Strengths and Weaknesses of PRCs Labour Relations System in China - Case Study Example

Name: Professor: Institution: Course: Date: Table of content Table of content 2 1.0 Introduction 3 2.0 Overview of PRC’s Laws 3 3.0 Strengths of PRC’s labour Relations system 4 4.0 Weakness of PRC’s labour Relations system 6 5.0 Recommendations 9 References 11 1.0 Introduction The labour laws in the Republic of China have gone through several changes in an attempt to create a work environment where job satisfaction, fairness and job opportunities exist. Some of the most recent law as that were enacted in 2008 include the labour contract law, the Employment promotion Law and Arbitration law. The great effort of the state to have the legislation so as to ensure fairness in the labour market is recommendable. However, there are a lot of issues that need to be considered in regard to the effect of labour relations system for both the Republic of China as well as the global workplace. As the chief advisor of the ILO group, I will identify the loopholes in China’s labour relations system and recommend some solutions to improve these systems. This report will identifies the strengths and weaknesses of the existing labour systems in the People’s Republic of China as well as give some recommendations of how these weaknesses can be fixed. 2.0 Overview of People’s Republic of China labour laws For several years, People’s Republic of China was under a planned economy system which favoured a socialist-style labour management system. Employees used to enjoy a very high and political status. Since 1979 People’s Republic of China began to pull down the planned economy. The labour relations system has been undergoing several changes and in the past few years, the ministries and China’s National People’s Congress (NPC) have increased their efforts to put in lines the labour laws and regulations so as to lessen the gap between the People’s Republic of China’s labour standards and those of the rest of the world. The three laws that govern China’s labour laws are the statutory laws, international laws and administrative laws and most of these laws were adopted over the last two decades. China als entered into World Trade Organization (WTO) which has increased pressure on the country to comply with the International Labour Standards (ILO).The International Labor Organization (ILO) is a globally recognized institution which is involve in formulating international labour standards. Over the past years, ILO has been able to adopt atleast170 international conventions and through these conventions, the institution has been able to formulate a set of basic labor standards which include equal employment opportunities, safe working conditions, freedom of association and gender equality. Of these conventions People’s Republic of China (PRC) has joined 23 of them and of the 23 the government of People’s Republic of China (PRC) only joined nine of them. The other conventions were ratified during Republic of China (ROC) era before 1949 but they were honoured later on by People’s Republic of China (PRC) (Belzer & Wie, 2008). 3.0 Strengths of labour system of the People Republican of China Chinese employment system is based on a Northern Europe and Asian unlike model and its labour system is quite different from the U.S system. U.S uses an employment at will system which that means that employers can fire employees at any time for any reason. However, china’s system is quite different as it is a contract based employment system. This means that all employees must have a written contract with their employers and this means that employers can not just terminate the services of that employee as that would amount to bleach of contract. An employer can only fire an employee for a cause and that cause most be clearly approved as stipulated in the written contract. This means that the employers have to lay down rules and regulations and maintain a discipline record for the employee to establish a genuine ground for dismissing the employee. This means that employee in China are assured of job security as long as they don’t breach the contract (Asia Monitor Resource Centre, 2006) . Also in China, there is no concept of “salaried” workers. Employees in China work for 40 hours and any overtime has to be paid for any work that exceeds 40hours. This means that employees are not exploited. Also employees in China enjoy better protection as compared to the US workers. All employees in China who work in the urban area have a Universal Health Insurance Policy. Under this scheme, health care services are provided to all employees and the scheme is paid for by the contributions of both the employees and the employers. Chinese employees also enjoy a three one-week national holidays to celebrate the National day, the International Labour Day and the Chinese New year. Should there arise a need for the employees to work over the weekend, the employers will have to be remunerated twice of the irregular daily wages. Also, if there is a need for the employee to work during the national holidays, then the employee must be paid three times of their regular wages. Moreover, the Women’s equal rights are better implemented in China. Women’s participation in the labour market is about 49 % which is higher than the world average 34.5%. Women in China make up 80.4% of the total men’s income (Brown, 2010). The social stability in China has also favoured its Labour relations system. So as to ensure social stability, the China government has enacted labor’s political rights. In the Chinese constitution, Article 35 removed the labour’s rights to strike for account of wages. Inorder to resolve labour disputes, Chinese employees have to seek compulsory arbitration to resolve these disputes before they can file a law suit. The Chinese government also prevented multiple and independent unions to be structured in the workplace which means that the employee freedom of association is limited something that is a key component in the ILO conventions. It has been reported that the labour unions have been arrested for attempting to organize strikes or unions (Clarke, Chang-Hee & Qi Li,n.d). The WTO has had a significant change on Chinas labour laws. So as to comply with the requirements of WTO, China has had to do away with over 2300 laws, modify 325 and abolish 830 laws so far. Although the country has demonstrated a great determination to promote transparency and openness, critics say that the country has not yet done enough to ensure protection of labor political rights. From the problems that have been experienced as the country is implementing the existing labour laws, one can say that China’s labour relation system look good on paper but .many of these systems have been ignored or are not adhered to strictly. Although lack or delay in implementation of the labour laws have interfered with China labour rights, China has made a great step as far as codification of the labour standards is concerned. Many employers have complained of as they try to negotiate with employees as the employees are well conversant with their rights which are guaranteed by the labour laws (Ding,Goodall and Warner2002), . 4.0 Weaknesses of labour system of the People Republican of China Rapid economic developments have resulted to a lot of environmental issues, income disparities and even industrial sectors restructure. At the same time, the labour intensive production is gradually changing to high-order production. According to a research conducted in 2004, workers employed in the agricultural sector accounted for 50% while those working in the service sector amounted to 30% of all the employees and the industrial sectors amounted to 20% of all the workers. The increasing need for the companies to be globally competitive and embrace technology has increased the need to have manually skilled workers, administrative personnel and technicians. This means that the connection between training of employees and the economy of China. However, as a result of underdeveloped vocational education systems in China, the qualification requirements of the skilled labourforce has increased greatly and as a result, there have been many problems in the labour market. For example, the demand for the qualified and trained employees is high above the supply. The quantity as well as the quality of the labour force is far below the demand of the labour market. Currently, there are about 70,000,000 skilled employees in the People’s Republic of China of which 60% are semiskilled, 35% are intermediate workers and only 5% re qualified workers. The low qualified workers have led to to low productivity. Currently, the productivity of each employee in china accounts for only 1/26th when compared to Japan and 1/25th as compared to USA .The figure below shows a comparison of the qualification structure of skilled workers in China (Schnarr , Yang & Gleibner,2008) According to Harris (2010) employers always discriminate workers on the basis of several things including race, obesity, gender, ethnicity, age, religion, looks, sexuality and even race. However, a wise employer who is willing to take get the best employees from a pool of employee does not discriminate. However China’s labour market has been woefully inefficient in relation to fair employement and the foreign companies are well aware of this and are taking advantage of this situation. A survey that was conducted in 2010 about employment discrimination in China indicated that job discrimination is still being experienced in china. The research which was a survey of 3454 people in ten cities including Guangzhou, Shenyang, Xi’an, Zhengzhou, Qingdao, Wuhan, Yinchuan, Nanjing and Beijing and conducted by China University of Political Science indicated the following: 86% of the respondents said that discrimination still existed in Chinas’s labour market 51%of the respondents found employment discrimination to be a serious shortcoming of China’s labour system 22% of the respondents indicated that they had been denied employment opportunities due to their physical disabilities 19% of the respondents indicated that they had been denied jobs as a result of their low academic qualification 19% of the respondents indicated that they had been denied jobs since the residence where they were registered was not the same as the city where they were job hunting (Harris,2010) The research indicated that the discrimination was more common in government offices with appearance, gender, height and registered residence origin being recorder as the four most frequent form of discrimination. The research further indicated that 63 % of the employees said that they would not offer job opportunities to HIV carriers, while 56 % of the employers indicated that they would not employ hepatitis B carriers and 53 % of the employees said that they would not employ any patient who was suffering from a venereal disease. From the research, it is clear that despite the labour laws, discrimination is still a major shortcoming to the labour system of China. Some of the common issue that are reported as regards to abuse of labour rights include unfair labour contracts, wages and pension arrears, discrimination, illegal use of under aged children as workers and sweatshops. Workplace safety has also been reported to be a big shortcoming (Harris,2010) . Recommendation From the analysis of the People’s Republic of China (PRC) labour relations system above, the country has been making significant efforts to meet the standards of the International Labour Organization (ILO). However, there is need for the country to work on the following issues Discrimination- from the analysis above, despite changes in the labour law, there is still a problem of discrimination on the basis of gender, age, race, academic qualification, religion and other basis. There is need to amend the labour laws so as to ensure that there are clears laws of preventing employers from discriminating employees on any basis. Penalties and legal action should be taken against any employer who is found to be discriminative. Freedom of association-there is need for the labour relations system to allow the employees freedom of association through joining labour unions. The labour laws should allow for formation of trade unions which will ensure that the employees are well represented in case of labour disputes between the employer and the employee. Labour unions will also assist the employee in collective bargaining and arbitration when need arises. Review the education curriculum-there has been a challenge in getting skilled employees. There is need for the education sector to review the curriculum to cater for the changing market needs. there is also need for employers to give continues training to employees so as to keep them at par with the changing technology Improve workplace safety- there is need to improve the safety of workers in the workplace which will make the employee feel protected and safer in the workplace Enforcement of the labour laws-there is need for the labour laws to be enforced entirely. This will ensure that employment relationship is respected and that both the rights of the employer and the employee are adhered to. References Asia Monitor Resource Centre (2006)Report on Industrial Relations and Working Conditions in IMF related TNCs in China Commissioned Retrieved on 29th May 2012 from http://www.imfmetal.org/files/07050810105979/IMF_china_report_EN.pdf Belzer M. H & Wie P.S (2008) Industrial relations experiments in China: Balancing equity and efficiency the Chinese way Retrieved on 29th May 2012 from http://web.mit.edu/is08/pdf/ChineseIRExperiments.PDF Brown R.C (2010) understanding labor and employment law in china Retrieved on 29th May 2012 from http://primeimaginary.net/glittertine/BROWN%20-%202010%20-%20Understanding%20labor%20and%20employment%20law/Brown%202010%20Inhaltsverzeichniss.pdf Clarke S, Chang-Hee L& Qi Li (n.d) Collective Consultation and Industrial Relations in China Retrieved on 29th May 2012 from http://homepages.warwick.ac.uk/~syrbe/pubs/CollectiveConsultation.pdf Ding, D. Z., K. Goodall and M. Warner (2002), ‘The impact of economic reform on the role of trade unions in Chinese enterprises.’ International Journal of Human Resource Management 13(3), pp. 431-49. Harris D (2010). China Employment Contracts. Ten Things To Consider. Retrieved on 29th May 2012 http://www.chinalawblog.com/2010/04/china_employment_contracts_ten.html Schnarr A, Yang S & Gleibner K (2008) Vocational Education and Training and the labour market- a comparative analysis of China and Germany Retrieved on 29th May 2012 http://www.unevoc.unesco.org/fileadmin/user_upload/pubs/VETandLabourMarket.pdf Harris D (2010). China Employment Contracts. Ten Things To Consider. Retrieved on 29th May 2012 http://www.chinalawblog.com/2010/04/china_employment_contracts_ten.html Read More