China Employment Law Update - February 2010
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Baker & McKenzie
[Excerpt] At the start of the new year, Shenzhen authorities announced that in 2010 they will pick 120 companies from the Global Fortune 500 and China Fortune 500 that have operations in Shenzhen, and push for collective bargaining within these companies. The focus will be on setting minimum wage standards and guaranteed wage increases within the companies. On January 18, a draft set of collective bargaining regulations was submitted to the Shenzhen People’s Congress for review. Most significantly, these draft regulations provide that if an impasse occurs in the collective bargaining process and cannot be resolved by the parties amicably, either party may apply for binding labor arbitration on the issues causing the impasse and the arbitration panel must decide on the issue within 15 days of receiving the application. This is similar to what unions in the US are pushing for in the Employee Free Choice Act. Other significant provisions provide that companies with more than 300 employees must sign collective contracts with employees. Because Shenzhen is often at the forefront of legislative developments in China, if the draft regulations are passed in their current form, it is likely that local governments in other major cities and provinces may follow Shenzhen’s lead and adopt similar measures.
Baker & McKenzie; China; employment law
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