IJMB Journal – Abstarcts
International Journal of Management and Business
IJMB Volume VI, Issue 1
Implications of Changes in Chinese Contract Law for Foreign and Domestic Businesses: The Labour Contract Law (LCL)
Donovan A. McFarlane
H. Wayne Huizenga School of Business & Entrepreneurship
Nova Southeastern University
Surviving in the Chinese business market requires significant or full comprehension of the intermingling of law and policy (Yuanming & Kho, 2010). This paper examines the potential implications and impact of the new Chinese Labour Contract Law (LCL) on foreign corporations and domestic businesses in China. The author explores the new changes in Chinese contract law originating from provisions in the LCL and affecting employer-employee relationships. The author then outlines these major changes as they will specifically affect contractual relationships and describes and discusses how this shift in policy by the People’s Republic of China (PRC) gives new powers for bargaining to individual laborers. The implications for domestic and foreign businesses operating in China are discussed. The opposition of businesses and corporations to these provisions is explored in terms of problems, challenges and opportunities, and finally, the author offers some last thoughts on the potential of the LCL in terms of success and speculated consequences.
Keywords: People’s Republic of China (PRC), Labour Contract Law (LCL), European Union Chamber of Commerce in China (EUCCC), American Chamber of Commerce in Shanghai (ACCS), U.S.-China Business Council (USCBC).