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August 22, 2011

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Website staff in compensation talks

AROUND 50 employees of a group-buying website who were laid off on Friday are meeting with bosses today to try to agree compensation.

Management at Gaopeng, a joint-venture in China with Groupon, informed around 100 of its Shanghai workforce of between 300 and 400 that they had lost their jobs.

Some signed the agreement to leave, but others refused, accusing the company of failing to follow China's Labor Contract Law.

Under this, employees must be informed of layoffs at least 30 days in advance and offered a certain amount of compensation.

One Gaopeng employee, who asked to remain anonymous, told Shanghai Daily yesterday they would agree to leave if offered two months' salary as compensation.

Most employees were told to leave on Friday without prior notice, and with compensation ranging from five days' to two weeks' pay, said the employee.

Lao Chunyun, a lawyer specializing in labor regulations, said it's illegal for a company to give staff less than 30 days' notice if they're made redundant due to restructuring or economic difficulties.

The employer must compensate employees one-month's salary for breaking the clause, said Lao.

And if an employer needs to shed more than 20 employees, it must give 30 days' notice and submit a laying off plan to the local authorities.

"Only then can the labor contract be terminated," said Lao.

Groupon, the world's largest group-buying website, launched its joint venture in China in February, co-funded by Tencent and Yunfeng Ventures. Its Shanghai office opened in March.

Most employees who signed three-year contracts are in their probation period and can be dismissed if their work is unsatisfactory, according to a Gaopeng insider, who declined to be named.

The insider said the company told staff they had been doing a good job.

At least another 18 Gaopeng offices, including those in Hangzhou, Wuhan, and Fuzhou, have also made staff redundant this month.

However, Gaopeng's Beijing-based media officer, Lisa Zhang, said the Beijing headquarters has not received any reports of the layoffs.

Observers have said as Gaopeng tries to expand into second and third-tier cities it faces rising labor costs and the challenge of managing scattered sales teams.

It is a relatively small player in the country's cutthroat group-buying market, attracting only 14.9 million unique visitors in June.

This lags way behind market leaders Lashou and Meituan, which have around 50 million unique visitors, according to Beijing-based research firm Analysys International.


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