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PRC Employment Law Workshop – Legal Update on Social Insurance Law, Collective Wage Bargaining and Trade Unions (Singapore)

02 August 2011

Singapore: On 2 August, Dr. Isabelle Wan conducted a workshop hosted by the Singapore Business Federation. The event focused on several new regulations and the likely impact they will have on employers, as well as current events.

On 28 October 2010, at the 17th meeting of the Standing Committee of the 11th National People's Congress, the Social Insurance Law of the People's Republic of China (Social Insurance Law) was adopted.  This new law will come into effect as of 1 July 2011.  As the first ever legislation on the Chinese national social insurance system, it will undoubtedly have a profound impact on the development and improvement of the system.  In particular, this law places emphasis on enforcement and supervision by the relevant authorities, and thus places the onus on employers to comply.  For instance, under Article 63, a series of powers are granted to social insurance agencies, and under paragraph 1 of Article 82, it is expressly specified that any organization or individual has the right to report or lodge a complaint against acts violating social insurance laws and regulations.

In addition, the string of suicides at Foxconn's Shenzhen factory and the strikes at Honda's Nanhai and Zhongshan plants in Guangdong last year have attracted much media attention and thrown the issue of low employee wages into the spotlight. Labor unrest and strikes brought about primarily by demands for wage increases highlight the tendency of employment issues to cause an adverse domino effect. Confrontations between employers and employees on a number of issues ranging from wages and benefits to overtime pay have been growing rapidly. In response, both the central and local governments have enacted new regulations to promote the establishment of trade unions and enhance collective wage bargaining. In this connection, the All-China Federation of Trade Unions aims for at least 80% of all enterprises in China to be actively engaging in collective bargaining by 2013 (with a specific focus on Fortune 500 companies). 

Dr. Wan also focused on the recent rise of collective labor actions in China and introduce new regulations enacted in Shanghai (taking effect on 1 May 2011), which vest employees with far greater rights and protection with respect to collective bargaining.