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Foreign firms given labor contract deadline

By Chen Hong (China Daily)
Updated: 2008-09-24 07:41

Shenzhen -- More than 100 foreign-funded companies here have been ordered to sign collective contracts with their employees by Dec 5, the local trade union federation said on Monday.

Zhang Youquan, director of the legal affairs department of the Shenzhen Federation of Trade Unions (SFTU), said at a press conference that the firms, which include McDonald's, Carrefour and Ikea, should start negotiations with their employees within 10 working days (of Monday).

The talks should encompass such issues as pay, working hours, paid vacation, social security and welfare, and agreement should be reached by Nov 14, he said.

Contracts should then be signed before Dec 5, he said.

"Our proposal is protected by the law," Zhang said.

"Companies that fail to respond within 10 working days or turn down the offer will be regarded as violating the law," he said, without elaborating on what punishments those who break the law might face.

The federation will also publicly condemn any company that tries to delay the negotiations without good reason, he said, again without elaborating.

Employers should give due consideration to the rising cost of living when negotiating pay rises with their workers, he said.

"Basically the average pay rise should be based on GDP growth and the CPI (consumer price index)," he said.

Li Shaomei, vice-chairman of SFTU, said the latest push for collective contracts comes on the heels of US retailing giant Wal-Mart signing contracts with employees at its 108 unionized stores across the country.

"Wal-Mart has set an example, which is a milestone for collective agreements among foreign-funded companies," she said.

The federation will offer training, if required, to representatives of management teams and trade unions before they begin negotiations, she said.

According to figures from the SFTU, since collective negotiations were introduced to Shenzhen in 1995, more than 40,000 firms have signed contracts with more than 4 million employees.

Wal-mart became the first foreign-funded firm to do so in July, after 18 months of tough negotiations, Li said.