Statement on Draft Labour Contract Law Go back »
2007-02-24 | Beijing
Statement on the Draft Labour Contract LawIn light of recent media attention concerning the European Chamber’s position on the draft Labour Contract Law, the Chamber would like to take this opportunity to clarify its position on this important piece of legislation.
In early 2006, the Legislative Affairs Committee (LAC) of the National People’s Congress (NPC) issued a public call for comments on the first draft of the Labour Contract Law. The European Union Chamber of Commerce in China welcomed the opportunity to provide input on the new legislation and was one of over 190,000 organisations and individuals who submitted comments to the NPC. These comments are summarised below.
The European Chamber congratulates the Ministry of Labour and Social Security (MOLSS) for its efforts in drafting such a complex law that aims to clarify various aspects of employment relationships. The Chamber believes that there is a serious need to improve working conditions in China and stands firmly behind the Chinese government’s efforts to improve working conditions.
The European Chamber welcomes the fact that many of the articles presented in the draft law stem from labour laws in Europe. There is no doubt that if such a law was passed and strictly implemented, working conditions in China would drastically improve. However, the key challenge in China remains the compliance by employers and the enforcement by authorities of existing Chinese laws. Although the European Chamber welcomes the new draft labour provisions, it is concerned that current levels of compliance and implementation of existing legislations are inadequate. The European Chamber therefore encourages the Chinese government to focus its efforts on improving the implementation of existing regulations.
The European Chamber applauds the declared aim of the Labour Contract Law, to improve labour conditions and create harmony between the employer and the employees. Indeed, through the implementation of standards, codes of conducts and Corporate Social Responsibility activities, guided by International Conventions and internationally recognised CSR standards.
Our member companies are already voluntarily applying standards that go beyond the objectives set out in the latest draft Labour Contract Law. Furthermore, through the European Chamber’s Supply Chain Taskforce and CSR Working Group, its companies, through engaging in multi-stakeholder dialogues and best practice sharing activities, actively address labour, health and safety as well as environmental issues.
In the summer of 2006, the European Chamber also launched its bi-lingual Corporate Social Responsibility study aimed at providing Chinese companies with practical information based on European best practice in order to improve their corporate social responsibility. The study focuses on issues such as supply chain management, corporate governance, community involvement and environmental practices.
The Chamber believes that the introduction of the new labour contract law will assist Chinese firms in improving working conditions and reduce the gap between standards currently implemented by domestic and European firms. Furthermore, in line with its commitments to improve working conditions in China, the Chamber would like to reiterate the need for clear guidelines and enforcement mechanisms so as to ensure the effective implementation of Labour Laws. The development of clear guidelines and provisions will ensure that this legislation is effectively implemented across the board.