The European Chamber welcomes the promulgation of the Labour Contract Law Go back »
2007-07-05 | All chapters
European Union Chamber of Commerce in China welcomes the promulgation of the Labour Contract LawBeijing, 1 July 2007. The Standing Committee of China's National People's Congress announced the adoption of the Labour Contract Law on 29th June 2007. The European Chamber applauds the law and its declared aim of improving labour conditions and creating harmony between the employer and the employees.
The European Chamber welcomes the fact that many of the articles presented in this law stem from labour laws in Europe. There is no doubt that the passing of the law and its strict implementation will drastically improve the working conditions in China.
The European Chamber appreciates being part of the drafting process. Joerg Wuttke, President of the European Union Chamber of Commerce in China said, “I can only praise the process. Among others we were invited to comment on the drafts. I was amazed to see that about 190,000 organisations and individuals responded to the State Council Legislative Office. We submitted a detailed report on what we considered as best international practice. Our HR Working Group consisting of company managers and lawyers put together a very comprehensive paper that the State Council Legislative office considered valuable.”
The Chamber believes that the key challenge in China remains the compliance by employers and the enforcement by authorities of existing Chinese laws. Therefore, the Chamber encourages the Chinese government to focus its efforts on improving the implementation of existing regulations. Joerg Wuttke commented, “The most important point now is the implementation of the law. In the environmental sector, we see Chinese legislation that is even stricter than European law, yet implementation is sometimes non-existent. A large gap between legislation and local governments’ ability to implement laws has a detrimental impact on the credibility of the rule of the law.” In this regard, the Chamber suggests that the education and training of enforcement officials should be substantially strengthened, especially at the local levels.
After the comprehensive drafting process, the European Chamber is not concerned about the effect of the law on European investment in China. Several studies worldwide have proved that labour cost is not the primary factor influencing corporate investment strategy. It is the market size and growth potential that turn out to be the chief reasons for investment influx. The surge of foreign investment in China is a firm rebuttal against the concerns. A more mature legal environment should be considered as an advantage in attracting foreign investment.
The European Chamber concludes that the labour contract law will assist companies in improving working conditions. The development of clear guidelines and provisions will ensure that this legislation is effectively implemented across the board.
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English version, 中文新闻稿
Some of the media reports:
1) EU firms laud China's new labor law, Reuters, 1 July 2007
2) Cautious welcome for China labour law, Financial Times, 1 July 2007
3) Accolades for China's new labor law, China CSR, 2 July 2007
4) Labor law 'will not hurt investment environment', China Daily, 3 July 2007
5) EU Chamber is not concerned about the effect on foreign investment in China, China Business Times, 3 July 2007
6) New Labour Law does not create a threat to foreign investment, Beijing Daily, 3 July 2007
7) European Chamber praises the passing of Labour Contract Law, Legal Daily, 4 July 2007
8) European Chamber positively comments on the Labour Contract Law, International Business Daily, 4 July 2007
9) China's New Labour Contract Law, China Radio International, 10 July 2007
For further information, please contact:
Grace Yao, Press Officer of the European Chamber
Phone: +86 10 6462 2066 - 30; E-mail: gyao@euccc.com.cn