by Toffler

Toffler

Toffler

Contract Negotiations

Having read numerous books and articles on contract negotiations in China, I thought I had a good familiarity with the process…until it came time to negotiate my own (employment) contract.  A common theme among literature discussing contract negotiations in China is after all the issues had been discussed and settled, the Chinese partner comes back to the table and starts renegotiating various issues as if they had never been settled or they were having second thoughts or were trying to extract additional concessions from the foreigner.  This exactly happened to me. All of terms of my employment were discussed during my interview, about a week later I was presented with a contract (even after I started working), and I reviewed it.  Generally it looked fine, though there were a few details I wanted adjusted, but still I would agree to it.  Then they came back to me and say ‘Oh wait, there’s a mistake in that one.  You are supposed to work 6 days per week.’  I’m sorry, there’s no way that’s a mistake.  That’s a huge mistake to make.  That’s a difference of 50+ days per year.  Not to mention it’s against Chinese labor laws, which limits the work week to 5 days and 40 hours.

Though they wrote it off as a miscommunication, I took it as a contract negotiation tactic and came prepared to meet them at the bargaining table.  In Chinese negotiations, one must be extremely patient.  The Chinese don’t have the same sense of urgency to meet market demands, nor of urgency to beat competitors to market, nor of being bothered by the extreme amounts of time that can be wasted in negotiating contracts.  They’ll outlast almost any foreigner on patience just waiting for the concessions they hope for.  At this point, having remembered what I read about contract negotiation in China, I was prepared to bargain hard but also be as patient as necessary until my legs collapsed under me while working.

As I discussed with other friends working in China, the Chinese try to extract as much out of the foreigner as possible.  This is true in Joint-Ventures as well, where the Chinese partner tries to retain as much control as possible and get technology transfers, etc.  As far as employment, in the case of someone I know, they’ve asked her to apply for and teach an additional class and write all her own teaching materials (which of course they will keep and use in the future).  According to her contract, presumably, she must follow all reasonable orders, but is doubling your teaching time when you’re already teaching 15-20 hours per week reasonable?  But if she doesn’t do as they say, she will be fired and in doing so also lose her chance to obtain her masters degree.  The company fully knowing this, is using this to their advantage, to extract extra effort from the foreigner without any additional compensation.  Though according to my contract I must work unpaid overtime (if necessary), I have no intention of being sucked into one of these schemes, especially not before I’ve even signed my contract.  Therefore, I’m prepared to stand my ground on this issue and ensure a manageable work week.
Perhaps because of the industry or maybe the Chinese are becoming more reasonable or perhaps because this company has done employment contract negotiations with a foreigner before or perhaps because they value me, there was no need for all my anticipation.  The GM came to me the next day and said ‘you only want to work 5 days, that’s fine.  Just work hard.’  Wow!  So reasonable.  Today the HR Mgr came to me and didn’t seem very happy I would only work 5 days per week, but since the GM agreed, he had no choice.  (Was this another negotiation technique?  His disapproval of the situation?  I thought HR people were supposed to work for the benefit of the employees.)  Nonetheless, a satisfactory end result without the serious negotiations I anticipated, but I did drop the other contract issues I qualms about as a 5-day work week is far more important to me.

So my advice is, seek out other’s advice and experience to the greatest extent possible before going into any contract negotiations with the Chinese.  It may save you a lot of money and headaches.  Then, be prepared for anything, from the most outrageous demands to the most reasonable compromises and if you find the other side meeting you half-way, respond with appropriate accommodation.

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