Employee status within the company decision-making process in China

: can lessons be learned from Germany and Britain?

Abstract

China’s economy has grown by leaps and bounds since the introduction of the Open-Door policy, and in this process, the Chinese Company Law (CCL) has played a non-negligible role in sustaining the growth of the economy since its enactment in 1993 and is also being continuously adjusted to provide ongoing support for it. Employees, as the largest contributors to sustained economic growth in the past and the holders of technology for future industrial upgrading, not only need protection of their legal rights and interests, such as labour laws, but now also need to re-examine the protection mechanisms that can be offered to employees within the company from the perspective of company law. Although the CCL established the system of employee directors and employee supervisors at its inception, in practice the legal effect achieved by the system has been quite limited.

Therefore, this thesis will explore the existing system of employee participation in the CCL, and will also examine Germany, as a representative example of stakeholder-oriented corporate governance, and the UK, which has adopted shareholder primacy, in order to provide thoughts for further improving employee participation in corporate decision-making process in China. In addition, this study will not only analyse the practical legislative effects of the system from the perspective of the specific design differences with the German codetermination system from which it has borrowed but will also analyse the particular impact of China’s distinctive culture on the operation of the system. This study will therefore rethink the theoretical basis adopted by the CCL and provide a foundation for employee participation in corporate decision-making at boardroom level, thereby offering ex ante protection of employee rights and interests within company law.