Relocating? Winning employees over requires careful planning

By Wu Kun, Tiantai Law Firm

There are many reasons why companies migrate, including industry upgrading, environmental issues, expiration of a tenancy or demolition. The process of relocation is often complex, with management having to deal with issues such as disposal of land and premises, new production systems and operational qualifications, tax and environmental compliance, and last – but by no means least – employee placement.

The importance of employee placement in the relocation process cannot be overstated, as it involves the lawful rights and interests of all employees. Ensuring a smooth transition to the new location while avoiding high levels of resignations requires careful planning.

Form a team

Relocation is a top-to-bottom operation. Companies should form a team specially set up for and focused on the move. The make-up of the team should reflect the scale of the relocation, its timing and other major considerations. The primary function and procedure of the leading and other supporting departments should be clarified. When necessary, companies should also engage external professional agencies
to fully participate in the project.

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Organise employees

Before settling on a relocation plan, companies should comprehensively organise the information of their employees by, among others, family status, period of employment, performance, achievements and results, age, start date of labour contract, renewal of labour contract and term of office. Special care should be given to the special cases, such as female employees in pregnancy, maternity leave or breastfeeding, and employees with work-related injuries.

Understand employees’ needs

To formulate a better relocation plan and improve retention, companies must gain an early understanding of their employees’ opinions and needs. It is necessary to conduct at least one round of an internal survey to gauge employees’ willingness to follow the company to the new location. If employees largely refuse to co-operate with the relocation, companies should find out why.

In the actual relocation, employees in different age groups often have different needs. Factors such as geographic location, traffic, remuneration, family status, medical benefits and pension tend to affect employees’ willingness to relocate. More often than not, their economic considerations are more prominent than legal rights.

Formulate a plan

Companies should prepare a draft employee placement scheme based on the basic staff information, essential employee needs, employment model, wage level and laws and regulations. This should set out the scope of staff diversion, transfer and termination of labour contracts, along with specific compensation and the amount, including economic compensation (senior management too).

It should also set out arrangements for female employees in pregnancy, maternity leave or breastfeeding, one-time employment subsidy for the disabled and injured, payment in lieu of notice, year-end bonus and bonus for early signing, if any.

In order to retain technical talent and other core personnel, companies may boost their retention rates by adding cash bonuses, shuttle transport, flexible working hours, free lunches, improved accommodation, traffic allowances, priority enrollments and other incentives to the placement scheme, depending on the new premise’s location, the area’s economic development and public facilities.

In addition, companies are advised to preemptively prepare the relevant legal documents likely to come up during the relocation, including but not limited to resignation forms, certificates of resignation, the agreement of negotiated termination of labour relations, notice of terminating labour contract and labour contract modification agreement.

Develop contingency plans

Contingencies should be drawn up in anticipation of any security incident or mass disturbance in the course of relocation, including hiring security and medical care personnel during staff meetings, reserving the conference room for addressing and placating employees, and other emergency measures responding to any inciting of violence, mass protest or disruption to operations. A good set of contingencies would effectively protect the company from any emergencies or unexpected situations.

Communicate with government

Companies should communicate and file with the relevant government departments early on and, when necessary, assist with government involvement by acting as mediator. If downsizing is involved, under article 41 of the Labour Contract Law, companies must explain the situation to the labour union or all staff 30 days in advance, and file with the labour administration.

In the relocation project of a Hefei company that our team participated in, we maintained effective communication with the local labour administration from the beginning to avoid any mass disturbance. When formulating the relocation plan, we also worked closely with the local social security institutions, district governments, public security departments of both the original location and the destination. In case of any mass disturbance, with coordination with the relevant departments, we would have been able to arrange for on-site intervention.

Convene mobilisation meetings

Other than issuing the formal notice of demolition, where possible, companies are advised to convene mobilisation meetings, where they can listen to the employees’ concerns directly. In the Hefei relocation project, five mobilisation meetings were convened, targeting different types of position, for the approximately 400 staff affected. During the meetings, attended on a voluntary basis, the company explained the plans for retaining and terminating labour relations, followed by meticulous communication and Q&A sessions. Eventually, the relocation plan was approved by way of voting and more than 85% of employees signed up for their assigned post-relocation positions, exceeding our expectations.

In summary, corporate relocation is not so much a matter of legal procedure as humanistic caring. It is as much about winning hearts as cases. Early-stage preparations give companies the best chance at avoiding mass unpleasantness and achieving the intended goal. A feasible relocation plan must be drawn from a deep understanding of the employees’ needs and thorough consideration of the interests of all parties involved. Only then can employee placement be carried out in a legal, compliant and orderly manner.

Wu Kun is an associate at Tiantai Law Firm

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