Amid China's cooling economy, companies are increasingly facing the prospect of large-scale layoffs, a process that can lead to complicated interactions with both workers and the Chinese government. A June 26 article in China Law and Practice outlined points of friction between companies and their employees, including the recent case of Shenzhen Artigars Clothing & Leather, where workers have staged prolonged strikes twice since December. Most recently, in June, workers went on strike after the company fired long-term employees and removed equipment, triggering concerns of a shut-down.
Kevin Jones, Faegre Baker Daniels partner and leader of the labor and employment practice in China, said that these strikes have emerged in part because Shenzhen Artigars refused to engage in collective bargaining.
"[The workers] issued a request for collective bargaining, but on the day they were supposed to negotiate, the company had the police come in and arrest the leader of the strike," Jones said.
But companies need to be sensitive to more than just the needs of their employees. Jones also advised companies to be diligent in complying with local laws, even if they plan to shutter operations in China entirely.
"Closing the gates and leaving one day unannounced is one way to do it, but that's never advisable and those who do so are blacklisted," Jones said.
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