The Economist has lost lots of credibility with this one.
I have lived and run companies in Shanghai for 8 years. The number for China is completely wrong. Firing someone in China is straightforward. There are rules to guard against improper firing, but they are fair and balanced.
The current maximum is 2 years salary and that is under rare conditions. Normally, you pay someone between 2 weeks to 2 months. The new labor laws generally stipulate 1 month pay for each year of service.
This is further negotiated, and generally reduced, by contract with the employee. And that assumes you did not fire them for a "reason" which can be put in contract as well.
You could have a contract saying employees must follow company policy. Company policy, in turn, may say employees must be clean and follow certain dress codes. You break company policy, you get fired, no excessive payout. Its very simple.
I have lived and run companies in Shanghai for 8 years. The number for China is completely wrong. Firing someone in China is straightforward. There are rules to guard against improper firing, but they are fair and balanced.
The current maximum is 2 years salary and that is under rare conditions. Normally, you pay someone between 2 weeks to 2 months. The new labor laws generally stipulate 1 month pay for each year of service.
This is further negotiated, and generally reduced, by contract with the employee. And that assumes you did not fire them for a "reason" which can be put in contract as well.
You could have a contract saying employees must follow company policy. Company policy, in turn, may say employees must be clean and follow certain dress codes. You break company policy, you get fired, no excessive payout. Its very simple.