Did you say “Occupational Safety”?
August 16, 2009 by Chinatex
Y’all might have read about the town in Hunan province where it was recently discovered that at least one factory had been polluting the ground, water and air so badly that people were actually dying as a direct result of the pollution. As China continues to develop and evolve there will undoubtedly be more of these stories – similar to our Love Canal in New York state in the 1970’s where 21,000 tons of toxic chemical waste was buried. Anyway, it seems that this recent event in Hunan province has given the government good reason to look at and implement some new measures on occupational hazards and safety. While this is probably good, nobody knows what the law means or how far the government or local governments will go to enforce the law. Please notice that in the the article below it doesn’t just mention “polluting factories” but also “businesses”. Remember with the labor law how Old Chinatex told you that the ambiguity in the law was one of the ways that the burgeoning legal trade here in China was going to find sources of revenue. Looks like this new regulation will be a bonanza for disgruntled employees, competitors and hungry lawyers. Yee ha!! Chinatex
Companies now required to monitor workplace hazards
(China Daily)
Updated: 2009-08-14 09:33
Beginning next month, Chinese businesses and factories that violate occupational hazard regulations will be shut down and face a maximum penalty of 300,000 yuan ($44,000).
“If an employee’s health has been affected by dust, toxic substances and other harmful factors during occupational activities, those harms can be defined as occupational hazards,” according to a temporary provision released recently by China’s work safety watchdog.
The provisions were formulated by the State Administration of Work Safety (SAWS). SAWS is in charge of monitoring and inspecting work safety practices, halting work hazards, issuing licenses, investigating accidents and stopping illegal work practices.
Businesses and factories should faithfully inform employees about possible occupational hazards and their consequences, and provide occupational hazards prevention knowledge training. Also, employers are required to give their workers necessary health checkups. They also should buy protective gear for employees working around hazards and ensure that equipment remains safe and in good repair.
Businesses that violate the provision will receive a warning from SAWS, ordering them to correct the practice within a time limit. Enterprises that do not correct the problem within the time limit will be fined 20,000 yuan.
Businesses that seriously violate a relevant law, regulation, or industry standard, causing grave damage to employees’ life and health, will be closed and required to pay a fine of between 100,000 and 300,000 yuan.
Moreover, companies are obliged to report any occupational hazards in construction projects to their local work safety department. They also must periodically monitor work safety procedures and make reports to the department. Occupational hazards should be monitored at least once a year, and be evaluated at least once every three years.
Chinese Court et al.
August 13, 2009 by Chinatex
It’s been a slow and steamy summer here in the Pearl River Delta. Anytime I think of Delta’s: Mississippi, Me Kong, Delta Dawn, I think of humidity and other things. It’s been all of those here recently but it hasn’t slowed down the pace of business or life in Southern China. On a non legal note, it doesn’t seem like the world is in a recession when you walk around here. People are moving and spending money and buying stuff like crazy.
Onto a legal hodgepodge from the Delta:
1. Stay away from Court in China (or anywhere else for that matter).
Old Chinatex had an opportunity to attend a hearing in the Shenzhen Peoples Court the other day and it was once again an interesting experience. As I always tell y’all “stay out of court at all costs”. Even in China, the only ones who win in court are the lawyers – who conveniently get their fees paid up front. Anyway, I was observing a hearing between a Chinese national and a foreigner and although the result seemed to come out fairly, it didn’t seem to be based upon law, precedent, logic or much else. I also don’t think the foreigner thought it came out fairly. The judge was basically a mediator and he listened to both sides of the story, then he met with both sides separately and after a few hours in a hot and steamy court room, he issued his order. My advice to y’all is to make sure that you have everything in order so that you don’t need to go to court. How many times do I have to hear about the foreigner who trusted his Chinese factory or partner and then ended up with an expensive lesson. Have agreements and do things legally and you will undoubtedly avoid court.
2. The taxman striketh again.
I’ve been telling y’all how our governments are all broke and printing money and that the only way to even attempt at lowering the deficits is to get back lost tax revenues from citizens and corporations operating offshore. You can see my previous blawgs for more information. Well, seems that the UK government just reached an agreement with Liechtenstein to end banking secrecy which will undoubtedly churn out substantial tax bills to UK citizens who have been legally keeping their money in Liechtenstein banks. While many of these are “super” wealthy people, for those of you who are “kinda” wealthy and want to be more wealthy, there are alternative and legal tax havens here in the PRD that you can take advantage of. Here is an excerpt of the article on the UK – Liechtenstein agreement, pay attention to the last line:
The UK is expected to sign a deal to recover lost tax from Britons holding bank accounts in Liechtenstein.
HM Revenue & Customs (HMRC) has agreed with the Alpine tax haven to start exchanging information. Up to 5,000 British investors have an estimated £3bn stashed away in secret accounts in the country.
Investors are expected to be offered the chance to volunteer details of their deposits in return for limited penalties and low risk of prosecution. More details of the deal with Liechtenstein’s royal family and its government will be announced later on Tuesday.
Pressure has mounted on tax havens to share information since April’s G20 Summit and similar deals have already been struck with the US and Germany. The small principality between Switzerland and Austria is renowned for the secrecy that shrouds the financial affairs of rich investors.
It was once considered to be among the most secretive jurisdictions in the world. Governments are particularly keen to trace and recover unpaid revenues as tax receipts fall in the global recession.
Well, that’s all for now. As always yeeha! Chinatex.
Convertible Yuan
June 29, 2009 by Chinatex
Old Chinatex had a convertible once. It was a Jeep CJ-7 and I used to ride around without a top and I thought i was cool. So I’m not sure about this article about the Yuan (Chinese money) being a convertible, but, I remember telling y’all that this was coming soon and it would make it much easier to do business in China, while avoiding high foreign corporate tax rates – if your business is structured properly. Now that’s the important part. We’ve been advising our clients on proper corporate structure in Asia-Pac and the Pearl River Delta for years. If you’d like to know more about convertibles or proper corporate structure and tax avoidance and cool stuff like that, give Old Chinatex a call. Check out this article for more. Yeeha!! Chinatex
Deal signed on yuan settlement |
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Chinese currency may be used for cross-border trade from next month |
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Maria Chan, Neil Gough and Enoch Yiu |
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Trade between Hong Kong and the mainland could be settled in yuan from as early as next month after the two sides yesterday signed an agreement expected to help further internationalise the Chinese currency. The memorandum of understanding between People’s Bank of China governor Zhou Xiaochuan and Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong will allow companies on both sides of the border to settle trade in yuan as well as other currencies. That move will boost Hong Kong’s ambitions to become a yuan offshore centre and reflects Beijing’s ultimate desire to make the currency freely convertible. Bilateral trade between Hong Kong and the mainland totalled an estimated US$203 billion last year. Chief Executive Donald Tsang Yam-kuen said the agreement was a milestone in the city’s role as an international financial centre. Financial Secretary John Tsang Chun-wah said the scheme would provide Hong Kong enterprises with more flexibility in their operations. Mr Zhou said it was more important for countries in the Asia region to have closer co-operation since the global financial turmoil began. “Enhancing co-operation in trade and finance between the mainland and Hong Kong is a way to cope with the global financial crisis,” he said, adding that it could also help firms reduce exchange risks and lower costs. Mr Yam said he hoped yuan settlement could begin in July. Banks in Hong Kong could also provide trade finance, a form of lending, to customers under the scheme. Hong Kong yuan deposits stood at 53 billion (HK$60.2 billion) at the end of May. Hong Kong banks have been allowed to offer yuan deposit, remittance, exchange and credit card services since 2004 but have not been allowed to provide yuan lending. The PBOC and HKMA in January agreed on a 200 billion yuan currency swap agreement to bolster short-term local liquidity of the yuan. The State Council said early in April that it would allow traders in Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan to settle their cross-border business in yuan. In December, the council said Hong Kong and Macau would be permitted to use yuan for the settlement of trade with designated partners in Guangdong and the Yangtze River Delta under a pilot scheme. Mr Zhou said how many mainland enterprises participated in the scheme would depend on the governments of the two delta regions but “there will be at least a few hundred”. Mr Yam said all Hong Kong exporters and importers could settle trade with their designated mainland counterparts, but the scheme could only be implemented after the PBOC issued administrative guidelines. He said companies from other countries could also use Hong Kong as a platform to settle their trade with their mainland trading partners. Goldman Sachs said the move reflected the mainland’s efforts to further internationalise the yuan. “Our long-standing view has been that the increase in yuan circulation would pave the way towards the ultimate endgame of” the Hong Kong dollar being linked with the yuan, the brokerage said in a report. Mr Zhou stopped in Hong Kong on his way to Beijing after a forum in Switzerland where he also held talks with his Brazilian counterpart that could pave the way for the two sides to recognise each other’s currency. |
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Intellectual Property
June 17, 2009 by Chinatex
You would think that the term “Intellectual Property” would be significant enough to cause businesses to really try and protect it. I mean it is a fairly significant word just by itself. But maybe it is just an oxymoron like military intelligence or maybe it just causes moronic behavior or inaction – which is worse. Consider that for many companies, IP is one of their main assets. While Old Chinatex doesn’t know a whole lot about GAAP and FASB and other complicated bean counter stuff, I do know that if you want to sell your company, raise money, get loans, or go public you can count IP in your valuation and it is even better if it is real and protected and enforceable IP. So, Chinatex wonders why companies that operate outside of the seemingly safe confines of U.S. IP law and legal system don’t do more to protect their IP? Anyway, this issue has come up as I receive more enquiries from foreign companies asking for help protecting and enforcing IP rights. Here is the bottom line:
- IP in China is governed by the State Intellectual Property Office (SIPO)
- China is a first to file jurisdiction. This means the first one to file and have the application approved is the IP holder.
- China does not recognize IP rights from other jurisdictions such as the U.S., the EU and those filed under the Madrid Protocol.
- Patents and Trademarks are valid for 10 year periods and are renewable.
- Intellectual Property rights must be registered with the SIPO and other government organizations each year in order to remain effective and to increase the chance of enforcement.
- Damages in litigation are not based upon precedent but on judges discretion.
Well, there’s a little more to it than that, but hopefully you get the point. If you don’t file you don’t have any rights and you don’t have any intellect or intellectual property! If you are thinking about protecting and/or enforcing your IP, we can help you. If you are thinking about bringing your products to the China market, you better darn sure protect your IP before you start showing your products and ideas to factories and partners and distributors.
As always yeeha!!! Chinatex
Tax man cometh part II
June 3, 2009 by Chinatex
This just in from the U.S. Internal Revenue Service. Now would be a good time to follow Halliburton and move your company completely out of the U.S. to a place like Hong Kong or Macau. With a 14 trillion dollar national debt, doesn’t look like the taxman is going to let this issue slide and with unemployment at about 12% looks like a lot of people lining up to be tax henchmen. As always, Yeeha!!! Chinatax
IRS Commish Details Global Tax Enforcement Plans
WASHINGTON, D.C. (JUNE 2, 2009)
IRS Commissioner Douglas Shulman laid out the Obama administration’s plans for cracking down on offshore tax evasion, including extending the statute of limitations.
In a speech before the Organization for Economic Cooperation and Development, Shulman noted that the Obama administration has asked Congress to extend the statute of limitations on international tax enforcement from three to six years “after the taxpayer submits required information.”
“These cases are often highly complex and require additional time to resolve beyond the current three-year statute,” said Shulman.
He pointed out that the IRS has been faced with a growing number of foreign tax credits claimed on both individual and business tax returns. Between 2000 and 2007, the volume of foreign tax credits claimed by individuals rose “an eye-popping 133 percent,” Shulman noted, while the volume claimed by U.S. businesses increased 71 percent.
The problem has become a major concern for the IRS. “In the U.S., international tax issues have moved to center stage,” said Shulman. “It is a major priority for President Obama, and last month he outlined a bold suite of international legislative proposals. At the same time, the IRS has been stepping up enforcement measures in this area. We are aggressively tracking down tax evaders hiding their wealth overseas and the promoters who aid and abet these schemes. We are steadily increasing the pressure on offshore financial institutions that facilitate concealment of taxable income by U.S. citizens.”
To deal with the problem, he is hiring more enforcement personnel at the IRS. “For too many years, the IRS was in the position of not having the resources to go toe to toe with taxpayers operating in the international markets,” said Shulman. “They had deep pockets and could hire a cadre of legal and tax experts. Some observers said we were outmanned and outgunned. To meet this challenge, we must keep existing personnel current on emerging techniques and hire top examiners, lawyers, economists, special agents and financial specialists who can unravel the sophisticated and complex world of international tax issues.”
Shulman noted that the stepped-up enforcement efforts had led to a victory in last week’s Appeals Court ruling against chip maker Xilinx, which had sought to shift research and development costs to its Irish subsidiary in a transfer-pricing arrangement (see IRS Wins Transfer Pricing Tax Dispute Against Chip Maker).
Shulman plans to require more enforcement of information-reporting requirements to catch tax evaders.
“We know that those taxpayers who have their taxes withheld and reported to the IRS through third parties are the most compliant,” he said. “On the other end of the scale, those operating without withholding and reporting are the least compliant. What’s the lesson here? Simple: Better information reporting can boost compliance, and we need more of it from foreign countries and foreign financial institutions.”
Shulman also said he wants to boost the Qualified Intermediary program, which gives the IRS “an important line of sight into the activities of U.S. taxpayers at foreign banks and financial institutions.”
President Obama’s fiscal 2010 budget includes proposed changes to the QI program to provide increased oversight of taxpayers’ activities at foreign banks, as well as additional information reporting on cross-border wire transfers. The proposals would increase tax withholding in certain situations, strengthen penalties, and shift the burden of proof to make it harder for offshore account-holders to evade U.S. taxes, Shulman added. The proposals would also create disincentives for U.S. taxpayers who chose to do business with a financial institution that has chosen not to be a QI.
On the business tax enforcement side, Shulman acknowledged that many companies adhere to the international tax laws and try hard to comply, but he warned against those that try to take advantage of loopholes.
“Let me be clear,” he said. “There are plenty of international tax strategies that are perfectly legal. And many corporations and their legal and tax advisors are genuinely trying to comply with the myriad of international tax laws. While we won’t always agree about what the law is, or how it applies in particular cases, we recognize that many businesses are trying to get it right. However, we also know that some businesses use the complexity of the Tax Code and the international capital markets to push the envelope too far. That is where we have issues, and where we will continue to focus.”
Particular areas of concern include transfer pricing, financial instruments, hybrid structures and withholding taxes. The administration is also cracking down on reforming the tax deferral rules in which U.S. multinational corporations that invest overseas can take immediate deductions on their U.S. tax returns for certain expenses but defer paying U.S. taxes on the income, Shulman noted.
Another area of corporate tax reform proposed by the administration is to change the so-called “check-the-box” rules that can make foreign subsidiaries “disappear” for U.S. tax purposes, according to Shulman.
60 years in photographs
June 1, 2009 by Chinatex
Howdy y’all. Not a lot of news except for the bad stuff coming out of the U.S. economy. I came across this interesting collection of photo’s put out by the China Daily. It’s pretty cool to see the history of China in photographs. Check it out: http://www.chinadaily.com.cn/china/2009-06/02/content_7961398.htm
As always, yeeha! Chinatex
Shenzhen is special indeed
May 21, 2009 by Chinatex
Shenzhen, China is approximately 80 kilometers (50 miles for those of us who have trouble with the metric system) north of Hong Kong. It used to be a fishing village, and while there are locals and native Shenzheners, they are few as everyone seems to be from somewhere else. Shenzhen was established as a “Special Economic Zone” (“SEZ”) as part of China’s reform policies in the late 70’s and early 80’s. You can learn more at this link: http://en.wikipedia.org/wiki/Special_Economic_Zones_of_the_People’s_Republic_of_China
Anyway, for the last 6 years I have been a “legal consultant” here in Shenzhen and I consider it my second home. It is a beautiful city and I particularly like the tropical climate and proximity to the sea. As an SEZ, Shenzhen is filled with techonology, consumer electronics and other companies and to me is the Silicon Valley of China. We have about 12 million people here, but I tend to believe that it’s considerably more as I always have to wait in line for everything. This article just in from the China Daily concerning Shenzhen and it’s expansion. Remember what Old Chinatex has been telling you about the plans for Free Trade in the Pearl River Delta and loosening of forex rules in the region. This is big news and another example of the methodical and strategic approach taken by the government here to continue to make the PRD into a global economic power. As always, Yeeha!! Chinatex.
Shenzhen SEZ aims to be 5 times bigger
By Chen Hong in Shenzhen, Joey Kwok in Hong Kong and Xin Dingding in Beijing (China Daily)
Updated: 2009-05-22 07:40
The Shenzhen government has drawn up a blueprint to expand the country’s first special economic zone (SEZ) to the whole city – as a restructuring strategy to increase its competitiveness amid the economic downturn.
“Legislators are working on the proposal to expand the scope of Shenzhen SEZ to the whole city, but it needs the approval of the State Council,” an official with the legislative affairs office of the Shenzhen People’s Congress, who did not want to be identified, told China Daily Thursday. Earlier this month, the State Council added the city to the list of two more areas to pilot comprehensive reforms. But “important reforms regarding the scope of the SEZ, land and finance should get approval case by case,” the document specifies.
If the proposal is approved, Bao’an and Longgang districts, which make up four-fifths of the city’s land mass, will become part of the SEZ, whose area will swell from the current 395.81 sq km to more than 1,900 sq km.
“In the face of the economic downturn, the SEZ has been retooling its strategy to bring in more high-tech enterprises in place of labor-intensive industries. The economic restructuring will sharpen its competitive edge,” explained Cheng Jiansan, an economist with the Guangdong Academy of Social Sciences.
In the land-strapped SEZ, where the government also needs to develop commercial facilities and green areas for residents, IT enterprises like Huawei have hardly any room for expansion, he said. Huawei is moving its production base to Longgang district, which is not yet part of the SEZ. “But, if in the future, Longgang district becomes part of the SEZ, IT companies like Huawei will be able to enjoy preferential policies like lower income tax,” he said.
The city can also have balanced development with the removal of long-existing policy and legal differences inside and outside the SEZ, scholars said. Bao’an and Longgang are separated from the four districts in the SEZ by a 100-km-long border although in recent years, the government has allowed entry to the SEZ with special passports.
But “if the merger is approved, the two districts would enjoy the same legislation, same urban planning and same infrastructure. The integration will allow the city to achieve balanced development,” said Guo Wanda, vice-president of the China Development Institute, a government think tank.
For example, people living outside the SEZ cannot enjoy the superior education and healthcare resources inside the zone. Also, the Shenzhen government tended to be partial to the SEZ, Cheng said. Likewise, the infrastructure and industrial planning in the two districts were often not in tune with the SEZ.
Cheng said the Zhuhai and Shantou SEZs face a similar problem and “if Shenzhen’s proposal for expansion is approved, I believe Zhuhai will try to go down the same path”.
Linus Yip, strategist at Hong Kong-based First Shanghai Securities, believes the expansion of Shenzhen SEZ will also benefit development in the Pearl River Delta region (PRD). Yip also said it is just a matter of time for Shenzhen to further expand and combine with Hong Kong. “The two cities are, at the moment, quite closely correlated in terms of economic activities, and it will be irresistible for them to merge,” Yip said, adding a merger would bring synergy.
Since 1980, the government has set up five SEZs (Shenzhen, Zhuhai and Shantou in Guangdong province, Xiamen in Fujian province, and Hainan Island). In 2005 and 2006, the State Council designated Shanghai Pudong and Tianjin Binhai as comprehensive reform pilot areas, with Shenzhen added to the list this month. On May 6, Shanghai Pudong secured approval to expand by merging with Nanhui District, to facilitate its plan of becoming an international financial and shipping center.
The tax man cometh…..
May 5, 2009 by Chinatex
…….and Obama taketh away. Like many of my clients, your company will also be hit by the changes the Obama administration is proposing to the U.S. corporate tax laws. While you should know and understand these changes, there are solutions and they are right here in the Pearl River Delta – Guangdong Province China, Hong Kong and Macau. While business planning generally involves risk, market factors, compliance, labor and other issues, it must also include tax planning and tax strategies for tax avoidance. Old Chinatex helps his clients – those that will listen – legally avoid as much tax as possible. Check out this article below and my comments. As always – Yeehaa!!! Chinatex
Obama to crack down on business taxes
(Agencies)
Updated: 2009-05-04 23:53
WASHINGTON – President Barack Obama plans changes to tax policy certain to be unpopular with corporations with international divisions and individuals who use tax havens. Obama’s two-part plan, which he is slated to unveil at the White House on Monday, also calls for 800 new federal tax agents to enforce the system. New taxes always need new thugs to collect them.
The president’s proposal would eliminate some tax deductions for companies that earn profits in countries with low tax rates, ie: Hong Kong as well as consider US citizens who use tax havens in the Bahamas or Cayman Islands guilty of violating US tax laws. If Obama wins congressional approval for the changes – and he faces a challenge on Capitol Hill – it could deliver $210 billion in tax revenue over the next decade. It always works this way, government overspends and screws up and gets us into such a huge deficit that they have to squeeze us until we bleed.
Officials described the administration’s plan ahead of the announcement on the condition of anonymity so they wouldn’t upstage the president’s remarks. Or so they wouldn’t be dragged out and beaten to death by the pissed off business owners. However, they acknowledged the political challenges facing the plan. The administration won’t seek a complete repeal of overseas tax benefits and, although the rule changes are narrower than some anticipated, business leaders still oppose them as a tax hike. Obama aides countered that the plan is a step toward a massive overhaul of international financial regulations the president has promised. They think we are stupid, so we will just have to find a way to avoid their massive overhaul.
In exchange, Obama said he was willing to make permanent a research tax credit that was to expire at the end of the year and is popular with businesses. Officials estimate that making the tax credits permanent would cost taxpayers $74.5 billion over the next decade. Hmm, take in 210 billion, but leave the 74 billion scraps to the corporations – sounds fair!!
It was small comfort. Companies who shelter profits in international accounts and your companies who are doing business in Asia, stand to lose billions if Obama’s plan becomes law. Under the existing regulation, those companies pay taxes only if they bring the profits back to the US if they keep the profits offshore, they can defer paying taxes indefinitely – and many do. Now they are going to make you claim the monies that you leave in offshore bank accounts. Sound familiar – remember the earlier story i shared with you on the G20 communique. Tax Haven or Heaven?? http://chntxlaw.com/2009/04/tax-heaven-or-haven/
Obama’s plan wouldn’t go into effect until 2011; Obama has said he does not want to tinker with tax revenues until his $787 billion stimulus plan has run its course. He means he doesn’t want to start robbing from Peter to pay for Obama’s spending just yet or he will be run out the country. The proposals, however, were far from complete, and aides said this was just one piece of the administration’s plan for sweeping overhaul.
Administration officials depicted the move as a way to close unfair tax loopholes that encouraged companies to send jobs overseas. Obama paying back the labor unions for his massive campaign war chest. They argued that if it costs the same amount to do business in, say, Ireland as in Iowa, why not do it entirely in Des Moines? Officials said Obama would characterize the move as a way to keep jobs in the United States and fight a system that is rigged against US companies who keep their entire business operation domestic.
Obama also planned to ask Congress to crack down on tax havens and implement a major shift in the way courts view guilt. Unbelievable!! Under Obama’s proposal, Americans would have to prove they were not breaking US tax laws by sending money to banks that don’t cooperate with tax officials. It essentially would reverse the long-held assumption of innocence in US courts. And continue the erosion of our Constitution.
In the news
May 1, 2009 by Chinatex
Old Chinatex, being a veteran of Shenzhen, China, was invited to sit on a panel of foreign experts to discuss ways to improve our beautiful city. The conference was sponsored by The Shenzhen Special Economic Zone Daily, which is “the newspaper” in Shenzhen. Now, I’m no expert, but after listening to one of the foreign experts spew a bunch of fei hua (bullshit) on the obvious value of the form of government in China, I had my turn to give my advice. I don’t really remember much of what I said, but if you can read Chinese, the article is right here at this link:
http://sztqb.sznews.com/html/2009-04/29/node_666.htm
Hope everyone has a great May Day holiday. Yeeha!! Chinatex
In Labor
April 21, 2009 by Chinatex
I like the lawyer joke that goes: “what do you call a million lawyers at the bottom of the sea?” A good start! It’s not my favorite one or the funniest, but if you want to buy Old Chinatex a beer he’ll tell you the best one. Anyway, check out this article from the China Daily. No need for me to add my comments as i told y’all what would happen as a result of the “new” (now more than a year old) labor law in China. While there are legitimate disputes as a result of the changes to the laws, the reality is there are more hungry lawyers willing to sue employers on behalf of their poor and innocent clients. As Old Chinatex tells his clients, “a foreign company has a snowballs chance in hell of winning in court against a chinese person”. If you would like more info on the labor laws, send me an email info@chntxlaw.com and i will send you the memo i distributed to my clients last year on the labor laws. For now stay out of labor. Yeeha!! Chinatex
Cases soar as workers seek redress
(China Daily) Updated: 2009-04-22 07:53
The number of labor disputes heard by courts has skyrocketed this year with many employees choosing legal avenues before trying to sort out problems with their bosses, experts said on Tuesday. Figures from the Supreme People’s Court (SPC) showed 98,568 cases in the first three months this year, a 59-percent year-on-year rise.
“Amid the global financial crisis, the number of businesses going into the red or going bankrupt continues to grow, leading to more disputes over salary claims,” said Du Wanhua, chief of the SPC’s No 1 civil trials tribunal. “Ever since the implementation of the Labor Contract Law in January 2008, workers have become more aware of their rights and the legal avenues available to safeguard them.”
A revision of regulations on lawsuit fees in 2007 reduced costs to 10 yuan ($1.50) per case, while at some courts they are free. Previously, costs were based on the amount of money involved.
Wang Linqing, a professor of civil law at Renmin University of China, told China Daily that the economic downturn and the revised laws could be putting more pressure on the courts, with some workers filing lawsuits as a first step rather than discussing the issues with their employers.
Wang suggested that more out-of-court mediation be used with extensive participation of government departments, labor unions, residents’ or villagers’ committees as well as mediators. Qiu Baochang, dean of Beijing-based Huijia Law Firm, agreed. “Workers should not rely solely on the courts and arbitration committees. Fair labor treatment can also be achieved through negotiations between workers and enterprises,” Qiu said.
The law, which took effect last year, includes clauses on overtime payment, compensation for contract termination and wages for departing staff who had served at least one year.
Last year, 286,221 disputes were heard, a 93-percent rise on 2007, with the number nearly tripling in some coastal cities.
Courts in Guangdong province heard 20,163 labor disputes during the first three months this year, up 41.6 percent year-on-year, the SPC data showed, while in Jiangsu and Zhejiang provinces the figures jumped 50 and 64 percent to 11,782 and 6,513.
In the past, most disputes were related to damages for injuries or payment, but there has been a sharp rise in workers claiming back pay for social insurance and pensions, as well as lawyers, accountants and auditors suing employers for grievances related to the process of signing, terminating or halting labor contracts
Fearing an increase in disputes might affect social stability, the SPC has been working on a judicial interpretation of the Labor Contract Law since last July to uniform trial standards nationwide. “We encourage enterprises to assume more social responsibility, and try not to lay off workers or reduce salaries. On the other hand, we suggest workers show more understanding toward enterprises in financial difficulties,” Du said. Still, courts will punish such violations as arbitrary retrenchment, and guide employees and enterprises in resolving disputes through shorter working hours, training shifts, temporary vacations or salary negotiations, Du added.
