In response to the economic crisis, three Chinese agencies jointly issued the Guiding Opinions on Dealing with the Current Economic Situation and Stabilizing Employment Relations on January 23, 2009. The purpose of the Opinions is to reduce the influence of the worsening global economic situation on labor relations.
The agencies that issued the Opinions, namely the Ministry of Human Resources and Social Security of the People’s Republic of China, the All China Federation of Trade Unions, and the China Enterprise Confederation/ China Enterprise Directors Association (together, the Three Parties), were concerned about the high number of layoffs that have recently occurred in China, especially in labor-intensive, small- and medium-sized enterprises.
The Opinions are not legally binding and only provide general guidelines for the Three Parties to assist them in reaching their goal of stabilizing employment relations. The Opinions encourage enterprise federations to lead enterprises in positively responding to the financial crisis by enhancing management and promoting innovation. Furthermore, the document promotes training, rotation of duty shifts, and negotiations of shifts and wages in order to prevent more layoffs. The Opinions also call upon trade unions to lead workers in supporting companies that seek to establish flexible hours, being open to training programs and wage negotiations, and proposing solutions to problems that companies face.
The Opinions suggest that enterprises establish a collective consultation mechanism and implement a collective contract system for the negotiation of wages that would be jointly formulated by workers and management. According to the Opinions, enterprises with normal production and operations should agree on a reasonable wage standard. Enterprises experiencing difficulties in production and operations, on the other hand, are urged to be flexible in negotiating employment, work hours and wages, and to develop training programs. Moreover, the Opinions call upon the Three Parties to enhance the guidance and management they provide to financially-troubled enterprises contemplating layoffs, especially with respect to formulating layoff plans that comply with the law. The document also advises the Three Parties to inspect the salary disbursements of enterprises and to improve the back-pay report mechanism, in which such reports are made to the local Human Resources and Social Security departments.
The Opinions emphasize that laws and regulations, including the PRC Labor Law and the Labor Contract Law, shall always be followed in any action that enterprises and employees take, especially in situations where an enterprise plans to layoff employees due to financial difficulties or where there is a dispute regarding wages in arrears. For example, the document requires relevant parties to comply with laws when dealing with disputes in connection with defaults in the payment of salaries, and provides them with the option of requesting preferential enforcement from the relevant courts whenever necessary.
Finally, the Opinions advocate for the establishment of a system of communication and coordination relating to the settlement of significant labor disputes. The document also calls for cooperation within the Three Parties to protect the rights and interests of enterprises and employees, and to stabilize employment relations.
Since the announcement of the Opinions, local governments have issued numerous policies to mitigate the burdens that have fallen on local enterprises, set up training programs for employees, and taken measures to create new employment opportunities.