In the news: Labour Dispatch Provisions, State Council approvals and a new financial supervision agency
August 22, 2013 | BY
clpstaff &clp articles &Draft Provisions over labour dispatch workers answer questions, the State Council pledges to remove unnecessary approval requirements and has also approved a new agency to look at monetary policy
Provisions over amended Employment Contract Law released
The Several Provisions on Placement came out on August 7 from the Ministry of Human Resources and Social Security (MOHRSS). The Draft, which is open for comments, places a 10% cap on the amount of labour dispatch workers a company can use as part of its total employee pool. The Draft also requires companies to list positions that would fall into the auxiliary category of labour dispatch workers in line with operational needs. This list will be confirmed with the labour union before being made public. Contractors are also included in the 10% ratio, so companies cannot circumvent the restrictions imposed in the Draft.
When the amended PRC Employment Contract Law (中华人民共和国劳动合同法) became effective on July 1, question marks remained over many of the changes to the Law. The Draft Provisions seek to clarify these issues. Specifically, the ratio of dispatch workers that a company could use was unclear. Many had estimated this percentage to be 30% to 40% and some voices had said that a national limit would not work as regions have different requirements. The 10% in the Draft is far below what was expected and some companies will find it hard to meet this requirement. When a formal version of the Draft is released, hopefully this number will be much higher. Clarifying auxiliary positions will be welcomed, but there is still room for loopholes, as there are no set requirements other than a list being approved by the union.
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PRC Employment Contract Law (Revised)
State Council cuts approval procedures
China Daily reported this week that the State Council would cut some of the administrative procedures now in place. The move will streamline the approval process across all levels of government. According to the statement from the State Council, the reforms will boost the structure of the government and remove burdens on enterprises. The reforms also prohibit approval requirements on industries where a market can govern itself.
This is a positive move from the State Council as one of the major hurdles for any foreign investor are the multiple government approvals needed to get a project up and running. However, the State Council has not gone into great detail in its statement, so the true effect of the move cannot be assessed. There are some positive points though. First, that private capital should be given access to industries that are dominated by state-owned enterprises. Second, that local authorities can only add new approvals after soliciting public opinion. The move is definitely part of the new administration's efforts to remove abuse of local power and streamline approval requirements.
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China to create financial supervision agency
The State Council announced on Tuesday that it is looking into a new agency spearheaded by the People's Bank of China (PBOC). The proposal from the Bank has been approved and the new office will look at monetary policy and financial regulations. The agency will report to the State Council and can invite the National Development and Reform Commission and the Ministry of Finance to its meetings, if needed.
This is an unexpected move from the State Council as market observers had speculated China would create a more powerful agency to remove bureaucracy and speed-up reforms. The Council noted that the new agency would not interfere with the operations of already-established offices, as it would not be a policy-maker. This raises questions over what power and influence the new agency will have, as it seems it will play more of an advisory role.
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