Printed Circuit Design & Fab Online Magazine - Foxconn to Sign Employee Contracts Under New Labor Law

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Printed Circuit Design & Fab Magazine

SHENZHEN – Foxconn was again in the news with a proactive move aimed at addressing labor practice issues. They announced that the company would sign open-ended labor contracts with employees who have worked for the company for a minimum of eight consecutive years. Workers with less tenure may also qualify for long-term contracts.

This move is just weeks in advance of the new Chinese labor legislations that are expected to have sweeping impact on labor rates in China. On January 1, 2008, companies will be required by law to provide labor contracts for their employees. Provisions within the new legislations place a burden on employers to foster collective bargaining methods and other protections of employee interests including compensation, work hours, leave, occupational health and safety, insurance, training, discipline and performance norms.

The new law is seen as an opportunity for companies in China to use the employment contact as a means to keep key employees and create a platform for employee promotion. With one of the highest employee turnover rates in the world, these new guidelines should allow companies the opportunity to reward productivity and stabilize a portion of the workforce.

Foxconn announced earlier this year it will expand operations in Vietnam, a region currently considered to be the next global low cost manufacturing hub. Foxconn president Terry Guo was quoted as saying the company would invest $5 billion over the next 3 to 5 years and build a local labor force of 300,000 in Vietnam. Foxconn already employs over 300,000 in China.

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Foxconn to Sign Employee Contracts Under New Labor Law

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