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Companies to inform govt of layoffs 30 days prior

By Chen Jia (China Daily)
Updated: 2009-02-11 07:43

As layoffs and labor disputes become frequent with the global economic slowdown wiping out more businesses, the central government yesterday told employers to inform trade unions of their plans of mass layoffs at least 30 days in advance.

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If a company plans to layoff more than 20 employees, or over 10 percent of the total staff in one go, it must submit written reports to the local labor and social security department 30 days prior to the action, the State Council said in a statement issued on its official website (www.gov.cn) yesterday.

The State Council emphasized that priority should be given to ensure the legal rights of the employees.

Moreover, employers should not refuse to pay for social insurance as long as the working relations still exist, it said.

Local labor officials should keep a watch on such companies to ensure employers do not flee or postpone wages and insurance payment, it said.

Mo Rong, deputy chief of the labor science research institute under the Ministry of Human Resources and Social Security, said stable employment should be the top priority under the current financial circumstances.

"In the long term, mass layoffs are not good for the development of an enterprise," he said.

The government has launched a series of favorable policies "to either reduce or postpone five types of social security insurance fees to give private enterprises some relief", he added.

"The State Council's notice reiterated the regulation of Labor Law, and it is a good reminder to both enterprises and employers," Li Kui, a lawyer of the Beijing-based Yingke Law Firm, told China Daily.

"But I hope the regulation would be further clarified, as different scales of companies and official organizations that manage layoffs need to be more clear," he said.

Meng Qinghuan, an employer of a Beijing-based fund management company, said he was doubtful if the new regulation would be implemented successfully.

"Some small enterprises have no ability to anticipate the crisis and go bankrupt overnight," he said.