Human Resources and Legal & Taxation Working Group Joint Meeting in Guangzhou - Register now!

The European Chamber PRD Chapter is pleased to invite you to a joint meeting of the Human Resources Working Group and the Legal & Taxation Working Group that will take place on Tuesday, December 11, 2007 from 4:00 to 6:00 pm in Guangzhou.

Main Topic

The main topic will be: the New Employment Contract Law.
Knowing that the Employment Contract Law will get effective on January 1, 2008, the Human Resources Working Group and the Legal & Taxation Working Group are combining their knowledge to discuss the issues, the positive changes and the impact this law will cause.

Jeremy Sargent from JS Associate will give an overview of the law and its implementation. After this both groups will discuss the employment contract law.

Participants are encouraged to express their concerns and ask questions. They will have the chance to present and share their experience and participate active in the roundtable discussion.

We warmly invite you to be part of this HR Working Group meeting.

Agenda:
Date: December 11, 2007
Time:
3:30 - 4:00pm: Registration
4:00 - 4:45pm: Presentation on the Employment Contract Law
4:45 - 6:00pm: Roundtable Discussion
Venue: Rm. 2401-03, 24/F. GIE Tower, 403 East Huanshi Road
Please confirm your participation by e-mail to: prd@euccc.com.cn.

Please remember to cancel your participation if you are unable to attend the session. If you cancel the day of the meeting the preferred means is by telephone. This will help to ensure the smooth running and successful organization of our event. Thank you for your understanding.
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If you have any questions related to registration for this meeting, access, how to become a member, please contact Simmi Huang: Tel: 020 8758 0479, send an email to prd@euccc.com.cn .
If you have any questions related to topics and WGs organization, please contact Timothee Rossignol, Tel: 020 8758 0479, or send an email to trossignol@euccc.com.cn ******************************************************************************
Best Regards
Timothee Rossignol
Business Manager

Event review

Human Resources and Legal & Taxation Working Group Minutes

Date: 11th December, 2007
Venue: TOTAL Guangzhou office
Author: Jeremy Sargent/Timothee Rossignol

Agenda
1.  Welcome.
2. Roundtable discussion about New Employment Contract law.
3. Announcement about upcoming event.

Discussion Points
1. Welcome

Timothee Rossignol welcomed all participants and introduced the topic of the day

2. Roundtable discussion about New Employment Contract law

In the beginning of the meeting, Jeremy Sargent from JS associate remind all participant about the key points of the New Employment Contract law and mention several issues that European company may face with their employees.

On June 29, 2007, the standing committee of the National People’s Congress adopted the Labor Contract Law of the People’s Republic of China, set to come into effect January 1st 2008.

However, many points of this new law already exist at local level. Mr. Sargent reminds the group about the rules of probation from national level to District level. The group agreed to say that the legislation and especially the different drafts were more open to comments than before.

The PLC employment is a policy document (obligation) putting on paper. The aims of this new law are focus on two aspects:

- Fight against discrimination
- Ability of the employee to commit law case to the court against employer

The goal of the government is to create a harmonious society, define the hiring and terminating conditions as well as increasing the power of employee when dispute with employer. However, we also notice that the last statistic issue from the government regarding dispute between employer and employee already reflect this trend: In 87% of the dispute, the employees won the case.

Mr. Sargent insists on the fact that if employer wants to win a case, he has to provide the evidences. However, in many cases, even if regarding the law employer was right, it is still a problem for employer to bring the evidences.

We mention the serious bridge between the labor discipline and the understanding of the law for employer. Many people do not define the risks are on employer and do think that everything can be solve by giving to employee a monetary compensation equal of one to two months salary.

Implementation of a Labor conduct book (employment handbook):
the new Employment Contract Law give more acknowledge to the Labor Conduct book and allow Employer to prevent himself against misbehaviors or misconduct of employee. The Labor conduct book must:

- Stipulate certain behavior as a breach
- Stipulate the consequences (e.g. first time: verbal warning; second time : written warning; third time: contract termination)

The new Labor Contract Law gives more power to the labor union (employee entities) regarding day to day dispute.
They may organize collective bargaining and have to be consulted on many instances, even though their agreement is not mandatory. They must be involved in mass lay- off and company policy making. . The trade union may render support and assistance for employees that apply for labor arbitration or file for litigation.

Regarding employer compensation for penalty, the new law limit compensation except for two cases:

- Non competition: The employer and employee may enter into a non-competition agreement; however, such an agreement should be limited to senior management personnel, senior engineers and any other employees’ having confidentiality obligations. There are no restrictions regarding the scope, the geographic area and the terms. The maximum duration of the non-competitions period is two years. The compensation is on a monthly basis for the employee during the term of the competition restriction.
In Non-competition dispute, former employer may also put responsibility on the new employer as well.

- Refund of training expenses: An employer can sign a mutual agreement with employee for special training to assure that employee can not leave the company during a certain period of time after completion of the training. However, the term “special training” is not clearly defined within the new law.
Unresolved issue:
One of the main problems with labor laws in China is their enforcement. The central Government draft, execute and enforce the law. However, at local level, there is a gap regarding law application between FIE’s and Chinese company. Most of the US or European company are monitored very closely.
Any new laws in China need a lead time to adjust themselves to the market, area and industry. Some points are still unclear and lack of clarity and consistency within them.
The result of the law for European companies might be an increase of the cost of hiring and terminating staff. The new labor contract law increases the obligations and legal requirements for foreigner that might affect the employment flexibility as well as employment risk.
Final advice will be to consider hiring a professional advisor to make sure that your contracts are in compliance with the new law and not invalid.

3. Announcement about upcoming event.

- The next Legal and Taxation Working Group will be the 8th of January 2008. The main topic will be the new Enterprise Income Tax (also called Corporate Income Tax)

- A Corporate Income Tax seminar will be held in Guangzhou on 10th of January as well as in Shenzhen on 23rd of January.

- The next Human Resources Working Group will be at the end of January in both cities: Guangzhou and Shenzhen.

- The Kick off Environment Working Group will be on 22nd of January in Shenzhen 

- The European Chamber PRD chapter organizes a series of 4 seminars on Intellectual property Right starting 16th of January by an introduction of Intellectual Property Right in China.

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