In an attempt to avoid the cost of higher redundancy payments mandated by the new Labour Contract Law, many employers are getting rid their staff before the law goes into effect on 1 January 2008, the Chinese media has reported.

The much discussed Labour Contract Law, approved by the National People's Congress on 29 June 2007, gives individual workers greater job security and makes it more difficult to get rid of long-serving employees. As such, employers are taking advantage of the six month gap between approval and implementation to lay-off workers or force them into early retirement.

The Southern Metro News (Nanfang Dushi Bao) reported on 12 September that several substitute teachers from a number of different schools in Shenzhen have already been given notice. Five substitute teachers from the Longhua Primary School, who had worked at the school for an average of 15 years all were given notification of early retirement on the same day, including one teacher with numerous commendations.

In Shanghai's Pudong district, several workers employed for over three years without a written contract have complained to their union about systematic intimidation from employers. Eight employees have already been made redundant, the Morning News (Xinwen Chen Bao) reported. Once the Labour Contract Law is implemented, these workers would have to be given written contracts specifying in detail the terms and conditions of their employment.

China Labour Bulletin has noted this development with concern and urges the All-China Federation of Trade Unions and government labour agencies to be on their guard against such abusive practices in the next few months. Most at risk are long-serving employees who under the new law would have to be given an unlimited contract or would be entitled to significantly higher redundancy payments. 

Furthermore, CLB urges that when the Labour Contract Law goes into effect next year, it is rigorously enforced by the government so that many of abusive work practices currently seen across the whole of China can be curtailed.