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Notice Regarding Further Improvement of the Work of Poverty Relief and the Re-employment of Workers - 1997

(Lao Bu Fa [1997] Document No. 166, Issued by Ministry of Labor, State Planning Commission, State Economic and Trade Commission, State Commission for Economic Restructure, Ministry of Finance, Ministry of Personnel, Ministry of Public Security, People's Bank of China, State Administration of Taxation, State Administration for Industry and Commerce, Letters and Complaints Bureaus of General Office of the CPC Central Committee, and General Office of the State Council All China Federation of Trade Unions)


People's Government of each province, autonomous region and municipality directly under the Central Government and relevant ministries, commissions and institutions directly under the State Council:

Recently, staff and workers in some enterprises have been confronted with financial difficulties and laid-off. This is a key problem arising in the course of deepening the reform of state-owned enterprises. The Central Committee of the Communist Party of China (CCCP) and the State Council are very concerned about this issue and have formulated a series of policies and regulations to resolve the problem. Local governments have accumulated a great deal of good experience in the implementation of such policies and regulations. They have taken many feasible measures to strengthen the organization and leadership of poverty relief and re-employment, adopt a responsibility system, gather funds from various channels, develop employment opportunities and emphasize employment services. It is notable that they closely combine poverty relief with re-employment and have achieved obvious results. Poverty relief and organizing the re-employment of staff and workers from struggling enterprises in the course of establishing and perfecting the socialist market economy system are time-consuming tasks. The task is especially difficult at this key time of deepening enterprise reform. It is necessary to increase the efficacy with which the Central Committee and State Councilís relevant policies and measures are implemented in order to solve these problems in a satisfactory manner and with a high sense of political duty. We hereby distribute the following notice regarding these issues:

I. Further Clarification of the Goals and Tasks of Poverty Relief and Re-employment

1. The work of poverty relief and re-employment shall be carried out in accordance with the principle of "resolving both principal and secondary problems". Struggling enterprises shall try their utmost to solve their problems by themselves and to closely combine poverty relief with the work of re-employment. At the same time, society shall also participate in the effort, and the government shall give necessary support in order to gradually form a system which secures a basic standard of living for staff and workers confronted with financial difficulties and which properly organizes re-employment.

2. The basic goal of poverty relief and re-employment is, in accordance with the mandates of establishing the socialist market economy in China and realizing the "two fundamental changes", to establish a regularized system of poverty relief and re-employment, form a systematic working procedure in order to conscientiously secure a basic standard of living for staff and workers confronted with financial difficulties, and ensure that out-of-work staff and workers are re-employed as soon as possible. These measures shall extricate such staff and workers from fundamentally difficult situations and create a stable and steady social environment for the development of reform.

3. At present, the main tasks of poverty relief and re-employment are to continue to establish and improve various systems with respect to the work of poverty relief and re-employment, take the necessary steps to ensure that the basic living standard of struggling staff and workers will not be lower than the local minimum standard of living and that laid-off staff and workers capable of working can participate in the re-employment projects, and to achieve a re-employment rate of 50% or above.

II. Reinforcement of the Basic Management of Poverty Relief and Re-employment

1. "People eligible for poverty relief" refers to the staff and workers, including the retired, who cannot get their salaries or retirement pensions from state-owned enterprises with completely or partially suspended production or at the edge of bankruptcy in the course of economic system transformation, and whose basic standard of living is lower than the minimum standard of living set by local authorities.

2. The standard of poverty relief to staff and workers as well as to the retired shall be decided in accordance with the minimum standard of living determined by local authorities.

3. Local departments shall organize investigations to conscientiously attempt to determine the exact number of struggling staff and workers and the number of laid-off personnel, as well as the demand of the local labor force market. The following matters shall be promptly investigated: the location of struggling staff and workers and laid-off personnel, their degree of financial difficulty, age, sex and labor skills. A filing system shall be created. The above work shall be adjusted according to any changes in conditions in order to form a dynamic system for managing struggling staff and workers and those who have been laid off. Enterprises, their administrative departments and the administrative offices of local districts and communities shall, together with local labor unions and labor departments, establish a network to carry out a statistical investigation of struggling or laid off staff and workers. An accurate and dynamic statistical system of information about the struggling or laid off staff and workers and the retired shall be established.

III. Adoption of Various Methods of Dispersing and Re-locating Laid Off Staff

1.Enterprise potential shall be tapped, and the enterprises themselves shall be guided and encouraged to disperse and re-locate laid-off workers of their own accord. Trade authorities and enterprises shall utilize existing sites, facilities and production and management projects to engage laid off staff in work which will help them to provide for themselves.

2. The capacities of labor management agents within each industry and trade shall be brought into play, laid-off staff shall be redistributed throughout industry and enterprise, and laid-off workers shall be organized into cooperative labor organizations.

3. Experimental cities with optimized capital structures shall learn from Shanghai and shall, in accordance with local conditions, organize and promote the prompt establishment of Re-employment Service Centers by industries and enterprises. Conditions permitting, large-scale enterprises or group enterprises, utilizing existing labor service companies, shall undertake the task of dispersion and shall be entrusted with laid-off workers in the name of a Re-employment Service Center. Local labor departments may, according to actual conditions and in the name of existing employment service institutions, also be entrusted with the laid-off staff and workers by the trades and enterprises unable to establish labor service companies, and shall provide re-employment services too.

4. Re-employment Service Centers shall, in accordance with the stipulations of the "Work Plan for the Merger and Acquisition of Enterprises, Declaration of Bankruptcy and Re-employment of Staff and Workers", be temporarily entrusted with the laid-off staff and workers by the enterprises. The number of laid-off staff accepted by any Re-employment Service Center shall be based on the principle of "taking in the laid-off staff and workers with regard to its dispersing ability; steadily taking in and quickly dispersing the laid-off staff and workers". Re-employment Service Centers shall, under the guidance of the labor department, provide laid-off staff with vocational introductions, employment guidance, professional training, and assistance with which they can provide for themselves through production, engage them in labor export program, supply basic living expenses, pay social insurance fees, and shall give support to the re-employment of workers as dictated by policy. Through the establishment of Re-employment Service Centers, local authorities shall make an effort to ensure that laid-off staff shall neither continue to stay on within their enterprises nor be thrown upon the mercy of society.

IV. Further Reinforcement of the Collection of Poverty Relief Funds and Ensuring the Basic Living Funds for the Staff of Struggling Enterprises

1. Local authorities shall, in accordance with the stipulations of the Zhong Ban Fa [1996] No. 29 document and local poverty relief needs, determine the percentage of individual income tax to be used in the poverty relief fund in order to secure the source of funds and facilitate the utilization thereof.

2. Local authorities and relevant departments shall work out plans to determine specific methods of supporting particular kinds of training, to lead and mobilize society's strengths in making donations and providing mutual assistance in taking care of and supporting staff and workers confronted with financial difficulty.

3. The leaders in charge of the work of poverty relief of each province, autonomous region and municipality directly under the central government shall enter into an agreement with commercial banks, determine the struggling enterprises which comply with the policy of "San Jia Tai" (funds or utilization of funds jointly contributed by competent trade authorities, central financial discount interests and wage loans provided by banks) in accordance with relevant regulations, and submit the names of such enterprises to the head offices of commercial banks for approval. Struggling enterprises directly under the central government in need of "San Jia Tai" may obtain basic living funds out of the contributions made by competent trade authorities, central financial discount interests and wage loans provided by banks. The specific method shall be selected by competent trade authorities after submission of the name list of enterprises in need of "San Jia Tai" to the Ministry of Finance and the head offices of the commercial banks.

V. Acceleration of the Establishment of Re-employment Funds and Increase in Efforts to Diversify and Find Places for Surplus Staff and Workers

1. Local governments shall, in accordance with the requirements of the "Report on the Work of the Government" approved by the Fifth Session of the Eighth National People's Congress and funds with regard to specific conditions, establish re-employment funds from contributions from local public finances, enterprises and social security.

2. The 111 experimental cities with optimized capital structure determined by the State Council should secure to carry out the re-employment funds for the laid-off staff and workers of the acquisition and bankrupt enterprises and the enterprises without the conditions of the acquisition and bankruptcy. The funds used for making arrangements for the staff and workers should, upon the enrollment of the laid-off staff and workers in the Re-employment Centers, be appropriated for unified use.

VI. Further Improvement of Poverty Relief Measures and Policy

1. The local governments shall provide preferential treatment to struggling staff and workers in their purchases of grain and oil, give preference to workers seeking employment on their own, make allowances for struggling staff and workers paying rent and water, electricity and medical bills, and paying for the schooling of their children.

2. Regarding struggling staff and workers and the laid-off staff and workers capable of labor who have not taken part in the production activities organized by enterprises without any reason on more than two occasions: they shall cease receiving welfare payments and other preferential treatment.

3. The local governments and relevant authorities should work out the plan of "relief through work", and decide upon a number of public welfare projects. These projects shall be expressly used for organizing struggling staff and workers to find "relief through work" in order to solve the basic problems which they face every day.

4. The various local governments shall strictly carry out the relevant provisions stipulated in the "Notice on Further Efforts Made to Maintain a Basic Standard of Living for the Retired Workers from Struggling Enterprises" (Lao Bu Fa [1996] No.408) in order to properly maintain a basic standard of living for retired workers from struggling enterprises. Regarding struggling enterprises participating in the overall social plan of insurance for the elderly which are unable to regularly pay the premiums of such insurance: if the accumulated amount of the insurance funds within the coverage of such overall plan is enough to pay the elderly pensions for six (6) months, the authorities governing the social insurance funds shall still pay old-age pensions to the retired or their basic life expenses each month. If the accumulated amount of these insurance funds is not enough to pay pensions to the elderly for six (6) months, measures should be taken to maintain a basic standard of living for the retired along with struggling staff and workers.

VII .Opening More Channels for Employment, Attaching Importance to the Policies of Support, and Increasing the Number of Job Opportunities

1. The local governments shall take the promotion of employment as the most important goal of local economic and social development and incorporate this promotion with macro-economic policy. Relevant authorities should, in full consideration of the demand on the expansion of employment as well as in light of economic and social development, jointly study and work out the plan of opening more channels for employment and increasing more job opportunities, and draft corresponding support policies. Special attention should be paid to opening up proper re-employment posts for laid-off staff and workers, and local governments should help laid-off staff and workers to find re-employment as soon as possible.

2. Various channels should be explored by taking advantage of the opportunities in the new economic growth areas such as tourism, electronic information, residential area development and property management of the State. In light of the state of natural resources, part of the labor force may be organized for work in the development of agriculture, forest, husbandry and fishery. Local governments should develop various economic approaches as well as existing medium/small-scale enterprises, support collective economies, cooperative economies and share-holder corporations, encourage laid-off staff and workers to establish private enterprises or individual commercial households, encourage laid-off staff and workers to find jobs on their own. Local governments shall continuously make greater efforts to develop the tertiary industry, especially in light of community construction beneficial to neighborhoods and the development of services which are important parts of daily life such as commercial shops, the food and beverage trade, nurseries and day care centers, repair centers, transportation and family administrative services in order to absorb more unemployed and laid-off staff and workers. Local governments shall consolidate and develop service enterprises for labor employment and encourage the labor service companies established by the factories to organize laid-off staff and workers to set up various economic entities to create more jobs for re-employment.

3. Support policies (i.e., reduction of and exemption from tax, registration with the industrial and commercial authorities, as well as those concerning production and operation centers, capital, bank loans and the compensatory use of State-owned assets) formulated for the labor employment service enterprises shall be carried out.

4. If laid-off staff and workers are temporarily engaged in business activities, the administration for industry and commerce may verify and issue temporary business licenses to them, and may grant them deductions in registration fees.

5. With respect to those finding jobs on their own, a reasonable amount of relocation fee shall be granted and capital support may be provided.

VIII. Improvement of Job Change and Position Transfer Training

1. With respect to laid-off staff and workers who are required to change their jobs or transfer their posts, the necessary vocational training for job change and post transfer should be provided.

2. The training plan should be worked out with regard to the demand in the labor market, after surveying, comprehending and grasping the number of the unemployed and laid-off staff and workers requiring vocational training for job change and post transfer.

3. The multi-level and multi-form training for job change and post transfer as well as the work of technical appraisal should be carried out by utilizing the existing vocational schools, employment training centers and the training entities of enterprises in light of the demands of the re-employment of the unemployed and laid-off staff and workers, and other educational and training institutions should be encouraged to train the unemployed and the laid-off staff and workers whose jobs shall be changed and whose posts shall be transferred. The trial work of the labor reserve system should be continuously done well in order to guarantee the successful implementation of the system.

IX. Acceleration of the Establishment of the Labor Force Market and Augmentation of Employment Services

1. The local authorities should enhance the overall plan and management of the labor force markets and improve the market employment system under the guidance of State policy. Special attention should be paid to the regulation of activities such as the recruitment, layoffs due to economic considerations and dismissal of employees by the employing units.

2. The overall plan for urban and rural employment should be maintained. The "program for putting the trans-region flow of the rural labor force in order" should be continuously advanced, and should be made a regular and institutionalized practice. The specific measures and procedures for the employment of the labor force in other areas should be worked out and perfected in light of local economic and social development conditions.

3. Vocational introductions should augment their service capacities, improve service facilities and means, establish special service items, improve service quality, provide services free of charge to the unemployed and laid-off staff and workers, and give them priority when introducing employment opportunities. The local authorities should give multi-form occupation guidance, assist the unemployed and laid-off staff and workers in revising their job-seeking ideas, and at the same time, assist the employing units to define the proper standards of employment and encourage them to give priority to the unemployed and laid-off staff and workers when hiring.

4. Local authorities should make greater efforts to collect unemployment insurance funds, efficiently manage and use these funds in order to guarantee a basic standard of living for the unemployed, and actively promote their re-employment.

5. The field of employment service should be further explored. The employment service should be extended to enterprises and neighborhoods, and should be carried out in a practical manner at the grass roots level.

X. Conscientious Improvement of Organization and Leadership in the Work of Poverty Relief and Re-employment

1. Local authorities and the relevant departments should, under the leadership of the Party Central Committee and the State Council and according to the principle of "those in charge of enterprises shall be responsible for them", advance the establishment of management at all levels and a hierarchical accountability system. The leading officials of the Party and Government of all the provinces, autonomous regions, municipalities directly under the Central Government and competent industrial departments within the Central Government should take the lead in establishing leadership teams to assist in poverty relief and re-employment. The leading officials of the Party and government of all prefectures, cities, districts and counties shall establish such organizations to lead and organize the work of poverty relief and re-employment in their own localities, level by level.

2. Local authorities shall rely on society as a whole to work hard to disperse and relocate the unemployed and laid-off staff and workers. They shall also advocate and encourage bringing the superior features of relevant departments and social organizations into full play, and shall encourage the contribution of their ideas and the exertion of their efforts for the re-employment of the unemployed and laid-off staff and workers. The departments of labor, planning, economic trade, economic restructuring, finance, personnel, public security, banks, taxation, industry and commerce, petition letters and trade unions should coordinate and cooperate jointly to succeed in the tasks of poverty relief and re-employment, each performing its own functions and giving full play to its strong points.

3. The leading officials of enterprises which have totally or partially suspended production and which have suffered heavy losses over a long period of time should enhance the ideological and political education of staff and workers, adopt efficient measures to maintain a basic standard of living for struggling staff and workers and assist the laid-off staff and workers in revising their job-seeking ideas in order to achieve re-employment.

4. Local authorities and relevant departments should actively create conditions in the respect of manpower, material resources and finance to provide the organizational guarantee and material foundation necessary to the further implementation of the work of solving financial difficulties and finding more jobs for re-employment.

5. The local authorities shall, through various measures, broadly propagate the policy of poverty relief and re-employment, mobilize all of society to pay attention to and assist in the work of solving financial difficulties and re-employment, and shall motivate struggling staff and workers to have confidence that the struggle with financial difficulties shall be won.

Ministry of Labor (sealed)

State Planning Commission (sealed)

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