Page 102 - DMGT516_LABOUR_LEGISLATIONS

Unit 4: Contract Labour (Regulation and Abolition) Act, 1986

Notes

Note It must be added here that according to the National Labour Law, the Chairman
of the Mediation Committee in an enterprise is a representative of the Trade Union. The

Arbitrator is a representative official of the Government.
Lay off & Retrenchment

The enterprise that lays off, or retrenches, bears the responsibility to pay the basic living
allowance, medical allowance etc. during the period (2-3 years) that the laid off spends at the
Rehabilitation Centre.

It is thus, clear that the law does not contemplate or permit “hire and fire”; there is no instant

and one-sided termination of responsibility to a worker who has been engaged on a written
contract.
Strikes

Trade Union Law in China makes no mention of strikes. It neither mentions them as a legal
instrument in the hands of the workers, nor prohibits them. The law makes no mention either
way. The other methods available to the workers have already been referred to: mutual talks,
approach to the Mediation Centre (Every enterprise is to have a statutory mediation centre
of which a representative of the Trade Union in the enterprise is the Chairman): Arbitration

(a representative official of the Government is the Arbitrator) and finally, the Peoples’ Court.

Note There is only one Trade Union in China, the ACFTU. When we referred to the
freedom to Trade Unions and the multiplicity of Trade Unions in India, we were told that
the ACFTU is the “people choice” and came into being as a part of the struggle of the
working class.

Social Security Schemes

1. Old age Pension Scheme: It covers 100 million workers and also 32 million retired workers.
The individual worker contributes 5-7% of wages and the employer contributes 20% of
wages to the insurance scheme. The Government does not contribute.
2. Medical Insurance: The contribution rate is 2% from employees and 6% from employers.

3. Workers Injury Scheme: This is the liability of employers.

4. Maternity Benefi ts: This is also the liability of the employer. But the benefits are provided

only for the first child, since China is following a policy of one child norm per couple.
5. Unemployment Insurance: This scheme was started in 1980s. The Employer pays 2% while
the employee pays 1% of the wages. The Government does not contribute but tries to make
good the deficit. Unemployment benefit is lower than the minimum wages, but higher than

the poverty line.

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