The Law, Contracts, Strikes, and Dispute Settlement

Abstract

Under the policy of economic reform there has been a graduate devolution of production and marketing decisions to individual enterprises. The Law on State-Owned Industrial Enterprises (“Enterprise Law”) of 1988 states that the manager, rather than the factory Communist Party Committee, is responsible for day-to-day management of the enterprise. The law speaks in general terms about the “managerial responsibility system,” which gives managers ultimate decision-making power over production and management. In practice many factory managers and party secretaries continue to be one and the same person. Other factory managers find it prudent to operate a kind of tripartite system, whereby company policies are thrashed out between factory management, the factory party committee, and worker congress or union representatives. The wisdom of this cooperation is reinforced by the fact that, according to the Enterprise Law, factory managers are subject to removal by the worker congresses for incompetence or malfeasance. Recently, the Chinese press has reported several such removals. Moreover, close working relations are enhanced since, in almost all cases, managers, union officials, and party officials are all members of the party committee.