China's New Labour Contract Law: Responding to the Growing Complexity of Labour Relations in the PRC

Abstract:     
China's new Labour Contract Law is the most significant reform to the law of employment relations in more than a decade. Its final form emerged following highly contentious debates over the terms of earlier drafts - debates involving not only a range of Chinese actors, but also international business lobbyists and labour organisations. The Law as enacted represents a compromise between the competing demands of these many interest groups.

This article briefly surveys the reasons for the enactment of the Labour Contract Law, the polarised drafting process, and the key matters it addresses. The assessment presented is that the Law is, overall, a necessary and beneficial contribution to the regulation of work in China. However, the article highlights four areas likely to be subject to ongoing contention and dispute. Those areas concern (1) unilateral changes to working conditions; (2) forms of contracting and termination of employment; (3) labour hire; and (4) non-compete clauses.

Keywords: China, contract, law, reform, employment, labour, work conditions, regulation, hire, termination, non-compete

JEL Classifications: K31

Accepted Paper Series