A new law governing employment in China is a minefield for Hong Kong and foreign companies not conversant with its fine print, a leading legal expert warns.
Andreas Lauffs, head of the employment law group at Baker & McKenzie and a partner with the firm, urges company chiefs and human resources staff to look closely at the Employment Contract Law effective from January 1 and enact strategies to comply that will best benefit them in the long term.
'Many things are still unclear and people are still waiting for implementation guidelines to be produced, but dates for their release have been continually pushed back,' Dr Lauffs said.
'It's a sensitive area because the whole world is looking at this law. It affects foreign investment in China in the future, and it affects China's future as the factory of the world.
'There is also a huge expectation in China among workers for the positive changes they want this law to bring. There were 191,000 submissions from the public during a consultation period in April last year, which is itself unprecedented.'
Dr Lauffs said the major changes were twofold. First, employers would lose flexibility over the workforce mostly related to their ability to reduce numbers when necessary, or move people in and out.