The Provisions on Guangdong Enterprises' Collective Contract (the "Provisions") were issued on 25 September, 2014 with an aim for concerned parties to operate the entire process concerning collective bargaining and collective contract under a pragmatic and enforceable mechanism. They are notably compared to the applicable legislation on the same subject in Shanghai, Beijing and Shenzhen for the clearer and more effective procedural design for employees to start the collective bargaining process and for the stipulation on legal consequences following certain forbidden behaviour by both employers and employees. The Provisions are also featured with a multi-layered resolution mechanism for any dispute arising in the course of collective bargaining.
The Provisions may be viewed as a synergised move with the central government's recent resolution that 80% of all employers in China shall have established collective bargaining mechanisms by 2015. This may indicate that the Chinese government is making an effort to leverage collective bargaining and collective contract to improve employees' wages and welfare benefits and, on the other hand, alleviate the tension between employers and employees in order to lessen potential strikes and other forms of collective employee actions. The Provisions will be effective from 1 January, 2015.