Shaanxi Province in northwest China is taking measures to control unemployment and encourage local firms to follow proper procedures when laying off workers.

On Monday, the provincial government issued a document entitled "The Implementation Plan for Unemployment Adjustment and Control," which clearly defines the conditions and limits of job cuts at any local enterprise.

"The measures aim to control the rapid rise of the unemployment rate and keep it to an acceptable level," said Zhai Sihu, deputy director of the Shaanxi Provincial Labour and Social Security Bureau.

Li Jianchao, a taxi driver twice dismissed from local companies, said, "With a big labour force, we employees are in a weak position and can be dismissed at any time. I think the newly issued government plan will help guarantee our rights."

According to the plan, enterprises will not be allowed to go bankrupt if they have no proper measures for social security provision for their workers.

The plan also includes incentives to encourage local firms which go bankrupt and are then restructured to support their laid-off employees.

For example, restructured firms that re-employ more than 50 percent of the workers they previously laid off on three-year contracts will get financial benefits.

"Qualified firms can get a 500 yuan (US$60) training allowance for each person," said Zhai. The plan stipulates that any State-owned enterprises which cannot pay compensation when they end contracts with employees, will not be allowed to reduce their staff, Zhai said.

Also, any enterprise with 500 to 2,000 employees must get approval when it wants to reduce its workforce by more than 10 percent, according to the plan.

And firms with more than 2,000 employees will have to get approval from the authorities when they want to lay off 200 workers, the deputy director said.

Another important part of the plan is that newly laid-off workers will be given unemployment insurance instead of being handed over to the re-employment service centre, Zhai said.

According to official statistics, Shaanxi had, by the end of 2004, 3.32 million unemployed workers in towns and cities. The registered unemployment rate was 3.77 per cent at the end of last year.

(China Daily May 25, 2005)