Labor Matters in China
1. Strikes in Chinese subsidiaries
In China, strikes due to dissatisfaction with labor conditions and other reasons have become more frequent in recent years. If they are not handled properly in their early stages, these strikes can expand in scale and the time required to resolve them, and so the response in the early stages is extremely important. In order to respond appropriately in the early stages, it is necessary to prepare a response manual that envisages the occurrence of strikes and to promptly follow the response manual when a strike actually occurs.
Even if the company management makes mistakes in its early response, it will need to act suitably and at the appropriate time to recover the situation thereafter. It may be able to proceed with the cooperation of the local Chinese authorities in the area where the subsidiary is located and return the situation to normal swiftly.
2. Restructuring in Chinese subsidiaries
Companies that have expanded their business in China have begun to find that increases in wages are giving rise to the need to rationalize and restructure their Chinese subsidiaries. When restructuring, it goes without saying that companies need to comply with the relevant Chinese labor laws, but they must also act to prevent dissatisfaction among the employees who are affected by restructuring as much as possible. Specifically, companies must hold explanatory meeting for their employees before carrying out the restructure to explain the benefits the employees will receive (such as financial compensation), procedures that will need to be completed and any other necessary information.
In addition, notifying the local Chinese authorities in the area where the subsidiary is located before the restructure and proceeding with their cooperation is also effective in preventing the occurrence of unexpected outcomes.
To avoid the occurrence of labor problems, it is important to implement proper labor management on a day-to-day basis. In particular, as strikes are often caused in part by dissatisfaction with labor conditions, preparing labor agreements and employment regulations that take this into account is essential.
4. Services provided by Kuroda Law Offices
We have handled a large number of labor matters in China, including going to sites where strikes have occurred to take actions aimed at calming the situation, and actively working at sites undergoing restructures while cooperating with the local Chinese authorities. Therefore, we are capable of using this experience to provide advice and responses on labor matters in China in line with our clients’ wishes.
The major services we provide in relation to labor matters in China include:
- Responding to strikes in Chinese subsidiaries
- Restructuring in Chinese subsidiaries
- Labor management in Chinese subsidiaries (including preparing labor agreements, employment regulations and other documents)