7,000 Huawei Staff in Mass Resignation

Some 7,000 employees of China's Huawei have been encouraged to resign from the company - and get rehired almost immediately afterwards. The move which was initially reported in the local newspapers has been alleged to be a way of avoiding labour laws which apply to long service staff, although Huawei denies this.

According to the media reports, the large-scale reshuffle, which only affects staff with at least eight years of service with the company started late in September and is expected to be completed by January, when the country's revised Law on Employment Contracts comes into effect. The employees are being offered a "resignation package" to encourage them to resign from the company.

"The group of Huawei employees who are being encouraged to leave have just two years ahead of them before they reach the 10-year employment mark, which would make them qualified for open-ended employment contracts in line with the new Labor Contract Law in the future," the lawyer told the Interfax news agency.

Currently, most Huawei staff are employed on contracts lasting between one and three years. Under the new law, long term staff would become effectively permanent and harder (but not impossible) to dismiss in the future where necessary.

Huawei for its part says that the move is nothing to do with the new law, and simply an adjustment in its human resources departments. The company said that early employees when the company was still young are one more generous pay and compensation packages than later employees and that this is causing resentment within the staff. The long serving staff would be reemployed on contracts similar to current terms - in exchange for a compensation package when they resign. The cost of the compensation package has been reported at around US$135 million.

Shenzhen's Labor and Social Securities Office is understood to be investigating the issue.

Posted to the site on 7th November 2007