Public institutions to adopt contract system
More than 30 million employees at China's public institutions will bid farewell to their 'iron bowl' Tuesday as they will start to be employed on contract bases and will be included in the same pension system with business employees.
Similar to government departments but contrary to private businesses, public institutions in China are financed by the national budget and do not have earnings. They cover sectors such as education, science, culture, health, agriculture, forestry, water conservation and media sectors. Their employees enjoy life tenure and cannot be terminated.
But this will no longer be the case as the Regulation on Personnel Management for China's Public Institutions takes effect Tuesday. The biggest change is that the relationship between public institutions and their employees will be defined as contractual, meaning the end of life tenure.
According to the regulation, the time length of employment should not be less than three years and if an employee is absent from work for a consecutive 15 working days or more than 30 days in a year, the institution is entitled to terminate the employment contract.
The same is true when said employee does not show enough competence in his or her annual assessment and is reluctant to switch their post of duty when necessary, or fails to pass annual assessment for two consecutive years.
As the relationship becomes contract-based, employees for public institutions will also join the pension system previously reserved only for business employees beginning Tuesday.
China operates a "double-track" pension system. The State pays the contributions of employees of government organizations and institutions, but the rules are different for those working for other businesses, who have to pay themselves. Generally, employees of government organizations and institutions receive a much higher pension than regular business employees.