THE US-CHINA BUSINESS COUNCIL
US China Business Council
Comments on the Draft People’s Republic of China Law on Employment
Contracts (Draft of December 24, 2006)
The US-China Business Council (USCBC) fully supports a reasonable and balanced Employment Contract Law and appreciates the opportunity to provide comments on the revised draft Employment Contract Law of December 24, 2006 (“Draft Law”). We believe this opportunity to comment illustrates the PRC government’s effort to provide more openness and transparency in the formulation of policy and legislation.
USCBC represents 250 US companies that are actively engaged in doing business across all industry sectors.We believe our member companies operating in China have contributed positively to the development of
employment policies and practices over the past two decades. This experience has been very helpful as we formulated these comments on the Draft Law. We hope these comments will prove constructive and useful.
The revised Draft Law makes significant improvements to the previous draft and strengthens protections for both employees and employers. We respectfully submit that a few provisions may benefit from further
clarification or revision to ensure that the interests and obligations of all parties are adequately balanced.
PROBATIONARY PERIODS
Article 21 of the existing 1995 Labor Law demonstrates that PRC lawmakers recognize the importance of having a probationary period of suitable length for both employee and employer to evaluate fully the suitability of the work relationship. Certain provisions in the current Draft Law will restrict the utility of the probationary
period, and possibly make employers more cautious in recruiting and hiring new employees.
