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

Published online by Cambridge University Press:  01 January 2023

Fuxi Wang ,
Bernard Gan ,
Yanyuan Cheng ,
Lin Peng ,
Jiaojiao Feng ,
Liquian Yang  and
Yiheng Xi
Fuxi Wang
Affiliation:
University of International Business and Economics, China
Bernard Gan
Affiliation:
Griffith University, Australia
Yanyuan Cheng*
Affiliation:
Renmin University of China, China
Lin Peng
Affiliation:
Renmin University of China, China
Jiaojiao Feng
Affiliation:
Renmin University of China, China
Liquian Yang
Affiliation:
Renmin University of China, China
Yiheng Xi
Affiliation:
Renmin University of China, China
*
Yanyuan Cheng, Department of Human Resources Management, School of Labor and Human Resources, Renmin University of China, 59 Zhongguancun Street, Haidian Qu, Beijing 100872, China. Email: chengyy@ruc.edu.cn
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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.

Keywords

J41J53K31Chinaemployer strategyEmployment Contract Lawemployment securityflexibilityinstitutional theory

Information

Type
Job quality and security: do laws work?
Information
The Economic and Labour Relations Review , Volume 30 , Issue 1: Symposia: Post-Crisis Rebuilding: Job Quality, Job Security and the Law , March 2019 , pp. 99 - 119
Copyright
© The Author(s) 2019

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