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China Daily

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Saturday, December 02, 2017, 12:17
Firms buying overseas need to keep staff on board
By Duan Ting
Saturday, December 02, 2017, 12:17 By Duan Ting

A general view shows a building of the China National Chemical Corp., also known as ChemChina, in Beijing on Feb 3, 2016. State-owned China National Chemical Corp. on Feb 3 offered US$43 billion in an agreed takeover for Swiss pesticide and seed giant Syngenta, in what would be by far the biggest-ever overseas acquisition by a Chinese firm. (FRED DUFOUR / AFP)

Chinese mainland companies need to be aware of employment rules to retain employees of businesses they acquire when they go overseas to invest, a law firm’s specialist in employment practice told China Daily.
Johnny Choi, partner and head of employment-China at DLA Piper UK Beijing Representative Office, elaborated that amid the wave of mainland corporations going out and acquiring overseas businesses, the new owners usually face the problem of retaining employees under the new structure. The lawyers suggest employers try to adjust the employment agreement to meet mutual requirements, including providing some incentives to encourage staff to remain, and adding certain consequences in the contract if employees don’t stay.
Choi said employees may leave because they don’t know what the Chinese owners are like, and what their culture and management style will be. Employee departure may impact the company’s business.
At present 80 to 90 percent of DLA Piper clients are foreign companies. Choi said their foreign clients faced the issue of retaining employees as well. Other cases Choi usually encountered are that employees of foreign companies sometimes engage in faults or violate sales functions. “Employers need to find most practical solutions to deal with the issues and reach settlement with employees,” said Choi, adding that employers need to follow standard rules including providing legal reason and evidence to terminate employment contracts.
On implications of the 19th National Congress of the Communist Party of China on employment practice, Choi said he does see the government’s focus on this area and the possibility of more flexible employment relations in the mainland as the central government prioritized improving people’s livelihood and enhancing training of employees to improve their skills.
Choi also said there had been a rise in intellectual property cases from technology companies on the mainland in recent years. Current clients are from industries such as technology, finance, retail and manufacturing. 

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