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backGLOBALtalk July, 2011
China: Legal cases involving foreign workers on the rise
When 47-year-old Canadian Andrew Fenske came to China in 2004, he was the first and only Western employee leading his Austria-based company's customer service division, and helped build the company's China operation from scratch. He could never have imagined that a back illness in 2009 could cost him his 28-year career and embroil him in a two-year lawsuit.
He was fired by his company Engel Machinery, the world's largest manufacturer of injection molding machines, for being absent from work for two months without asking for leave. A court in Shanghai rejected his initial appeal for compensation of 1 million yuan ($ 153,905) for lost salary and allowance.
Andrew was one of 201,955 foreign employees working in China, according to the latest census released by the National Bureau of Statistics Friday. That demographic represents about a fifth of the 1.02 million foreign citizens currently living in China.
Growing trend
Andrew's case is by no means an isolated one. According to Wang Huayu, a human resources expert and chief consultant at the Shanghai-based Chi Wan Legal Consulting Firm, the number of legal cases involving foreign workers has increased by 30 percent in the past three years.
According to Wang, there are three main reasons behind this trend. First is the fact that the number of foreign workers has grown. The second comes from the tightening of the Labor Law in 2008 and Social Insurance Law in 2010, prompting workers, including foreign ones, to pay more attention to their legal rights. Finally, where foreigners previously tended to work in high-level management positions, more of them are now working in mid-level management as well as ordinary jobs, such as technicians.
However, the law hasn't quite kept up with these changes. At present, there is only one regulation covering foreign employees in China: the Administration of Foreigners Working in China Provisions published in 1996.
"Overall, this 1996 regulation just lists some basic labor rules that suit all workers without really listing some targeted details for foreign employees. Although the government has always tried to adjust this law, it only made some amendments for Hong Kong, Taiwan and Macao expats in 2005," Wang said.
Rewriting the rules
In fact, a debate has long existed over the necessity of a labor contract distinguishing foreigners from local workers, given that foreign workers' benefits and welfare terms are usually much better than those of local workers. In Andrew's case, according to China's Labor Law, he is legally entitled to a compensation of two months' salary for every year he worked with his company, which comes to about 1 million yuan ($154,022) if he works for five years.
However, another provision in the law states that the monthly salary for compensation to an employee should not exceed three times the local average monthly wage. In the case of Shanghai, Andrew can only be compensated 100,000 yuan ($15,402), just one-tenth of what he's supposed to get.
"This is unfair. The court doesn't take into account that foreigners are paid very differently from Chinese workers," Wang Tao, Andrew's defense lawyer, told the Global Times on Wednesday.
Andrew has appealed to a Shanghai intermediate court, demanding his labor contract be reinstated, as he feels it would be better than compensation that falls far below his expectations.
In fact, Shanghai labor authorities issued two notices in 1998 and 2002 allowing foreign employees and employers to set certain terms regarding their rights and responsibilities through contracts, including liability for breach of contract and conditions for the cancellation of the working relationship.
However, most foreigners are unaware of these regulations.
"Foreign employees, having grown up in a different legal environment, know little about China's Labor Law, let along the regional regulations," Wang Huayu said.
"I think it's necessary to make a special regulation on Labor Law for foreign employees in China," he argued, adding that foreigners working in China should also study its Labor Law and regulations.
Source: Global Times - GAI
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