Landmark labour law enacted

BEIJING has passed a landmark law that aims to give protection to certain redundant workers, making it easier for cash-strapped enterprises to make lay-offs.

The Regulation on the Dismissal of Workers Due to Economic Reasons in Enterprises will be effective from January 1.

The new regulation, which sets down in detail a section of the Labour Law which was passed in July this year, spells out procedures loss-making firms should follow when aiming to shed staff.

Beijing has been under growing pressure to introduce labour legislation as inflation has rocketed, fuelling worker unrest.

At present, although workers are laid off, there no rules to protect them from wrongful dismissal.

From the beginning of January, bosses will have to gain approval from unions and workers before any dismissal is announced, said Bai Ping, an official from the Labour Ministry. Those plans must be submitted 30 days in advance.

Laid-off workers would receive compensation, Ms Bai said, although there is no provision for how much they would be entitled to.

'These are only short-term economic benefits. Most of the enterprises don't have much accumulative capital, and people's standards of living are rather low. Besides, we cannot require bankrupt enterprises to pay a certain amount of money to their workers,' she said.

China has promised to speed up reform of loss-making state enterprises but has not been ready to deal with the expected army of unemployed which would result from the necessary bankruptcies and lay-offs.

The official media reported last month that a total of more than 1.3 million workers drew unemployment benefits in the first nine months this year, up 34.6 per cent over the same period last year.

Ms Bai said the Government had been very 'prudent' in drawing up the dismissal legislation.

It was difficult to say how many workers were to be affected once this regulation came into effect, she said.

'[The Government] has tried hard to restrict dismissal of workers because other measures to take care of workers' welfare are far from perfect,' Ms Bai said.

According to the regulation, workers who are sick, injured or on sick leave, and female workers who are pregnant, on maternity leave or breast-feeding their babies could not be fired.

The restriction also applies to workers suffering from occupational diseases or those who are injured and have been certified to have lost whole or part of their working abilities.

Ms Bai said laid-off workers would have priority for re-employment if their former bosses recruited new staff within six months of their dismissal.

However, there was no provision for punishment of offenders.

Ms Bai said disputes could be settled by labour tribunals, or finally in court.