Draft Labour Contract Law for the PRC Explained Go back »

2006-04-13 | Shanghai

Information Session on the draft of the New Labour Contract Law of the PRC

On April, 13th over 250 members of the European Chamber as well as the German, Austrian and Swedish Chambers gathered at the Regent Hotel in Shanghai to participate in an information session organized by the European Chamber. The aim of the seminar was to explain the draft Labour Contract Law for the PRC and raise awareness of its potential impact on the Chinese labour market and ultimately the human resources strategies of European companies operating in China.

In the view of many experts if the draft is enacted in its current form, many employers will need to review and restructure their labour contracts and human resources policies. After a first reading in the Standing Committee of the National People's Congress (NPC), the draft was made public for comments on the website Legal Committee of NPC until April 20th. The draft is likely to become law in the second half of this year.

Dr Andreas Lauffs, head of the China Employment Practice Group of Baker & McKenzie opened the seminar.
In his presentation he pointed out 10 areas of key concern for employers. The strengthened role of Trade Unions and the restrictive termination of fixed-term contracts among others are viewed to be overprotective to employees and limit employers's flexibility.

Matthew Durham of Linklaters joined Dr Lauffs for a lively panel discussion during which the two experts answered various practical questions raised by the audience. Following the seminar the European Chamber received numerous comments from member companies on the draft law.

The comments and recommendations were compiled in a letter that was submitted to the Legal Committee of NPC on April 20th.