The Search Of The Influence Of The "Labor Contract Law" To Foreign Investment Enterprises And Countermeasures

As Chinese government has implemented the reform and opening-up policy for more than30years, the market economic system has further developed by the reform of the economic system. Under the situation of economic globalization, more and more foreign capitals was invested in China because of its rapid economic development, continuous improvement of living standard and the increasingly-expanded consumer market. Taking advantage of the cheap labor resources, Chinese government has carried out various preferential policy and attracted more foreign capitals by improving the environment for investment in order to accelerate the sustainable development of domestic economy.The main reason for foreign enterprises investing in China is to exploit the cheap labor force. However, as they are never satisfied with the profit, many foreign-invested enterprises chose illegal employment by signing no labor contract with the worker, imposing high labor intensity and paying differently for the same job, which is common in the foreign-invested enterprises and more typical in the small and medium-sized Korea-invested enterprises for its labor intensive characteristic.Those illegal employments not only infringe the right of Chinese workers and bring heavy burdens to their family but also cause disharmony in society and intervene the development of Chinese society. Under this circumstance, the Labor Contract Law was passed overwhelmingly in2007, which perfects the Chinese legal system of labor relations and promotes the construction of the harmonious society.The implement of this Law has both positive and negative influences on the foreign-invested enterprises. The negative influences lie in increasing their labor costs, weakening their right to make decisions and reducing their employment flexibility. However it has positive influence as it promotes the sustainable development and the localization of the foreign-invested enterprises in China as well as provides them with fairer development environment. As for this Law, different foreign-invested enterprises have different opinions as some resist it passively while others deal with it positively, which leads to different results. However, how can the small and medium-sized foreign-invested enterprises deal with this Law and what kind of strategies can they adopt? Based on the characteristics of the Korea-invested enterprises, this suggests them to improve rules and regulations, perfect contract, choose employment mode flexibly and enhance the management of human resources.As is discussed above, this paper presents a detailed exploration and analysis in five parts. The first part is the introduction to the paper, including the background and significance of this issue, Chinese and foreign literature review and the object, thoughts and methods of research. The second part analyses the main factors that influence the investment in China of Korea-invested enterprises, including the their investment situation in China and their internal and external reasons for investing in China, which lays a foundation for further discussion. The third part summaries the employment problems of the Korea-invested enterprises, including a brief introduction to the legislative process of the Labor Contract Law, the four problems that this Law points to and a separative analysis on the main employment problems of the small and medium-sized Korea-invested enterprises in China. The Forth part discusses the influences of the Labor Contract Law on the Korea-invested enterprises, including the explanation and analysis of certain contents of the Law, the specific negative and positive influences and the strategies that the Korea-invested enterprises adopt to cope with the Law by illustrating three cases.The fifth part studies the strategies that the small and medium-sized Korea-invested enterprises adopt to deal with the negative influences of the Law and the employment problems have.The last part is the conclusion to emphasize the necessity and importance to issue the Labor Contract Law and suggest the foreign enterprises to promote sustainable development by adjusting and improving rules, employment mode and management of human resources to avoid negative influence and take advantage of the positive influence.