Shenzhen Municipal Labor and Social Insurance Department has launched an investigation into Chinese communications equipment manufacturer Huawei, which reportedly persuaded 7000 of its employees to resign from the company in order to evade China's upcoming Labor Contract Law.

According to Chinese media, starting late September, more than 7000 senior employees of Huawei, all of whom had reportedly worked for more than eight years in the company, submitted their resignations. Their resignations are rumored to have been intentionally arranged by Huawei, who hoped that the employees could re-join the company by signing a new labor contract. The report said that Huawei had provided up to RMB1 billion to compensate the employees for doing so.

Huawei is rumored ot have wanted to evade China's new Labor Contract Law which will be enacted next year. After the senior employees rejoin the company, they will take their old posts and basic salaries, and the only difference is that their length of service for Huawei is shortened. Because they length of time with the company is shortened, the company doesn't need to contribute as much money to their social welfare, pension, and dismissal funds.

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