IMPLEMENTING MEASURES FOR LABOUR MANAGEMENT FOR
SINO-FOREIGN JOINT EQUITY VENTURES IN SHANGHAI
MUNICIPALITY (TRIAL IMPLEMENTATION)

(Issued October 8, 1984 by the Shanghai Municipal
People's Government)

 

SUBJECT: LABOR & EMPLOYMENT

ISSUING-DEPT: SHANGHAI MUNICIPALITY

ISSUE-DATE: 10/08/1984

IMPLEMENT-DATE: 11/01/1984

LENGTH: 2699 words

TEXT:

These Measures were formulated in accordance with the Regulations of the People's Republic of China on Labour Management in Sino-foreign Joint Equity Ventures, taking into account the actual circumstances of Shanghai Municipality.

[Article 1] The Shanghai Municipal Labour Bureau is the labour management organ for Sino-foreign joint equity ventures (hereinafter referred to as joint ventures) in Shanghai Municipality.

[Article 2] The labour plan of a joint venture will be decided by the Board of Directors and filed with the department in charge of the enterprise and the Shanghai Municipal Labour Bureau.

[Article 3] Employees required by a joint venture may, in accordance with the labour plan, be recruited from among the unemployed of the urban district or from persons in existing employment and also from the suburbs, Shanghai county and the surrounding rural areas. Should engineers, technicians and management personnel required by a joint venture be unavailable within the Municipality, they may be recruited from other parts of the country following approval from the Shanghai Municipal Labour Bureau. Persons still at school and those who in accordance with State policy regulations cannot be employed may not be recruited.

When a joint venture recruits employees, all must be assessed through an examination and the best selected.

The foreign party to the joint venture may recommend the employment of individual local personnel who possess actual working skills and who meet the joint venture requirements. In such a case the candidate would be exempt from examination.

[Article 4] Employees of joint ventures must be at least 16 years of age. Employees recruited from within the urban area shall have Shanghai Municipality registered as their place of permanent residence; those recruited from Shanghai county and the surrounding rural areas will not change their registered permanent residence; those recruited from other parts of the country will not move their registered permanent residence during their probationary period.

[Article 5] When a joint venture is recruiting employees in accordance with its labour plan, it may recruit employees of its own accord or may ask the department in charge of the enterprise to make recommendations or commission the Shanghai Municipal Labour Service Company to handle the matter.

The Shanghai Municipal Labour Service Company has established branch companies in new districts such as Minhang and Hongqiao in order to supply the new districts with labour service, assist enterprises in the training of employees and other such arrangements.

[Article 6] When existing enterprises in the Municipality go into a joint venture with foreign investors, the original enterprise's workers shall be the first considered for employment by the joint venture and the original enterprise will make arrangements for any not recruited to be employed elsewhere.

[Article 7] Should it be necessary to have a probationary period for employees recruited by the joint venture, in general this may be between three and six months. Where a person does not meet the standards required, the probationary term may be extended or the person returned to his original place of employment.

The joint venture shall adopt numerous methods to train employees in technology and work skills.

[Article 8] Joint venture employees will, without exception, follow the labour contract. The labour contract term will be determined in accordance with production or work requirements. The joint venture may, in accordance with production or work requirements, sign labour contracts of differing terms with the venture's trade union or individual employees. The contents of the labour contract will be decided by discussion between the joint venture administration and either the trade union or individual employees, in accordance with the Regulations of the People's Republic of China on Labour Management in Sino-foreign Joint Equity Ventures and these Measures. Once a labour contract has been signed both parties must comply with it. Should one signatory to the contract require amendments to be made, the approval of both parties must be obtained. The labour contract shall be filed with the department in charge of the enterprise and the local district (county) Labour Bureau.

[Article 9] Should changes occur within the joint venture during the term of the labour contract due to production, management or technological factors, thus creating a surplus of employees and there be no way to arrange for their allocation to other work sections, dismissals may be carried out following consultation with the enterprise's trade union. However, employees must be given one month's advance notice of their impending dismissal and the relevant date should be filed with the department in charge of the enterprise and the district (county) Labour Bureau. During the labour contract term employees convalescing due to on-the-job injuries or work-related illnesses or female employees on pregnancy or maternity leave may not be dismissed.

In the case of employees who have not reached retirement age but do not have their contract renewed, the joint venture shall, in accordance with the length of their term with the enterprise, issue a termination payment of the equivalent of the individual's monthly wage for each full year of employment; for terms in excess of ten years, starting from the 11th year a termination payment of the equivalent of the individual's wages over one and a half months is to be paid. The joint venture shall pay compensation of the equivalent of between three and six months wages to those employees who have been dismissed during the contract term, in addition to the termination payment.

Employment arrangements for those employees who resign upon the expiry of the labour contract or who are dismissed during the contract term will be determined separately by the Shanghai Municipal Labour Bureau.

[Article 10] Employees of a joint venture may submit their resignation to the enterprise during the contract term if they have appropriate reasons. The enterprise may approve the resignation if there are no practical difficulties. However, where the enterprise has paid for an employee's training during the contract term, the employee will compensate the enterprise for the training expenses in accordance with the provisions of the labour contract.

In cases where employees have been granted permission to resign, the joint venture will only issue a termination payment and will not pay compensation. Calculation of this particular termination payment will not include the number of years of employment fulfilled during the contract period.

[Article 11] The average actual wage level (including basic wage, allowance and incentive awards) for ordinary employees of a joint venture will be set at at least 120% of the average actual wage of employees in similar State-operated enterprises in Beijing and in future this will be increased gradually in accordance with production and operational conditions, the degree of technical proficiency of the employee and increases in labour efficiency. If the enterprise incurs losses due to production or operational difficulties, it may consult with the enterprise's trade union and lower the employees' wage level by an appropriate extent.

The wage level, the wage form, incentive awards, allowances, etc., for the employees of a joint venture will be determined by the Board of Directors.

[Article 12] Each month the joint venture must pay an amount equivalent to 30% of the total actual wage of currently employed Chinese staff to the Shanghai Municipal People's Insurance Company (hereinafter referred to as the Insurance Company) by way of the employees' old age pension insurance fees. After retirement, an employee's retirement pension, medical expenses, funeral expenses, together with pensions for the family of a disabled or deceased employee will be paid by the Insurance Company in accordance with the criteria applied to State-owned enterprises.

[Article 13] The joint venture shall bear the costs of currently employed staff and workers' medical expenses for illnesses and injuries due to reasons other than on-the-job factors, as well as living expenses in cases where the convalescence period is in excess of the sick-leave term stipulated by the enterprise, living expenses for those who due to illness or injury have permanently lost their ability to work, funeral expenses and pensions and medical expenses for the families of disabled or deceased employees.

The joint venture shall also be responsible for all employees' medical expenses due to on-the-job injuries or occupational diseases, as well as lump sum compensation payments for the partial loss of employees' working abilities resulting therefrom, or living allowances for those who have entirely lost their ability to work, as well as funeral expenses and pensions for the families of employees killed in on-the-job accidents or through reasons associated with their on-the-job commitments.

With regard to all of the expenses stated in the above two paragraphs, the joint venture may also take out separate health and accident insurance for its employees with an Insurance Company. Where a joint venture covers its employees with health and accident insurance, it shall pay the Insurance Company monthly health insurance and accident insurance premiums equivalent to 10% and 8% respectively of the total actual wages of its Chinese employees.

[Article 14] With regard to the standard of premiums for various insurance items paid by the joint venture to the Insurance Company, following the approval of Shanghai Municipal People's Government, the Insurance Company may make necessary adjustments in accordance with the actual condition of payments. However the period between each readjustment may not be less than two years.

[Article 15] All joint ventures established in Shanghai Municipality, in accordance with the number of their Chinese employees, shall pay the Shanghai Municipal Finance Bureau 30 yuan per person per month to cover the price subsidies provided by the State for such items as grain, oil, supplementary foods and fuel, as well as an average of 30 yuan per person per month to cover the housing subsidy.

In the wake of changes by the State to the price subsidy structure, joint ventures must make corresponding adjustments to their payments to the State with regard to these employee subsidies. A notice checked and ratified by the Shanghai Municipal Labour Bureau will be circulated annually.

[Article 16] Where the joint venture constructs or purchases housing for its employees it may, in accordance with the number of Chinese employees who will live in this self-constructed or purchased housing (not including those living in single-person dormitories), subtract the corresponding number from the total number of Chinese employees upon which the joint venture payments to the State to cover employee housing subsidies are calculated.

Where joint ventures established in new districts are momentarily unable to provide the required number of single-person dormitories and family housing, the enterprise may purchase or lease housing from development companies in the new district. Following housing for employees being purchased or leased in this manner the joint venture may subtract the number so housed from the total number of Chinese employees upon which the joint venture payments to the State to cover employee housing subsidies are calculated.

[Article 17] Normal welfare expenditure such as for meals, kindergarten expenses, transport allowances, home leave expenses, etc., for Chinese employees during their period of employment with the joint venture is the responsibility of the enterprise and will be paid in accordance with actual conditions.

[Article 18] Where a joint venture's labour welfare payments for its employees are higher than the standard stipulated in these Measures, the joint venture's Board of Directors may decide the amount and have it filed with the Shanghai Municipal Labour Bureau.

[Article 19] The incentive award fund and the welfare fund financed by the joint venture from its after-tax profits must be used for employee incentive awards and collective welfare. The welfare fund will be turned over to the collective employee body and will be administered by the trade union following consultation with the joint venture over its use.

[Article 20] Wages and remunerations for senior Chinese administrative personnel and technical personnel, together with such matters as recruitment, dismissal, resignation, remuneration and welfare payments as regards foreign and Hong Kong, Macao and Taiwanese employees will be decided by the joint venture's Board of Directors.

[Article 21] A joint venture shall formulate employee award and penalty measures in accordance with its actual circumstances. Should an employee violate the enterprise's rules and regulations the joint venture may, in accordance with the severity of the case, issue criticism and re-education, impose disciplinary measures or carry out immediate dismissal. When taking disciplinary action against an employee the joint venture must seek the opinion of the trade union and allow the employee in question to defend himself. The dismissal of an employee must be reported to the department in charge of the enterprise and the District (Provincial) Labour Bureau for examination and approval and the details filed.

[Article 22] Joint ventures will implement an eight hour working day and a six day working week, while working hours in the case of special types of work will be decided by the particular enterprise itself. Should production or work requirements necessitate extra shifts or extra hours to be worked, overtime pay shall be given separately.

The employees of a joint venture are entitled to the official public holidays of the People's Republic of China, as well as holidays for visiting relatives, marriage, bereavement, childbirth or making family planning arrangements, etc.

[Article 23] Joint ventures must implement Chinese government legislation on labour protection, environment protection and special protection for women employees and must have special people in charge of labour protection and production safety. Should on-the-job casualties, serious poisonings or other accidents involving employees occur within the enterprise, the matter shall be reported immediately to the department in charge of the enterprise, the Shanghai Municipal Labour Bureau and the Shanghai Federation of Trade Unions and investigations and handling of the affair by the three above-mentioned bodies will be accepted by the enterprise.

The joint venture shall issue employees with labour protection equipment and supplementary health foods in accordance with actual production or work requirements.

[Article 24] Should a labour dispute occur between the joint venture and employees, the enterprise and the enterprise's trade union shall first try to resolve the issue through consultation; should this fail one party or both parties to the dispute may request arbitration from the Shanghai Municipal Labour Bureau. Should either party fail to obey the arbitration decision the case may be filed with the Shanghai Municipal People's Court.

[Article 25] These Measures are applicable to Sino-foreign joint equity ventures, Sino-foreign co-operative ventures and foreign and overseas Chinese businesses established in Shanghai Municipality. Joint equity and co-operative joint ventures invested in and established by Hong Kong, Macao and Taiwanese businessmen in Shanghai Municipality may be implemented with reference to these Measures.

[Article 26] The right of interpretation of these Measures lies with the Shanghai Municipal Labour Bureau.

[Article 27] These Measures shall come into force on November 1, 1984.