China changes worker representation requirements

China’s new Company Law includes significant changes to various aspects of company management in China from establishment to dissolution, such as capital contribution and reduction, share transfer, shareholder rights protection, and corporate governance—including additional worker representation requirements. This issue brief sets out the information companies should know about these important new revisions, provides guidance on how companies can work with their suppliers in China to implement them, and highlights the potential positive impact these changes will have on worker representation in China.

Previously, only state-owned enterprises were required to have worker representation at the corporate level. The Company Law now includes the requirement to establish worker councils with greater decision-making power, giving workers a stronger voice in decisions that affect them, such as company strategy and development of workplace policies. However, companies are also encouraged to pay attention to other aspects of the revisions in this legislation, which cover changes in more than 100 articles of the relevant laws, as these changes significantly impact the establishment, management, and dissolution of any workplace within the country.