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China’s Employment Contract Law: Does it deliver employment security?

Author

Listed:
  • Fuxi Wang

    (University of International Business and Economics, China)

  • Bernard Gan

    (Griffith University, Australia)

  • Yanyuan Cheng
  • Lin Peng
  • Jiaojiao Feng
  • Liquian Yang
  • Yiheng Xi

    (Renmin University of China, China)

Abstract

During its transition to a market economy, structural inequalities became increasingly apparent across China’s workforce, threatening social harmony. China’s 2008 Employment Contract Law, legislated amid policy debate, was intended to remedy these phenomena. We examine a crucial element of its remit: has its promotion of continuing contracts as against fixed-term employment contracts been effective? This is crucial for improving workers’ rights through secure employment. How have employers responded to this challenge to their prerogatives in terms of hiring and firing? We analysed data from 2007 and 2012 drawn from All-China Federation of Trade Unions surveys, which cover approximately 80,000 individuals. Using institutional theory, we discuss a variety of employer responses. We find that the Employment Contract Law has increased the likelihood of signing continuing contracts among migrant workers, employees in privately owned enterprises, and those with lower professional titles and who are short-term employees – all disadvantaged labour market categories previously. It has also significantly narrowed gaps regarding access to continuing contracts between these categories and matched advantaged ones. There is also evidence that some employers seek to avoid or sidestep compliance through cost-minimising worker engagement strategies. JEL Codes: J41, J53, K31

Suggested Citation

  • Fuxi Wang & Bernard Gan & Yanyuan Cheng & Lin Peng & Jiaojiao Feng & Liquian Yang & Yiheng Xi, 2019. "China’s Employment Contract Law: Does it deliver employment security?," The Economic and Labour Relations Review, , vol. 30(1), pages 99-119, March.
    • Handle: RePEc:sae:ecolab:v:30:y:2019:i:1:p:99-119
    DOI: 10.1177/1035304619827758
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    References listed on IDEAS

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    More about this item

    Keywords

    China; employer strategy; Employment Contract Law; employment security; flexibility; institutional theory;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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