The Role that the State Plays in the System of Employment Relations in China

The Role that the State Plays in the System of Employment Relations in China

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The Role that the State Plays in the System of Employment Relations in China

Introduction

Employment relation in China has gone through great transformation since in 1978. In 2008, which is marked 30 years after the great transformation, the country introduced a number of high profile social and labor legislations which included, labor contract law, labor dispute arbitration and mediation law, and employment promotion law. This resulted to three eras in the Chinese labor relation which included pre 1978 era, the era between 1978 and 2008 and bulkpost 2008 era. The Chinese government has employed various efforts to influence the labor market and relation in those 30 years and even after that period. The main purpose of asking this question is to evaluate whether the students understand the role the state has played in influencing the employment relations in China. The question focuses on establishing whether the student can deduce strengths and weaknesses of the role states play to employment relation in China and how these weaknesses and strengths have influenced this relation.

The Laws that Govern Employment Relation in China

The employment relation in China was initially governed by labor law of china that was enacted in 1995. Later in 2008, the country enacted three main employment relation laws that include labor contract law, labor dispute mediation and arbitration law and employment promotion law. The labor contract law primarily demands that all labor relation should contain a written contract. The law demands that any employment relation be formalized by writing in a month period after starts of the work. I penalty is imposed in case this is not observed where the employer is forced to double the employee’s pay in the second month, until when the law is observed. In case the contract is not written within one year of employment, the relation is considered to be open-ended or indefinite automatically. In addition, fixed term contracts are required to be changed to open-ended or indefinite in after the second renewal of the contract. Beside this, the contract must define social security, working hours, remuneration, overtime payment, training, probationary period, and working conditions. It also defines other employees’ benefits as well as dismissal compensations among other things. The mediation and arbitration law gives guidance on how labor disputes should be handled in the country. The law dictates that labor dispute be initially handled by mediation. In case mediation fails arbitration can be enforced and in case that fails the tow-trial system court can be employed. The law also opens arbitration to about all issues. It also extended claim presentation time to one year from 60 days. It also demands that employer present the evidence associated to employment disputes among other provisions (Jing, 2008).

Employment promotion law focuses at enhancing the balance between expansion of employment chances and economic development, and enhancement of social stability and harmony. The law calls upon all Chinese governments that include local, provincial, and national government to treat employment expansion as a major social and economic development objective. They are required by this law to have national social and economic development plan, and to develop long- to medium-term plans, as well as annual working employment promotion plan. The government is also given an obligation to encourage companies in the country to adapt to this law through taxation system. This law also stands against discrimination based on various aspects that include gender, disability, ethnicity, diseases, and place of origin; rural or urban. The law forces the companies to indulge in workers training by setting up training budget, which include continuing education and vocational training based on state provision (Wu & Zheng, 2008).

Labor Relation Laws Enforcement by the Chinese Government

Labor law enforcement in China has been facing problems at first, following higher prioritization of business development an economic growth in the country than labor welfare. However, the Chinese government in the 2008 new labor laws has tried to employ measures that would enhance effective enactment of the law. This include tough penalties for employers who will fail to comply with the law, for instant in the contract law, the employers are required to pay double wages if they cannot give a written contract within one month of employment. The employment contract is also considered open-ended or indefinite in case a written contract is not issued within one year of employment (Zheng, 2009; Jing, 2008).

The law also prolonged claim filing time from 60 days to a whole year to ensure that employees have enough time to present and solve employment related disputes. Opening almost all disputes to arbitration enhanced the employment of disputes mediation and arbitration in labor market. In addition, the law has provided two-trial court for all cases that are not resolvable through arbitration and as a result, providing workers an opportunity to fight for their rights to the highest level possible. To enforce labor empowerment law, the government demand for labor training budget from all firms and ensure this is attain through firms evaluations. It also provides preferential tax treatment to firm to encourage them to employ labor empowerment law.

Despite the government’s effort, the country has not attained the highest level of effectiveness in the enforcement of these laws. The government denies Chinese workers right to form any independent workers union to fight for their rights. The only legal union is the All-China Federation of Trade Unions which comprise of all workers in the country, especially those in formal employment. The law enforcement has still not managed to enhance effective employment of these laws in informal sectors. Employers in China still manages to defy them, and this has recently resulted to increase in the number of labor strikes in the country as workers try to enforce collective bargain to resolve some of the problems they are experiencing in their work place.

The Policy of the Government of China with Respect to Employment Laws

The government of China has enforced People’s Republic of China constitution, the people’s republic of China labor law, among other relevant regulations and laws so as to safeguard the laborer’s employment rights. In this legal structure, the government of China has founded the principle of employment of employees finding their own jobs, the government employment promotion, and employment via market regulation, and implemented and formulated a set of practical employment policies. These policies include macroeconomic policies, financial, fiscal, and taxation policies, creating non-profit public bulkposts, social security policy, and unemployment monitoring policy (Zhu et al., 2011).

The government of China has normally considered employment promotion as a socio-economic development strategic task. It consider job opportunities increase and managing unemployment rate to be among its principal macro management targets and integrates it in its social and economic development plan. It observes the principle of domestic demand expansion, exercises a stable monetary and fiscal policy, maintain a fairly rapid and steady national economy development, active economic structure adjustments, and promoting economic growth motive power in driving employment. In addition to this, both local and central governments of China have established special funds to help and support rural and urban laborers to receive suitable training and to be employed. The governments support unemployed using auspicious taxation policy to realize own business start-up and self-employment, and at simultaneously encourage the absorption of more unemployed individuals in SMS (Freeman & Li, 2013). Social security policy enhances the development of system of social security that is independent of public institutions and enterprises, with diversified sources of funds, socialization in service delivery and management, and security system standardization. Unemployment insurance system was also developed in mid 1980s to offer medical subsidies and relief to unemployed individuals. The unemployment monitoring policy has been employed to ensure comprehensive administrative, economic, and legal measures are employed by the government to control unemployment and to avoid issues such as general rapid unemployment growth, high unemployed concentration in some regions, and the higher long-term unemployed proportion in the total number of unemployed (Di, n.d.).

Policy Change

Before the beginning of 1978 economic reforms, the China labor policy had a clear objective of ensuring employment to every employee. The aim was to litigate via direct job administration, remuneration through administrative control, and migration severe restrictions. Thus, the current Chinese labor regulation structure started to grow in the bulkpost 1978 period of reform. By the mid-1990s, a new labor, employees’ contractual rights, and wages legal framework had been created to replace the socialist system administrative regulation. In 1993, the labor and social security ministry provided the enterprise minimum wage regulation. More essentially, the enactment of 1994 labor law laid down employee’s contraction and legal rights foundation, labor dispute resolutions mechanism, and a collective contracting and consultation system between enterprise trade unions associated to the All-China Federation of Trade Unions (ACFTU), as well as its management (Chan & Nadvi, 2014).

The policy experienced another major change in 2008 where new labor laws were defined. The 2008 policy change was developed based on 1995 labor law, which was created as Chinese government response to the transition of the economy of the country since enactment of reform and open door policy in 1978. The 1995 policy created a high level of redundancy in the country’s state owned enterprises and demonstrated less effect on the painful and unprecedented privatization process in the country, hardly assisting retrenched employees to safeguard their interests and rights. The new policies in 2008 were said to provide a standardized and rigorous process of creating the employment contract by offering effectual precondition legal protection and assistance to Chinese employees (Wu & Zheng, 2008). Thus the new policies changed the employment framework by focusing more on safeguarding interests and rights of workers. These policies changed on employment contractual framework by demanding for written contracts in various cases, fixed-term contracts, severance payment inclusion, elimination of workers mobility obstructions, and agency staff protection. Basically, the novel policy framework tried to tackle various main issues associated to Chinese labor standards, insisting on the workers interests and rights protection. The change also reinforced the social security policy employed previously to promote employment, enhancing more measures which include training and encouragement of private sectors in creating job opportunities. It also enhanced the labor dispute resolution structure in the country. All this created a better workers bargaining ground at individual level (Wu & Zheng, 2008). The policies regarding workers collective bargains have never been changed in the country. According to Ren and Li (2015), the five major changes of the labor policies in China include the modification of the labor contract law, the labor dispatch system changes, the change of the labor laws adjustment range, the dismissal regulations changes, and economic compensation changes.

Why have the Employment Policies in China Changed

The China has often introduced novel labor legislation and policies, whose major reasons include three factors. To begin with from 1994 to early 2000, unstable and short-term labor relations destroyed labor interests and rights. Second the labor dispute cases increase requires labor legislation and policies perfection that are anticipated to effectively regulate labor associations. Another reason for change of these policies is the rapid economic development and the industrial structure upgrading lay a basis for augmenting worker rights. The changes have also been enforced by laborers effort to push for a higher bargaining power in the country. This has been done through independent protection groups of workers. Although the country only permit the operation of one universal labor union; ACFTU, the workers has still managed to strike in various companies and organization pushing for the improvement of their work condition and fighting for better terms of operation (Zhu et al., 2011).

My Perception on Government’s Employment Relations Policy

The current employment relation policy framework has played more attention to the needs and interest of workers in the country. These policies have been structured to ensure that more workers are employed on contract and thus, they have a better legal ground to fight for their rights. The policies have also provided a framework to be followed by the workers while making complains regarding various labor related disputes. This enables them to get their rights while facing different difficulties in their workplaces. Nevertheless, the framework still fails in addressing needs for the employees who are not under contract. Although the framework has ensured that most individuals gets contracts, the level of the labor law enforcement efficiency is still not 100% and thus, there still workers who cannot manage to enjoy the advantages brought about by the new labor policies framework. The main problem with the current labor policy framework is illegalization of private workers unions. The current available labor union is highly controlled by the state and thus, it normally complies with all that the government wants. This means, the labor union cannot assist workers to force the government to stretch further to obtain better and favorable policies since it is highly controlled by the government. The illegalization of independent unions makes it hard for laborers in china to fight for everything they would wish to have. With these restrictions, laborers who do not get opportunity to gain contract and hence to be protected by the law lack the power to fight for their rights and thus, the framework has still failed to represent all laborers in the country. However, the new labor relation policies it has highly enhanced the level of workers protection a great deal compared to the policies that were there before (Allard & Garot, 2010).

Policy Weakness and Strengths

The main purpose of the enactment of the three main employment relation policies in the country was to enhance social harmony and to put the extensive abuse of employees without contracts and thus without rights to an end. These policies extended primary rights to all workers in China, making Chinese labor market to be highly rigid and changed the official work association to standards which are same as those of a number of modern European nations (Allard & Garot, 2010). In addition to this, the policies increased the number of individuals being employed under contract in the country and thus, increasing in the number of workers protected by the law and who can legally fight for their rights in arbitration or trial courts (). The policies have also reduced the level of discrimination in the labor marketing giving particularly individuals from rural areas a better chance to seek and get employment (Majid, 2015). The labor policies are also focusing on enhancing workers collective bargain in the country. More workers can now acquire collective contracts in the country. This has enhanced the growth of social security in the country, providing the workers with better working environment (Lee et al., 2016).

Nevertheless, these policies also have a number of weaknesses. Some of the weaknesses include the fact that the dispute mediation and arbitration framework has increases the number of labor cases to be handled in the country. This has highly straining the judicial resources required to address these claims. The addition of extra duration opens a room for filing of more cases and thus, increasing the judicial pressure. The framework also makes it considerably expensive for companies to fire workers without providing concrete evidence against them. The dismissal payments have also increased (Li, 2011). Other extra operation costs have highly been increased by limitation in overtime payment among other expenses the employers have to pay. This has increased the employment cost and with time reduced the companies’ ability to employ more workers. This has also increased the need to lay-off workers during tough economic time due to lack of the financial ability to maintain them in the firms. Companies also prefer workers dispatched from other agencies other than having them employed to avoid cost associated with people’s employment (Freemand & Li, 2013).

Evidence and Argument

The labor relationship policies have resulted to a number of positive changes in China. According to Lee et al. (2016) 23 million employees were covered in 2011 by collective contracts. This demonstrates the positive impacts of the employed of the new labor contract laws in the country. In addition to that, the country experienced a drastic increase in the number of filed labor related disputes. These disputes increased by 120000 between 2008 and 2009 (Friedman, 2012). The new policies also assisted in reducing labor strikes and enhancement of resolving labor disputes.

References

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