An influential European business group on Sunday said China must ensure a new law to help workers is respected, as the effectiveness of similar legislation has been "non-existent" in the past. A controversial bill on contract labour approved on Friday will safeguard job conditions but it must be enforced, the European Union Chamber of Commerce in China said.
"There is no doubt that the passing of the law and its strict implementation will drastically improve the working conditions in China," the statement said. But it warned of the dangers of non-compliance by companies and previous non-enforcement of existing laws by the authorities.
"In the environmental sector, we see Chinese legislation that is even stricter than European law, yet implementation is sometimes non-existent," chamber president Joerg Wuttke said. "A large gap between legislation and local governments' ability to implement laws has a detrimental impact on the credibility of the rule of the law," he added.
However, the chamber said it was not concerned about the effect of the law on European investment in China. "Several studies world-wide have proved that labour cost is not the primary factor influencing corporate investment strategy," it said.
"It is the market size and growth potential that turn out to be the chief reasons for investment." The new labour law bill will try to end frequent abuses-many of them endured by China's huge army of migrant workers-by threatening officials with criminal prosecution if their neglect results in serious harm to workers. The bill, to take effect from January 1, 2008, also bans the use of rolling probationary contracts, where workers are denied a full-time position despite working in the same job for a long time.
Workers hired by agencies are to be given the same protection and insurance as full-time workers, a situation that previously was biased against migrant workers hired from abroad.