed-term contracts must also be given open-ended labour contracts to provide greater job security.[14] Prior to the LCL, employers maintained flexible hiring arrangements to reduce labour costs and to avoid compensation demands from terminated employees.[15] This made it difficult to confirm the existence of a labour relationship, in particular for Chinese rural migrant workers, which severely limited their wage claims.[16] Domestic research conducted in 2011, five years after the LCL’s implementation, showed that enterprises with more than 1000 employees had a 89 per cent signing rate of labour contracts.[17] On the other hand the LL focused heavily on the termination of the labour contract without giving sufficient attention to when and how a contract was entered into, and in many cases employers simply refused to sign a contract which effectively invalidated the obligations required under that law.[18] This demonstrates the positive impact LCL has had on protecting Chinese workers.

Article 14 of the LCL states that if the employer does not sign a written labour contract within one year after employment begins, the employer is deemed to have signed an open-ended labour contract with the employee. By legally constructing the existence of a written employment contract, this provision spares the worker the burden of proving an employment relationship when initiating a labour right claim against their employer. This benefit is somewhat illusive, considering that he worker still must prove that he or she has in fact worked for the employer for over one year. However, this should not be viewed as a weakness of the LCL. Requirement of proof of a factual employment relation, in the absence of a written employment contract, is both reasonable and necessary in order for a worker to successfully claim employment benefits. However, an issue with art 14 that should be noted is that it constructs the existence of an open-ended employment contract, but beyond that gives no guidelines for constructing the important terms of the contract.

As for terminating the employment contract, the LCL gives workers the right to terminate with ‘just cause’.[19] This may include, for example, failure to provide work safety measures, failure to pay social security on behalf of the worker, or forcing the worker to enter into the labour contract under fraud or coercion. In addition, it prohibits the employer from terminating contracts with workers who have been working continuously for 15 years and have less than five years before reaching the legal retirement age.[20] A further burden on employers presents in that under the LCL, termination of employment contracts is more expensive for them regardless of the party who initiated the termination and the grounds for termination. This is because an employer must make severance payments to the affected worker who terminated for ‘just cause’.[21] The employer must pay damages in an amount double the severance payment if the employer terminates the contract illegally.[22]

B Collective dismissals

Another major difference between the LCL and LL is the establishment of stricter provisions relating to collective dismissals. Collective dismissals occur where an employer dismisses 10 per cent or more of the workforce (or 20 or more employees).[23] In order for employers to comply with the LCL’s collective dismissal provisions, they must satisfy three requirements:

1. make a layoff plan specifying who will be affected;

2. consult for 30 days with unions or workers’ representatives; and

3. report the proposed layoffs to local labour authorities before implementing them.

However, it is unclear whether all the dismissals must occur at the same time to be considered ‘collective’, or whether the LCL provisions will still apply if 10 per cent of the work force is dismissed over a certain period.


The introduction of the LCL generated a vast range of responses from different interest groups across the nation. Its effectiveness is an important public policy issue in China,[24] where enhancing job security and improving labour protections are considered valuable to the public good. However, a lack of proper law enforcement remains an ongoing issue in China. This risks a disconnect between workers’ legal entitlements and liabilities on paper, and the actual enforcement of the LCL provisions in practice. Since the LCL came into operation, concerns have been raised as to the extent it will be enforced, and if it is properly enforced, its practical implications.

A Employers

Employers, both domestic and foreign, generally expressed strong opposition to the LCL. They were particularly concerned with how this new law would foreshadow the government’s approach to enforcing regulations more vigorously.[25] The Shanghai-based American Chamber of Commerce and the EU Chamber of Commerce lobbied feverishly against the employment security provisions in the LCL. While some amendments to the LCL were made in light of this, it was still insufficient to prevent a series of factory closures and threats made by some labour-intensive manufacturers in the Guangdong Province opposing the LCL.[26] Walmart, for example, dismissed more than 100 employees who worked in the company’s procurement offices in 2007.[27] While the company claimed this was a ‘natural’ adjustment in its global outsourcing strategy during the financial crisis, many were skeptical that the primary reason for the lay-offs was an attempt to evade the impact of the LCL later on, such as permanent contract guarantees for long-service employees.[28] Foreign enterprises opposing certain ‘harsh’ provisions in the LCL feared that it would make it more difficult for foreign entities to do business in China, which may lead to foreign investments being diverted to other developing countries.[29]

Despite the LCL’s apparent political and public support, employer resistance has become increasingly manifest, as many continue to conduct their businesses within an employment culture that refuses to give meaningful consideration to LCL.[30] A report conducted in May 2008 by the Dagongzhe Migrant Worker Centre and Worker Empowerment Organisation found that, from 320 workers surveyed, that employers have devised various ways to avoid implementing LCL provisions, or have chosen to ignore them altogether.[31] Another report conducted by the Hong Kong Liaison Office (‘IHLO’) also found that while more employers provided contracts for their employees, many of them were internet sample contracts which employers revised to suit their needs, such as inserting paragraphs that look official but have no legal standing.[32] Workers without the requisite knowledge would believe it to be an official employment contract that has legal effect. Some workers were also not allowed to read the contract in its entirety, and in other cases were asked to sign an English contract which few, especially rural migrant workers, could read and understand.[33]

Prior to the LCL, employers, especially in domestic enterprises, often relied on their networks with government officials to evade legal requirements.[34] While circumvention practices for foreign-investment enterprises are more varied, since some investors carry with them international labour standards, many still fail to comply with labour laws and regulations in China. A concerning practice engaged in by employers is that of terminating long-serving employees and hiring new employees as replacements, or terminating and rehiring the same employee on new contracts. This is primarily due to the higher labour costs generated after the LCL came into effect.[35] Under the LCL, employers are now required to pay a severance to workers laid off before their fixed-term contract expires.[36] This has created additional burdens for both foreign and domestic enterprises. For example, employers may need to customise each labour contract entered into with its employees and assess whether each potential employee is qualified for his or her job.[37]

Since employers are required to sign an open-ended contract if the worker has served at the company for a consecutive 10-year period,[38] some employers have tried to ‘zero down’ workers’ employment period by changing their date of employment in the contract.[39] Furthermore, various methods have been adopted to pressure workers to ‘voluntarily’ terminate their employment without liability, such as purposely giving aging workers more physically demanding jobs, and transferring certain senior managers to entry-level positions.[40] Another method has been to conduct a series of mass layoffs. During the first half of 2008, almost 100 000 labour contracts were terminated, which was triple the number compared to the same period in 2007.[41] This was the case with China’s largest private telecom equipment manufacturer, Huawei Technologies Co Ltd (‘Huawei’). Only three months after the implementation of the LCL, Huawei dismissed all their workers who had worked for the company for more than eight years.[42] Huawei’s plan was to enter into new written employment contracts with these workers, thereby making them ‘new’ employees and thus easier to terminate under arts 40 and 41 of the LCL. However, in response to Huawei’s actions, the Guangdong Supreme People’s Court and the Guangdong Labor Arbitration Commission jointly issued the ‘Guiding Opinions Regarding the Application of the Labor Dispute Arbitration Law & the Labor Contract Law’, to void the terminations.[43] Similarly, French supermarket giant, Carrefour S.A. (‘Carrefour’), required most of its 40 000 Chinese workers to resign and then sign a new two-year contract on the eve of the LCL’s implementation.[44] This allowed Carrefour to circumvent the LCL’s provisions such as art 42, which gives existing long-term workers certain rights when terminated.

Another strategy reportedly utilised by employers, especially foreign labour-intensive companies, was to relocate factories to other developing countries such as Vietnam, Cambodia, Thailand or Bangladesh to avoid increases in labour costs in China. However, a study from the IHLO showed that increases in labour costs had different impacts on different sectors and companies.[45] So while some firms did relocate all or part of their production processes to inland or northern provinces where labour costs were cheaper, others adopted the ‘China plus one’ strategy, outsourcing labour-intensive operations to countries such as Vietnam while keeping the majority of their production activities in China.[46]

One of the biggest changes to China’s economy with the introduction of the LCL was that of a more rigid labour market. In terms of its effect on the local economy, the LCL could influence the hiring strategies of employers, especially multinational enterprises.[47] Potential factors may include the dualisation of the labour market due to more outsourcing of tasks and greater temporary and part-time employment within the boundaries permitted by the LCL, higher labour costs due to a more complex and tedious adjustment process, and affording greater power to collective bargaining entities. These employers may begin to either outsource production to staffing firms, or start over periodically with a fresh group of temporary hires to fill labour shortages when they arise and avoid the liability of eventual severance payments.[48]

B Workers

Workers both in private and public enterprises and rural and urban locations were generally welcoming of the LCL and its increased employment protection provisions.

Despite the insertion of stricter regulation provisions in the LCL, there remained a steady increase of labour dispatching.[49] The use of labour dispatching agencies provided employers with a loophole by placing workers under contract with the dispatching agency, who in turn contracts with enterprises for the use of the workers. This avoids the written contract requirement needed between the employer and worker. Although in theory the LCL gives many of the same rights to both directly hired and dispatched workers, this does not translate into practice. Many dispatched workers who are actually long-term employees working on short-term and precarious labour contracts receive lower wages, lower social insurance contributions, and no medical insurance or days off for the same work carried out by permanent employees alongside whom they work.[50]

As the increased use of labour dispatching agencies undermined the initial intent of the LCL, amendments were made in 2012 by adopting the ‘Decision on Revising the Labor Contract Law of the People’s Republic of China.[51] These amendments were based on the Standing Committee of the National People’s Congress’ review on the widespread labour dispatching services. The amendments aimed to eliminate loopholes with respect to the hiring of dispatched workers, primarily by lifting the threshold for entering into labour dispatching businesses, and requiring registration of a labour dispatching company to be subject to the pre-approval of labour authorities. To better protect workers, lifting the threshold ensures that well-established entities provide proper employment services. Pre-approvals of a business prior to their registration can also act as a means for labour authorities to play an active role in screening dispatched workers.[52]

The LCL has also had a significant impact on workers in relation to the labour dispute resolution system. The labour dispute resolution system was implemented at a national level for all enterprises under the LL.[53] Since its establishment and up until the commencement of the LCL, labour disputes increased 25 per cent annually, on average.[54] However, when the LCL came into effect, arbitrated labour disputes increased dramatically.[55] The Ministry of Human Resources and Social Security of the PRC stated that in 2008, the number of labour disputes rose to 693 000, almost double the number of cases from the year before.[56] According to the 2009 Annual Report of the Congressional Executive Commission on China,

reports on disputes in 2009 show that this rapid rate of increase is continuing and that the explosion of disputes is particularly apparent in coastal cities and provinces, including Beijing, Shanghai, Jiangsu, Zhejiang and Guangdong.[57]

These statistics suggest that the LCL may have increased the capacity of workers to initiate disputes with their employers, allowing them to better enforce their rights. Indeed, the LCL gives workers a private right of action to enforce their legal rights without the aid of the State.[58] While government departments may still assign administrative penalties for labour law violations, this direct private right of action has increased workers’ independence in handling their employment matters on their own, which in turn better reflects the privity of an employment contract. The LCL also guarantees workers the ability to file labour arbitration cases free of charge.[59] However, while these statistics may suggest that the LCL has empowered workers in enforcing their labour rights, it could also indicate a high level of disagreement about how to interpret some of the LCL’s key provisions. Furthermore, the robust labour growth in urban China in recent years would have facilitated the effectiveness of the LCL.[60] Since labour demand has been strong, employers have had to offer greater labour conditions, including labour contracts, to attract workers.[61]

C Trade unions

Another factor contributing to the ineffectiveness of the enforcement of labour laws in China, such as the LCL, is the lack of independent trade unions to represent workers. In China, the only official labour organisations are those affiliated with the All-China Federation of Trade Unions (‘ACFTU’).

The LCL has given labour unions a greater role in representing and protecting workers’ rights. It recognises the ACFTU as the sole legal representative for workers in the mediation process. Articles 51 to 56 of the LCL specifically authorise labour unions to enter into collective bargaining agreements with employers and allows all workers in China to join the ACFTU. Under the LCL, the ACFTU can negotiate salary, working hours, holidays and other employment benefits on behalf of workers. From the ACFTU’s perspective, it believed that the LCL would strengthen its ability to make some long-delayed inroads among workers in the export industries.[62] The ACFTU has also urged local trade unions to counter widespread violations of the LCL, and report them to the ACFTU Labour Administrative Department.[63] However, unlike the Western concept of trade unions, the ACFTU is a ‘quasi-governmental entity’[64] subordinate to the Chinese Communist Party,[65] and relies on government subsidies for funding.[66] Consequently, the ACFTU can be somewhat ineffective in bargaining for workers’ rights and enterprise agreements, and are also prohibited from organising strikes.[67]

Given the ACFTU’s status, their main interests are expected to be consistent with the Chinese Communist Party’s, being to promote economic growth and maintain workplace harmony.[68] As their primary responsibility is to ‘prevent work stoppages’,[69] this implies a greater role of acting as a mediator to facilitate dispute resolutions between employers and workers rather than representing workers in seeking law enforcement and managerial compliance.[70] Therefore, despite the ACFTU having powers in the LCL to assist the 120 million workers they represent, they have actually had minimal practical impact on improving labour protections. Furthermore, the larger responsibilities the LCL have given to trade unions in company operations could mean less autonomy for foreign-owed firms to conduct business in China. United States companies, such as Kraft Foods Group Inc and General Electric, have already reported difficulties with mediation and arbitration labour dispute mechanisms as they have attempted to adjust production in China.[71]

D Government bodies

Local governments responded to the LCL’s implementation in different ways. In major manufacturing hubs, local governments stated that the LCL was ‘bad timing’ and appealed to the central government for relief. The State Council advised them to take temporary measures to avoid mass lay-offs by reducing labour costs, suspending social premiums, and extending tax preferences for certain enterprises.[72] Guangdong, for instance, suspended collective bargaining in enterprises that had experienced labour disputes and provided compensation to migrant workers affected by the 2008 global financial crisis.[73] The central government’s assistance to local and provincial governments during the period of adaptation to the LCL further demonstrates the strong political and social concerns and objectives surrounding the legislation.

While State and local labour administration authorities have been given the roles of supervising and inspecting employers’ compliance with the LCL and its supplementary labour regulations and guidelines, in reality, many lack the economic and political incentives to fulfil those responsibilities.[74] This may be because demanding compliance would increase costs to local businesses which, in turn, could diminish the economic growth in that particular area.[75] This is often an issue considered to be more significant than upholding workers’ rights. There also continues to be a shortage of labour inspectors,[76] which can allow employers to ‘buy time’ and wait for inspection arrivals. Employers may do this by fabricating records or coaching employees to deceive inspectors in the event that bribery is ineffective.[77] These practices have caused the government to endorse a stricter approach towards enforcing the LCL, but in a way which avoids severe backlash and pressure from larger corporations and interest groups.[78]


Since undergoing economic reforms and opening their markets for foreign investors three decades ago, the Chinese labour market has arguably lowered labour standards and conditions. The LCL intended to provide a comprehensive restructure and transformation of the country’s labour system, from one that was completely subject to central planning, to one that is based on a free-market contract system.[79] While the LCL does offer a much greater level of protection for workers than its predecessor, the LL, its true potential and effects are yet to be seen. This is largely due to the poor legal enforcement culture deeply entrenched in Chinese society. Nevertheless, what the LCL has undoubtedly achieved is the creation of a ‘rights consciousness’ within the working class against powerful and oppressive employers. These rights can exist independently of workers’ employment prospects.[80] By providing favourable legal entitlements for workers, the LCL encourages them to channel the fight for their legal rights towards their own employers, rather than merely railing against an ‘unfair society’.[81]

[*] Josephine is a final year Juris Doctor and Chinese Business Law Graduate Diploma student at the University of Western Australia.

[1] <<中华人民共和国劳动合同法>> [Labor Contract Law of the People’s Republic of China (LCL)] (People’s Republic of China) National People’s Congress, 1 January 2008, art 1 (‘LCL’).

[2] Mary Gallagher, John Giles, Albert Park and Meiyan Wang, ‘China’s 2008 Labor Contract Law: Implementation and implications for China’s Workers’ (Working Paper No 6542, 2013, Work Bank Policy Research) 2.

[3] Eli Friedman and Ching Kwan Lee, ‘Remaking the World of Chinese Labour: A 30 Year Retrospective’ (2010) 48(3) British Journal of Industrial Relations 507, 510.

[4] <<中华人民共和国劳动法>> [Labor Law of the People’s Republic of China (LL)] (People’s Republic of China) National People’s Congress, 5 July 1994 (‘LL’).

[5] Sean Cooney et al, ‘China’s New Labour Contract Law: Responding to the growing complexity of labour relations in The PRC’ [2007] UNSWLawJl 45; (2007) 30(3) UNSW Law Journal 786, 786.

[6] Friedman and Lee, above n 3, 525. Nearly 200,000 comments on the then-pending LCL came through during the first month of the government’s efforts to solicit public discussions. Two-thirds came from ordinary workers, while the rest came from employers, social organisations and academics.

[7] Dong Baohua, ‘Contend and Thought of Chinese Labour Contract Law’ (Shanghai Renmin Press, 2011) 159.

[8] Haiyan Wang, Richard Appelbaum, Francesca Degiuli and Nelson Lichtenstein, ‘China’s New Labour Contract Law: is China moving towards increased power for workers?’ (2009) 30(3) Third World Quarterly 485, 486.

[9] VH Ho, ‘Labor Dispute Resolution in China’, China Research Monograph 59, Institute of East Asian Studies, University of California, Berkeley, Ch 4.

[10] Gayle Allard and Marie-José Garot, ‘The Impact of the New Labor Law in China: New Hiring Strategies for Foreign Firms?’ (2010) 12 Revista Direito GV 527, 528.

[11] Ibid 529.

[12] LCL art 7.

[13] LCL arts 14, 82.

[14] LCL art 14; Gallagher, Giles, Park and Wang, above n 2, 10.

[15] Tu Lan, John Pickles and Shengjun Zhu, ‘State Regulation, Economic Reform and Worker Rights: The Contingent Effects of China’s Labour Contract Law’ (2015) 45(2) Journal of Contemporary Asia 266, 274.

[16] Wei Quan, Yan Dong and Ye Jingyi, ‘Rethinking the Labour Contract Law of China’ (2014) 1(2) University of Warsaw Journal of Comparative Law 98, 103.

[17] Daowen Xu, ‘Labour Contract and its Effect of Protecting Rights – Based on survey data from the nine cities’ (2011) 29(7) Hebei Law Science 12.

[18] Cooney et al, above n 5.

[19] LCL arts 39–41. However, an employer has always had the right to terminate for just cause even under the LL.

[20] Ibid art 42.

[21] Ibid art 47.

[22] Ibid art 48.

[23] Ibid art 41.

[24] Zhiming Cheng, Russell Smyth and Fei Guo, ‘The Impact of China’s New Labour Contract Law on Socioeconomic Outcomes for Migrant and Urban Workers’ (Discussion Paper No 51, Monash University Department of Economics, 2013) 14.

[25] Lan, Pickles and Zhu, above n 15, 277.

[26] Brendan Smith, Tim Costello and Jeremy Brecher, Labour rights in China (21 December 2008) Foreign Policy in Focus <> .

[27] IHLO, Sackings at Wal-Mart: global restructuring or avoiding the new contract law? (December 2007) Hong Kong Liaison Office <> .

[28] Wang, Appelbaum, Degiuli and Lichtenstein, above n 8, 488.

[29] Guan Xiaofeng & Andrew London, Labor Law: No Giving in to Corporate Pressure (12 June 2007) China Daily <> .

[30] YL Zheng, ‘It’s not what is on paper, but what is in practice: China’s New Labor Contract Law and the enforcement problem’ (2009) 8 Washington University Global Studies Law Review 595, 601.

[31] Migrant Workers’ Center, A survey on the implementation of the new Labour Contract Law (19 May 2008), Fair Labor Association <>. The report highlights that 64 per cent of the time, workers reported that the hours they worked did not correspond to the hours specified in their contract and 28 per cent of workers earned less than the legal minimum. Furthermore, while the majority of the workers had signed contracts, 33.4 per cent said that they were forced to sign ‘blank or incomplete contracts’ without specifying the name of the employer, work position, wages, working hours, social insurance and benefits, and the terms for changes, renewal, and termination of the contract. In some cases, workers were even asked to sign contracts written in English, a language few could read.

[32] Worker Empowerment, New ongoing violations after the implementation of Labour Contract Law in China (12 June 2009) Worker Empowerment <> .

[33] Hong Kong Liaison Office of International Trade Union, ‘New Labor Contract Law: Myth and Reality Six Months After Implementation’ (Press Release, 1 June 2008) <> .

[34] Aaron Halegua, ‘The Debate Over Raising Chinese Labor Standards Goes International’ (2007) Harvard Law & Policy Review 5.

[35] Geoff Dyer and Tom Mitchell, ‘Labor Law Set to Raise Costs in China’ (2 January 2008) Financial Times (online) < & desktop=true> .

[36] LCL art 13.

[37] Jones Day, ‘Employment Strategy for Foreign Investors in China after the Publication of the Implementation Rules of the Labor Contract Law’ (Commentary, December 2008) <> .

[38] LCL art 14.

[39] However, this option has been closed by the Implementation Rules, which provide that the starting date of the 10 consecutive years shall be the date when the employee starts to work at the company, and not the date of signing the contract with the employer.

[40] Outlook Weekly, New labour–capital games with the New Labour Contract Law (23 January 2008) Xinhua Press.

[41] Du Yiwen and Bo Yaoyao, ‘100 thousand people dissolved their labour contracts in Nanjing since the new Labour Contract Law took effect’, Modern Express (online), 19 June 2008 <> .

[42] Qiu Huihui, ‘Huawei’s countermeasure against the new law’, 21st Century Economic Report (27 October 2007) Sina <> .

[43] Dan Harris, The Impact Of China’s Labor Contract Law (15 September 2008) China Law Blog <> .

[44] Ibid.

[45] Zheng, above n 30.

[46] Chris Russell, China Plus One: Does it Add Up? (2 February 2015) CKGSB Knowledge <> .

[47] Allard and Garot, above n 10, 534.

[48] Ibid 535.

[49] Jiang Y and Yang X, ‘Labor rights protection of subcontracted workers: Empirical analysis based on the Labor and Contract Law Investigation Questionnaire’ (2011) 2 Journal of Chinese Academy of Governance 52. A survey of 133 Chinese enterprises found that 18 per cent of firms experienced a sharp increase in subcontracted labor, and another 27 per cent experienced a modest increase following implementation of the new Law. Lin and Fan, ‘An analysis of the statutory regulation on labor dispatch of China’ (2011) 6 Journal of Renmin University of China 71-80. Another study estimated that in Beijing, the number of subcontracted workers increased by 58 per cent from 2007 to 2008.

[50] Lan, Pickles and Zhu, above n 15, 275.

[51] (People’s Republic of China) National People’s Congress, Order No 73, 28 December 2012.

[52] LCL arts 58, 59.

[53] LL arts 77–84.

[54] Gallagher, Giles, Park and Wang, above n 2, 19.

[55] Ibid.

[56] Allard and Garot, above n 10, 532.

[57] Congressional-Executive Commission on China, 2009 Annual Report (2009).

[58] See, eg, LCL arts 26, 56.

[59] Allard and Garot, above n 10, 532; LCL art 26.

[60] Gallagher, Giles, Park and Wang, above n 2, 30.

[61] Cheng, Smyth and Guo, above n 24, 15.

[62] Wang, Appelbaum, Degiuli and Lichtenstein, above n 8, 487.

[63] Outlook Weekly, ACFTU: Huawei’s resignation issues has left negative effects (10 November 2007) Xinhua Press <> .

[64] Ronald C. Brown, ‘China’s Collective Contract Provisions: Can Collective Negotiations Embody Collective Bargaining?’ (2006) 16 Duke Journal of Comparative & International Law 35, 52.

[65] <<中華人民共和國工會法>> [Trade Union Law of the People’s Republic of China (TUL)] (People’s Republic of China) National People’s Congress, 3 April 1992, art 4.

[66] Ibid art 42.

[67] Ibid art 25.

[68] Gallagher, Giles, Park and Wang, above n 2, 23.

[69] Lawrence Cox, ‘Freedom of Religion in China: Religious, Economic and Social Disenfranchisement for China's Internal Migrant Workers’ (2007) 8 Asian-Pacific Law & Policy Journal 370, 412.

[70] All-China Federation of Trade Union, A Brief Introduction to the All-China Federation of Trade Unions (20 September 2007) All-China Federation of Trade Union (ACFTU). The ACFTU is considered the largest labor organization in the world, with a membership of almost 170 million, more than 500 000 full-time officials, and more than 1.3 million ‘grassroots level’ (enterprise-level) unions.

[71] Allard and Garot, above n 10, 537.

[72] Hong Kong Liaison Office of International Trade Union, ‘ACFTU in a Time of Crisis: Back to the Old Way?’ (Press Release, 2009) <> .

[73] Ibid.

[74] Zheng, above n 30, 607.

[75] Ibid.

[76] Sean Cooney, ‘Marking Chinese Labor Law Work: The Prospects for Regulatory Innovation in the People’s Republic of China’ (2006) 30(4) Fordham International Law Journal 1051, 1066.

[77] Zheng, above n 30, 608.

[78] Lan, Pickles and Zhu, above n 15, 281.

[79] Zheng, above n 30, 616.

[80] Wang, Appelbaum, Degiuli and Lichtenstein, above n 8, 498.

[81] Ibid.

AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback