Shenzhen's push for collective bargaining in private sector - International Law Office

The authorities in Shenzhen have announced that in 2010 they will pick 120 companies from the Global Fortune 500 and China Fortune 500 that have operations in Shenzhen and will push for collective bargaining in these companies. The focus will be on setting minimum wage standards and guaranteed wage increases within the companies.

On January 18 2010 a draft set of collective bargaining regulations was submitted to the Shenzhen People's Congress for review. Significantly, the draft regulations provide that if an impasse occurs in the collective bargaining process and cannot be resolved by the parties amicably, either party may apply for binding labour arbitration on the problematic issues. The arbitration panel must decide on the issue within 15 days of receiving the application. This is similar to the position that trade unions in the United States are seeking in the Employee Free Choice Act. Other significant provisions provide that companies with more than 300 employees must sign collective contracts with employees.

As Shenzhen is often at the forefront of legislative developments in China, if the draft regulations are passed in their current form, local governments in other major cities and provinces are likely to follow Shenzhen's lead.

For further information on this topic please contact Andreas Lauffs at Baker & McKenzie's Hong Kong office by telephone (+852 2846 1888), fax (+852 2845 0476) or email (andreas.lauffs@bakernet.com). Alternatively, please contact Bofu An at Baker & McKenzie's Beijing office by telephone (+86 10 6535 3800), fax (+86 10 6505 2309) or email (bofu.an@bakernet.com).