The Labor and Social Security authority of Shanghai's Zhabei District overruled two job displacement cases last week on the eve of the implementation of the new Labor Contract Law, safeguarding the jobs of over 2,000 workers.

In the first case, involving 800 workers, a company tried to sidestep the relevant articles in the new Labor Contract Law on forbidding "illegal labor dispatch", the Shanghai-based Oriental Morning Post reported.

The company had some 800 employees who worked under one of its subsidiary companies as dispatched employees. The practice is legal for the moment but not when the new Labor Contract Law comes into effect on January 1, 2008, as the new law will only permit third-party work force to supply dispatched employees. So the company wanted to put an end to their "illegal operation" by simply dismissing the 800 workers.

As soon as the company filed its dismissal application to Zhabei District labor and social security authority, it received attention due to the scale and timing of its dismissal. Officials with the district's labor and social security supervision body and labor unions intervened and talked to the managers of the company and finally reached a solution to secure the interest of both the employers and employees.

In the final deal, competent workers among the 800 were absorbed into the company and most of the others were delivered to other lawful labor dispatch companies on the premise that their wages and benefits were kept, and the few who wanted to work at other places terminated their labor contracts in a lawful manner.

The second case is about a company that wanted to evade signing "open-ended labor contracts" with veteran employees by dismissing them ahead of the implementation of the new Labor Contract Law.

The company, also a labor dispatch company, planned to end labor contracts with its some 1,200 employees before the end of December.

The new Labor Contract Law stipulates that employees who have signed a fixed-term contract for two consecutive years are entitled to sign a contract that has no fixed term with agreement by both parties.

The company feared once a contract that has no fixed term is signed, it will run into difficulties should it find the need to dismiss its veteran employees.

But with the intervention of Zhabei District labor and social security authority, the company finally gave up and pledged to do justice to its employers. In the aftermath, 1,990 employees were restored to their posts.

"If the labor contract between the employer and the employee is not expired, an employer can only dismiss its employee through legal procedures," an official with the Zhabei District labor and social security bureau said.

A sudden dismissal only aimed at sidestep responsibilities of the new Labor Contract Law is certainly improper and should be stopped, the official said.

Altogether, the two cases saved the jobs of 2,000 employees.

Shanghai's labor and social security authorities have pledged to do more promotional work regarding the new Labor Contract Law and urged companies not to dismiss employees in a quick manner ahead of the new year.

(CRI December 18, 2007)