Wednesday 11 February 2009
Bosses told to give warnings before job cuts
Beijing has ordered companies to give their local labour bodies one month’s notice of any plans to cut either 10 per cent of their staff or more than 20 workers, in a heavy-handed attempt to ease the surging unemployment brought on by the global economic crisis.
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Bosses told to give warnings before job cuts
Choi Chi-yuk
11 February 2009
Beijing has ordered companies to give their local labour bodies one month’s notice of any plans to cut either 10 per cent of their staff or more than 20 workers, in a heavy-handed attempt to ease the surging unemployment brought on by the global economic crisis.
In a directive issued last week and published by China News Service yesterday, the State Council said that as the impact of the financial crisis deepened and spread, workers were struggling to find jobs and to hold on to the ones they had.
In an apparent attempt to stem the job losses, the directive ordered all businesses to consult labour unions or staff before notifying human resources and social security departments of plans to make major staff cuts.
Thousands of export-oriented factories in the Pearl River Delta have closed and plants in other parts of the country have suffered.
Statistics from the Ministry of Agriculture released earlier this month showed that up to 20 million, or 15.3 per cent, of the country’s 130 million migrant workers had lost their jobs recently.
However, despite the dire conditions some experts doubt whether the new rule would improve the situation.
“This kind of executive measure, which is also supported by the New Labour Contract Law introduced last year, can only yield results when the economy is not too bad and in line for a recovery in the short term of, say, three months,” Dong Baohua, a professor of labour law at East China University of Political Science and Law.
“But when a bleak economy persists for a year or so, the measure will certainly be futile.
“The measure will only speed up the collapse of enterprises in that case.”
Professor Dong said such regulations had little impact in some parts of Guangdong.
“Some former factory owners in Guangdong told me that they might have weathered the financial crisis if the authorities had not forced them to keep extra staff.
“They said they were forced to fold their businesses in the end simply due to the burden of labour costs,” he said.
In a bid to give the economy a short-term boost while hitting its gross domestic product growth target of 8 per cent for the year, Beijing has also rolled out a massive 4 trillion yuan (HK$4.5 trillion) stimulus package.
The State Council’s directive asked all 31 provinces, municipalities and autonomous regions to use the spending package to create as many jobs as possible.
College graduates, retrenched workers, migrant workers and demobilised soldiers were all in urgent need of jobs, the document said.
It said the top priority for all labour officials was to come up with jobs for the millions of college graduates.
In a year marking the 20th anniversary of the student-led June 4 protests, Beijing is paying close attention to the mood among the estimated 6.1 million graduates.
The central government warned regional officials that their ability to resolve unemployment issues would be a crucial yardstick in their performance appraisals.
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