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PROVISIONS ON LABOUR MANAGEMENT IN CHINESE-FOREIGN EQUITY JOINT VENTURES

    Article 1  Labour management problems concerning Chinese-foreign equity
joint ventures (hereinafter referred to as "joint ventures") shall all be
handled in accordance with these Provisions, in addition to the pertinent
stipulations in Article 6 of the Law of the People's Republic of China on
Chinese-Foreign Equity Joint Ventures.

    Article 2  Matters pertaining to employment, dismissal and resignation of
the workers and staff members, tasks of production and other work, wages and
awards and punishment, working time and vacation, labour insurance and
welfare, labour protection and labour discipline in joint ventures shall be
stipulated in the labour contracts signed.

    A labour contract is to be signed by a joint venture and the trade union
organization in the joint venture collectively. A relatively small joint
venture may sign contracts with the workers and staff members individually.

    A signed labour contract must be submitted to the labour management
department of the government of the province, autonomous region or
municipality directly under the Central Government for approval.

    Article 3 (Note (1))  The workers and staff members of a joint venture
either recommended by the authorities in the locality in charge of the joint
venture or the labour management department, or recruited by the joint venture
itself with the consent of the labour management department, shall all be
selected by the joint venture through rigorous examinations.

    Joint ventures may run workers' schools and training courses to train
managerial personnel and skilled workers.

    Article 4  With regard to the workers and staff members who become
redundant as a result of changes in production and technical conditions of the
joint venture, those who fail to meet the requirements after training and are
not suitable for other jobs in the joint venture can be discharged. However,
this must be done in accordance with the stipulations in the labour contract
and the enterprise must give compensation to these workers.

    The dismissed workers and staff members will be assigned to other jobs by
the authorities in charge of the joint venture or the labour management
department.

    Article 5 (Note (2))  The joint venture may, according to the degree of
seriousness of the case, take action against those workers or staff members
whose violation of the rules and regulations of the enterprise has resulted in
certain bad consequences. Punishment by discharge must be reported to the
authorities in charge of the joint venture and the labour management
department for approval.

    Article 6 (Note (3))  With regard to the dismissal and punishment of
workers and staff members by the joint venture, the trade union has the right
to raise objections if it considers them unreasonable, and send
representatives to seek a solution through consultation with the board of
directors. Should the consultation fail to arrive at a solution, the matter
shall be handled in accordance with the procedures set forth in Article 14 of
these Provisions.

    Article 7  When workers and staff members of a joint venture, on account
of special circumstances, submit their resignation to the enterprise through
the trade union in accordance with the labour contract, the enterprise shall
give its consent.

    Article 8  The pay levels of workers and staff members in a joint venture
shall be determined at 120-150% of the real wages of workers and staff members
of state-owned enterprises of the same trade in the locality.

    Article 9  The wage standards, the forms of payment, and bonus and subsidy
systems are to be discussed and decided by the board of directors.

    Article 10  The rewards and welfare funds drawn by the joint venture from
the profits must be used as rewards and collective welfare and shall not be
diverted to other uses.

    Article 11  A joint venture must pay for the Chinese workers' and staff
members' labour insurance, cover their medical expenses and various kinds of
government subsidies in the line with the standards obtaining in state-owned
enterprises.

    Article 12  The employment of foreign workers and staff members and their
dismissal, resignation, pay, welfare and social insurance and other relevant
matters shall all be specified in the employment contracts.

    Article 13  Joint ventures must implement the relevant rules and
regulations of the Chinese Government on labour protection and ensure safety
in production and civilized production. The labour management department of
the Chinese Government has the right to supervise and inspect their
implementation.

    Article 14  Labour disputes occurring in a joint venture shall first of
all be solved through consultation by the two parties. If consultation fails
to arrive at a solution, either party or both parties may request arbitration
by the labour management department of the people's government of the
province, autonomous region or municipality directly under the Central
Government where the joint venture is located. Either party that disagrees to
the arbitration award may file a suit at a people's court.

    Article 15  The power of interpretation of these Provisions resides in the
State Bureau of Labour of the People's Republic of China.

    Article 16  These Provisions shall come into force as of the date of
promulgation.

Notes:

    Note (1)  The provisions of this Article are no longer effective. The
relevant provisions now in force are those contained in Article 1 of the
Circular of the General Office of the State Council on the Approval and
Transmission of the Proposals Submitted by the Ministry of Labour and the
Ministry of Personel Concerning Further Implementation of the Policy of
Granting Decision-making Power to Enterprises with Foreign Investment for the
Employment of Working Personel, issued on May 5, 1988. - The Editor

    Note (2)  The provision "Punishment by discharge must be reported to the
authorities in charge of the joint venture and the labour management
department for approval" as stipulated in this Article is no longer effective.
The relevant provisions now in force are those contained in Article 10 of the
Measures for Implementation of the Regulations on Labour Management in
Chinese-Foreign Equity Joint Ventures, promulgated by the Ministry of Labour
and Personnel with the approval of the State Council on January 19, 1984.
- The Editor

    Note (3)  The provisions of this Article are no longer effective. The
relevant provisions now in force are those contained in Article 5 of the
Circular of General Office of the State Council on the Approval and
Transmission of the Proposals Submitted by the Ministry of Labour and the
Ministry of Personel Concerning Further Implementation of the Policy of
Granting Decision-making Power to Enterprises with Foreign Investment for the
Employment of Working Personel, issued on May 5, 1988. - The Editor