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Asia employment law bulletin 2020


State council issues opinion on employment policies

Although China managed to surpass its annual national target for the number of jobs created within the first 11 months of 2019 by 16.3%, the outlook for 2020 is less optimistic. In its annual “economy blue book” commentary published on 9 December 2019, the Chinese Academy of Social Sciences named the slowdown in economic growth and the ongoing trade conflict with the United States as two of the main factors disrupting China’s economic development in 2020.

In December 2019, the State Council of China issued its Opinion on Further Stabilizing Employment (the Opinion), which outlined its assessment of the labour environment in China and policy direction going into the next year. The issuance of the Opinion indicates that the government is taking a proactive approach and emphasising the importance of a stable employment situation, in order to pre-emptively manage anticipated economic disruptions in the coming year.

Amongst other things, the Opinion stated the aim of implementing policies to broaden aid to stabilise employment and reduce the cost of obtaining social insurance coverage for unemployment and occupational injury by April 2021.

The Opinion further expressed support for enterprises to collectively bargain alternative measures to redundancies, involving salaries, working hours, shift rotation and provision of onsite training.

To encourage businesses to recruit currently unemployed people, the Opinion mentioned the implementation of a one-off subsidy for enterprises that enter into an employment contract (for a term of at least one year) with persons who have been unemployed in the past six months. The subsidy is expected to be implemented only in target geographical regions for the 2020 calendar year.

Additionally, the Opinion encouraged the development of new working models, including temporal, part-time, seasonal and other forms of flexible arrangements. In order to achieve this, the elimination of unreasonable restrictions on working flexibility is stated to be a priority.

Update to draft data security assessment measures impacts on the cross-border transfer of employee data

While entering into the age of “big data”, China is looking to refine its legal system to facilitate better protections for personal information. In June 2019, the Cyberspace Administration of China (CAC) issued its latest draft of the Measures for Security Assessment of Cross-border Transfer of Personal Data (the Security Assessment Measures). This latest revision shows the impact of the internationalisation of data protection: for example, the latest draft requires network operators (which generally includes employers in relation to personal data of employees) to give data subjects (e.g. employees) enforceable contractual rights against the unlawful transfer of their personal data, demonstrating the influence of the European General Data Protection Regulation in China.

The latest draft Security Assessment Measures also demonstrates China’s increasing awareness of the need to regulate the digital aspects of foreign investment, whether inbound or outbound. While not specific to an employment context, the latest revisions impose a significantly more cumbersome approval requirement in relation to data transfers and will cause wide-ranging disruption not only for international companies operating in China, but also domestic companies with operations overseas.

Unlike the previous versions, which had only required operators of “critical information infrastructure” to obtain regulatory approval for transfers of personal data outside of China (except for certain high volume transfers), the latest draft Security Assessment Measures require all network operators to obtain prior approval from local CAC branches for each cross-border transfer (with an exception for repeat or continuous transfers to the same recipient). The transferring party will also need to re-apply for approval every two years.

Fan Li, Freshfields Shanghai 

Jacky Zhu, Freshfields Shanghai

River He, Freshfields Shanghai