Managing human resources is always a complex field. HR professionals in any organisation need strong professional knowledge and flexible working skills to be successful. However, with several new laws recently introduced by the Chinese government, such as the Labour Contract Law, Rules on Annual Paid Vacation and the Labour Disputes and Arbitration Law, I am sure many of you will have had a few extra headaches. All of these laws place emphasis on the protection of the legal rights of workers. This means that protecting the interests of their organisation has become increasingly difficult. HR professionals across China need to act to help their organisations comply with these laws and to balance the rights of their employees with the direction of their employer. Below are some pieces of advice of advice on how you can do this.
Establish ‘perfect’ and ‘effective’ rules and regulations
Although the laws listed above place emphasis on protecting the interests of staff, enterprises are still entitled to establish rules and regulations to manage those staff. The new labour laws stipulate that if an employee breaches their employer’s rules and regulations, the employer can revoke the labour contract. However, they also state that the organisation must establish a concrete standard in their rules and regulations. This means that if the rules and regulations are not clear and perfectly defined, the employer may lose the opportunity to discipline a troublesome employee.
Creating a set of ‘perfect’ rules and regulations is a great first step. However, it is vital that you make these rules effective in your workplace. The key here is to establish a clear dialogue with employees to ensure that they are 100% aware of all applicable rules. If you fail to do this, you could face the nightmare scenario of errant employees avoiding disciplinary proceedings because they were unaware of the appropriate rules.To prevent this type of situation, if your organisation formulates or revises rules that have a direct bearing on the interests of your employees, you must discuss those rules with an assembly of staff representatives and then confirm them through negotiations with the appropriate labour union or a team of staff representatives. When all this is tied-up, you must then announce and distribute a final copy of your new regulations to every employee within your organisation. Even after all this, be sure to keep meeting minutes from your discussions with staff representatives and labour unions to maintain the transparency of the whole process.
Pay more attention to new employees
If your organisation hires a new employee, you will naturally gather as much information about that person as possible. However, with the increased scrutiny brought by the new labour laws, this process becomes even more important. Your organisation has the right to know any basic information about your new employee that directly relates to their labour contract. If the employee fails to inform you truthfully of any relevant information, this deception constitutes contract fraud and the contract is invalid.On the flipside to this, you also have to be clear and truthful. Your organisation must inform your newest members of the content of their role, the working conditions, the work-site, occupational hazards, production safety conditions, labour remuneration and any other conditions about which he or she enquires. Just as with your employee, if you withhold any information or provide misinformation, the contract can become invalid. As with establishing your rules and regulations, you must keep transparency in this process. Ensure you keep files detailing exactly how and when you informed your new team members of the relevant information regarding their role and your organisation. Also, hold a file detailing the information your employee provided you on their education, work experience, terminations by other employers and any non-competition obligations. Ask your new employee to also provide all related documents and establish that providing misinformation could lead to the revocation of the contract.
Create standards for probationary periods
Many organisations work under the assumption that it is easy to revoke a labour contract during a probationary period if they feel the employee does not meet job requirements. For many, this acts as a safety net against hiring the wrong employee. This process has worked well in the past for many organisations. However, with the new Labour Contract Law the process may not be so smooth.Now, if an enterprise revokes a labour contract during the probationary period, it must explain the reasons behind this to the employee and it must be able to prove before arbitration that the employee did not meet the recruitment requirements. Therefore, your organisation needs to needs to establish concrete requirements for new employees to meet. You must establish working levels that employees must achieve in each phase of their probation period and develop an assessment system to help establish if they reach the required standard. If, then, a staff member fails to meet your requirements, you have the basis upon which to revoke the contract.
Consider the length of labour contracts
The new Labour Contract Law came into place on January 1 and brought with it some new considerations in regards to long-term employees and their contracts. Now, after an employee completes two fixed term labour contracts for an organisation, he or she is then entitled to a contract with no fixed term – a ‘contract for life’. This means that - apart from under exceptional circumstances - that contract will run until the employee retires and starts to receive his or her old age pension. Regardless of an employees capabilities, offering a contract for life is a major investment, one from which you cannot back-out. This means that you need to pay attention to the length of contracts you offer. For those illusive employees who boast all the right qualifications and experience to shine within your organisation, you need to consider longer fixed-term contracts. This means that not only will you tie them to your organisation for the long-term, but you also do not need to worry about a contract for life until well into the future.
Think about how to deal with underperformers
The Labour Contract Law protects employee rights in terms of their position and salary. This means that if you face the problem of a failing employee you must be very careful where you tread. It is no longer possible simply to move the employee to a lower position and lower salary. Instead, the law stipulates that work content and salary must be clear in the employees’ labour contract. Therefore, if you do remove an employee from a particular role, they have the opportunity for recourse.
To maintain your employees’ legal rights and to give your organisation room for manoeuvre when it comes to under-performing employees, you must include extra clauses in their contracts that stipulate that your organisation has the right to change their role depending upon the needs of the organisation and, most importantly, the performance of the employee. In addition to this, establish clear standards that determine whether or not your employee is performing to the required level. This way, if an employee does under-perform, you can change his or her role – and perhaps also salary – within the legal confines of their contract.
In the last issue of Network HR, Allan Nee of Baode Law in Tianjin wrote a detailed and insightful article about the ways in which your organisation needs to adapt to China's new Labour Laws. Allan offered a myriad of fantastic advice. However, there was one factor he mentioned that really captured my attention - transparency.Read More
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months ago after I was invited to present at the ‘Corporate Travel and Technology
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provided some months earlier, giving me time to source opinions from
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