Xinhua News Agency

Huawei halts lay-off plan after criticism ahead of contract law

PUBLISHED : Sunday, 11 November, 2007, 12:00am
UPDATED : Sunday, 11 November, 2007, 12:00am

Telecommunications hardware giant Huawei has suspended a controversial plan to persuade thousands of long-serving employees to resign ahead of a new labour law after the All-China Federation of Trade Unions stepped in.

The proposal had caused uproar across the mainland in the past few weeks. The Communist Partycontrolled federation reprimanded Huawei and warned it not to repeat the same mistake, Xinhua reported yesterday.

Huawei had persuaded thousands of employees with at least eight years' service to leave their posts by offering redundancy packages of 20,000 to 160,000 yuan and promising to rehire them.

Huawei had reportedly shed 7,000 workers since September, but yesterday Xinhua put the number at 5,100.

The idea was widely seen as a tactic to allow the company to escape the obligations of the new Labour Contract Law.

From January 1, employees who have worked for more than 10 consecutive years or served more than two consecutive contract terms with a company will be entitled to ask for an 'open-end' contract, effectively making them permanent staff.

Permanent staff would no longer need to renew their contracts and would enjoy more job protection.

Huawei's move caused a national furore, with many experts, writers and the public accusing the company of setting a bad example and showing a lack of social responsibility.

Although workers were said to be happy with the terms offered, the union said yesterday the incident had had a 'negative social impact' and demanded Huawei 'take measures to repair the damage'.

On Friday the official in charge of the federation's Guangdong branch summoned the vice-general director of Huawei to a meeting, Xinhua reported. It said Huawei agreed to scrap the scheme and would submit a revised plan to workers.

A federation spokesman said it was very concerned by the incident. 'This happened just before the introduction of the Labour Contract Law. It has caused unnecessary speculation and had a negative impact,' Xinhua quoted the spokesman as saying.

'Huawei must take measures to readdress the issue. It must listen to the workers and respect their rights.'

The federation said the Shenzhen branch of the Communist Party and city government had held several meetings to discuss the Huawei case in recent weeks. The city government would soon launch an education campaign on the Labour Contract Law to 'clarify misunderstandings'.