BEIJING — China yesterday enacted a law meant to improve workers’ rights after the communist government took the unprecedented step of seeking input from foreign companies and the Chinese public.
The measure, the biggest change in Chinese labor law in more than a decade, was preceded by intense debates, warnings of potential damage to business, and charges from activists that U.S. and other foreign companies were trying to suppress workers’ rights.
Approval came two weeks after police discovered children and adults working as slaves at brick kilns in the country’s central provinces, highlighting the abuses that have accompanied China’s economic boom.
The law is meant to set standards for layoffs, severance, use of temporary workers and other conditions in China’s rapidly evolving labor market. A provision added at the last minute in response to the slavery scandal will punish officials for negligence or misconduct.
“The law is meant to protect workers and their rights,” legislator Xin Chunying said at a press conference.
The proposed law was introduced in December 2005. The following April, the government took the rare step of publishing the first draft and asking for public comment. It got more than 190,000 responses from the public and from companies.
Foreign business groups expressed alarm at some portions of an early draft, including a provision requiring approval from China’s state-sanctioned unions for layoffs. They argued that overly restrictive rules could raise costs and hurt business.
A report issued yesterday by the legislature on the approved law made no mention of such union approval. It said a company that plans to lay off more than 20 workers has to inform its union and listen to its opinion. But the law retains provisions limiting probation periods and entitles more workers to severance pay — a step that companies say could raise wage costs.
A text of the law has not been released.
Mrs. Xin, deputy chairman of the law committee of the legislature’s Standing Committee, tried to assure foreign investors they will not be hurt by the new rules.
“If there is some bias in the application of the law, it would be in favor of foreign investors because local governments have great tolerance for foreign investors in order to attract and retain investment,” she said. “Even if [companies] violate labor law, [officials] are still hesitant to resist them.”
Most labor complaints are directed at Chinese employers or smaller companies run by foreign entrepreneurs. Major Western companies generally offer the best pay and working conditions. But state media are quick to publicize accusations of misconduct against well-known American and other Western employers.
The communist government is trying to update its legal and political structures to keep pace with a rapidly changing society and market-oriented economic reforms.
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