LAW OF THE PEOPLE'S REPUBLIC OF
CHINA
ON EMPLOYMENT CONTRACTS
Adopted at the 28th Session of the Standing Committee of the 10th
National People's Congress on June 29, 2007
Effective from January 1, 2008
By Baker & MCKenzie
CHAPTER 1 GENERAL PROVISIONS
Article 1
This Law has been formulated in order to improve the employment
contract system, to specify the rights and obligations of the
parties to employment contracts, to protect the lawful rights and
interests of Employees and to build and develop harmonious and
stable employment relationships.
Article 2
This Law governs the establishment of employment relationships
between, and the conclusion, performance, amendment, termination
and ending of employment contracts by, organizations such as
enterprises, individual economic organizations and private
non-enterprise units in the People's Republic of China
("Employers") on the one hand and Employees in the People's
Republic of China on the other hand.
The conclusion, performance, amendment, termination and ending of
employment contracts by state authorities, institutions or social
organizations on the one hand and Employees with whom they
establish employment relationships on the other hand, shall be
handled pursuant to this Law.
Article 3
The conclusion of employment contracts shall comply with the
principles of lawfulness, fairness, equality, free will, negotiated
consensus and good faith.
A lawfully concluded employment contract is binding, and both the
Employer and the Employee shall perform their respective
obligations stipulated therein.
Article 4
Employers shall establish and improve internal rules and
regulations, so as to ensure that Employees enjoy their labor
rights and perform their labor obligations.
When an Employer formulates, revises or decides on rules and
regulations, or material matters, that have a direct bearing on the
immediate interests of its Employees, such as those concerning
compensation, work hours, rest, leave, work safety and hygiene,
insurance, benefits, employee training, work discipline or work
quota management, the same shall be discussed by the employee
representative congress or all the employees. The employee
representative congress or all the employees, as the case may be,
shall put forward a proposal and comments, whereupon the matter
shall be determined through consultations with the Trade union or
employee representatives conducted on a basis of equality.
If, during the implementation of an Employer's rule or regulation
or decision on a crucial matter, the Trade union or an employee is
of the opinion that the same is inappropriate, it or he is entitled
to communicate such opinion to the Employer, and the rule,
regulation or decision shall be improved by making amendments after
consultations.
Rules and regulations, and decisions on material matters, that
have a direct bearing on the immediate interests of Employees shall
be made public or be communicated to the Employees by the
Employer.
Article 5
The labor administration authorities of People's Governments at
the county level and above, together with the Trade union and
enterprise representatives, shall establish a comprehensive
tri-partite mechanism for the coordination of employment
relationships, in order to jointly study and resolve major issues
concerning employment relationships.
Article 6
A Trade union shall assist and guide Employees in the conclusion
of employment contracts with their Employer and the performance
thereof in accordance with the law, and establish a collective
bargaining mechanism with the Employer in order to safeguard the
lawful rights and interests of Employees.
CHAPTER 2 CONCLUSION OF EMPLOYMENT CONTRACTS
Article 7
An Employer's employment relationship with a Employee is
established on the date it starts using the Employee. An Employer
shall keep a register of employees, for reference purposes.
Article 8
When an Employer hires a Employee, it shall truthfully inform him
as to the content of the work, the working conditions, the place of
work, occupational hazards, production safety conditions, labor
compensation and other matters which the Employee requests to be
informed about. The Employer has the right to learn from the
Employee basic information which directly relates to the employment
contract, and the Employee shall truthfully provide the same.
Article 9
When hiring a Employee, an Employer may not retain the Employee's
resident ID card or other papers, nor may it require him to provide
security or collect property from him under some other guise.
Article
10
To establish an employment relationship, a written employment
contract shall be concluded.
In the event that no written employment contract was concluded at
the time of establishment of an employment relationship, a written
employment contract shall be concluded within one month after the
date on which the Employer starts using the Employee.
Where an Employer and a Employee conclude an employment contract
before the Employer starts using the Employee, the employment
relationship shall be established on the date on which the Employer
starts using the Employee.
Article
11
In the event that an Employer fails to conclude a written
employment contract with a Employee at the time its starts to use
him, and it is not clear what labor compensation was agreed upon
with the Employee, the labor compensation of the new Employee shall
be decided pursuant to the rate specified in the collective
contract; where there is no collective contract or the collective
contract is silent on the matter, equal pay shall be given for
equal work.
Article
12
Employment contracts are divided into fixed-term employment
contracts, open-ended employment contracts and employment contracts
to expire upon completion of a certain job.
Article
13
A "fixed-term employment contract" is an employment contract whose
ending date is agreed upon by the Employer and the Employee.
An Employer and a Employee may conclude a fixed-term employment
contract upon reaching a negotiated consensus.
Article
14
An "open-ended employment contract" is an employment contract for
which the Employer and the Employee have agreed not to stipulate a
definite ending date.
An Employer and a Employee may conclude an open-ended employment
contract upon reaching a negotiated consensus. If a Employee
proposes or agrees to renew his employment contract or to conclude
an employment contract in any of the following circumstances, an
open-ended employment contract shall be concluded, unless the
Employee requests the conclusion of a fixed-term employment
contract:
(1) The Employee has been working for the Employer for a
consecutive period of not less than 10 years;
(2) when his Employer introduces the employment contract system or
the state owned enterprise that employs him re-concludes its
employment contracts as a result of restructuring, the Employee has
been working for the Employer for a consecutive period of not less
than 10 years and is less than 10 years away from his legal
retirement age; or
(3) prior to the renewal, a fixed-term employment contract was
concluded on two consecutive occasions and the Employee is not
characterized by any of the circumstances set forth in Article 39 and items
(1) and (2) of Article 40
hereof.
If an Employer fails to conclude a written employment contract
with a Employee within one year from the date on which it starts
using the Employee, the Employer and the Employee shall be deemed
to have concluded an open-ended employment contract.
Article
15
An "employment contract with a term to expire upon completion of a
certain job" is an employment contract in which the Employer and
the Employee have agreed that the completion of a certain job is
the term of the contract.
An Employer and a Employee may, upon reaching a negotiated
consensus, conclude an employment contract with a term to expire
upon completion of a certain job.
Article
16
An employment contract shall become effective when the Employer
and the Employee have reached a negotiated consensus thereon and
each of them has signed or sealed the text of such contract.
The Employer and the Employee shall each hold one copy of the
employment contract.
Article
17
An employment contract shall specify the following matters:
(1) The name, domicile and legal representative or main person in
charge of the Employer;
(2) The name, domicile and number of the resident ID card or other
valid identity document of the Employee;
(3) The term of the employment contract;
(4) The job des cription and the place of work;
(5) Working hours, rest and leave;
(6) Labor compensation;
(7) Social insurance;
(8) Labor protection, working conditions and protection against
occupational hazards; and
(9) Other matters which laws and statutes require to be included
in employment contracts.In addition to the requisite terms
mentioned above, an Employer and a Employee may agree to stipulate
other matters in the employment contract, such as probation period,
training, confidentiality, supplementary insurance and benefits,
etc.
Article
18
If a dispute arises due to the fact that the rate or standards for
labor compensation or working conditions, etc. are not explicitly
specified in the employment contract, the Employer and the Employee
may renegotiate. If the negotiations are unsuccessful, the
provisions of the collective contract shall apply. If there is no
collective contract or the collective contract is silent on the
issue of labor compensation, equal pay shall be given for equal
work; if there is no collective contract or the collective contract
is silent on the issue of working conditions, the relevant
regulations of the state shall apply.
Article
19
If an employment contract has a term of not less than three months
but less than one year, the probation period may not exceed one
month; if an employment contract has a term of more than one year
and less than three years, the probation period may not exceed two
months; and if an employment contract has a term of not less than
three years or is open-ended, the probation period may not exceed
six months.
An Employer may stipulate only one probation period with any given
Employee.
No probation period may be specified in an employment contract
with a term to expire upon completion of a certain job or an
employment contract with a term of less than three months.
The probation period shall be included in the term of the
employment contract. If an employment contract provides for a
probation period only, then there is no probation period and the
term concerned shall be the term of the employment contract.
Article
20
The wages of a Employee on probation may not be less than the
lowest wage level for the same job with the Employer or less than
80 percent of the wage agreed upon in the employment contract, and
may not be less than the minimum wage rate in the place where the
Employer is located.
Article
21
An Employer may not terminate an employment contract during the
probation period unless the Employee is characterized by any of the
circumstances set forth in Article 39 and items
(1) and (2) of Article 40 hereof. If
an Employer terminates an employment contract during the probation
period, it shall explain the reasons to the Employee.
Article
22
If an Employer provides special funding for a Employee's training
and gives him professional technical training, it may conclude an
agreement specifying a term of service with such Employee.
If the Employee breaches the agreement on the term of service, he
shall pay liquidated damages to the Employer as agreed. The measure
of the liquidated damages may not exceed the training expenses paid
by the Employer. The liquidated damages that the Employer requires
the Employee to pay may not exceed the portion of the training
expenses allocable to the unperformed portion of the term of
service.
The reaching of agreement on a term of service between the
Employer and the Employee does not affect the raising of the
Employee's labor compensation during the term of service according
to the normal wage adjustment mechanism.
Article
23
An Employer and a Employee may include in their employment
contract provisions on confidentiality matters relating to
maintaining the confidentiality of the trade secrets of the
Employer and to intellectual property.
If a Employee has a confidentiality obligation, the Employer may
agree with the Employee on competition restriction provisions in
the employment contract or confidentiality agreement, and stipulate
that the Employer shall pay financial compensation to the Employee
on a monthly basis during the term of the competition restriction
after the termination or ending of the employment contract. If the
Employee breaches the competition restriction provisions, he shall
pay liquidated damages to the Employer as stipulated.
Article
24
The personnel subject to competition restrictions shall be limited
to the Employer's senior management, senior technicians and other
personnel with a confidentiality obligation. The scope, territory
and term of the competition restrictions shall be agreed upon by
the Employer and the Employee, and such agreement shall not violate
laws and regulations.
The term, counted from the termination or ending of the employment
contract, for which a person as mentioned in the preceding
paragraph is subject to competition restrictions in terms of his
working for a competing Employer that produces the same type of
products or is engaged in the same type of business as his current
Employer, or in terms of his establishing his own business to
produce the same type of products or engage in the same type of
business, shall not exceed two years.
Article
25
With the exception of the circumstances specified in Articles 22 and 23
hereof, an Employer may not stipulate with a Employee provisions on
the bearing of liquidated damages by the Employee.
Article
26
An employment contract shall be invalid or partially invalid
if:
(1) A party uses such means as deception or coercion, or takes
advantage of the other party's difficulties, to cause the other
party to conclude an employment contract, or to make an amendment
thereto, that is contrary to that party's true intent;
(2) The Employer disclaims its legal liability or denies the
Employee his rights; or
(3) Mandatory provisions of laws or administrative statutes are
violated.
If the invalidity or partial invalidity of the employment contract
is disputed, it shall be confirmed by a labor dispute arbitration
institution or a People's Court.
Article
27
If certain provisions of an employment contract are invalid and
such invalidity does not affect the validity of the remaining
provisions, the remaining provisions shall remain valid.
Article
28
If an employment contract is confirmed as invalid and the Employee
has already performed labor, the Employer shall pay the Employee
labor compensation. The amount of labor compensation shall be
determined with reference to the labor compensation of Employees in
the same or a similar position with the Employer.
CHAPTER 3 PERFORMANCE AND AMENDMENT OF EMPLOYMENT CONTRACTS
Article
29
The Employer and the Employee shall each fully perform its/his
obligations in accordance with the employment contract.
Article
30
Employers shall pay their Employees labor compensation on time and
in full in accordance with the employment contracts and state
regulations.
If an Employer falls into arrears with the payment of labor
compensation or fails to make payment in full, the Employee may, in
accordance with the law, apply to the local People's
Court for an order to pay; and the People's Court shall issue such
order in accordance with the law.
Article
31
Employers shall strictly implement the work quota standards and
may not compel or in a disguised manner compel Employees to work
overtime. If an Employer arranges for a Employee to work overtime,
it shall pay him overtime pay in accordance with the relevant state
regulations.
Article
32
Employees shall not be held in breach of their employment
contracts if they refuse to perform dangerous operations that are
instructed in violation of regulations or peremptorily ordered by
management staff of the Employer.
Employees have the right to criticize, report to the authorities
or lodge accusations against their Employers in respect of working
conditions that endanger their lives or health.
Article
33
Changes such a change in the name, legal representative or main
person in charge of, or an (the) investor(s) in, an Employer shall
not affect the performance of its employment contracts.
Article
34
If an Employer is merged or divided, etc., its existing employment
contracts shall remain valid and continue to be performed by the
Employer(s) which succeeded to its rights and obligations
Article
35
An Employer and a Employee may amend the provisions of their
employment contract if they so agree after consultations.
Amendments to an employment contract shall be made in
writing.
The Employer and the Employee shall each hold one copy of the
amended employment contract.
CHAPTER 4 TERMINATION AND ENDING OF EMPLOYMENT CONTRACTS
Article
36
An Employer and a Employee may terminate their employment contract
if they so agree after consultations.
Article
37
A Employee may terminate his employment contract upon 30 days'
prior written notice to his Employer. During his probation period,
a Employee may terminate his employment contract by giving his
Employer three days' prior notice.
Article
38
A Employee may terminate his employment contract if his
Employer:
(1) Fails to provide the labor protection or working conditions
specified in the employment contract;
(2) Fails to pay labor compensation in full and on time;
(3) Fails to pay the social insurance premiums for the Employee in
accordance with the law;
(4) Has rules and regulations that violate laws or regulations,
thereby harming the Employee's rights and interests;
(5) causes the employment contract to be invalid due to a
circumstance specified in the first paragraph of Article 26
hereof;
(6) Gives rise to another circumstance in which laws or
administrative statutes permit a Employee to terminate his
employment contract.
If an Employer uses violence, threats or unlawful restriction of
personal freedom to compel a Employee to work, or if a Employee is
instructed in violation of rules and regulations or peremptorily
ordered by his Employer to perform dangerous operations which
threaten his personal safety, the Employee may terminate his
employment contract forthwith without giving prior notice to the
Employer.
Article
39
An Employer may terminate an employment contract if the
Employee:
(1) Is proved during the probation period not to satisfy the
conditions for employment;
(2) Materially breaches the Employer's rules and
regulations;
(3) Commits serious dereliction of duty or practices graft,
causing substantial damage to the Employer;
(4) has additionally established an employment relationship with
another Employer which materially affects the completion of his
tasks with the first-mentioned Employer, or he refuses to rectify
the matter after the same is brought to his attention by the
Employer;
(5) causes the employment contract to be invalid due to the
circumstance specified in item (1) of the first paragraph of Article 26 hereof;
or
(6) Has his criminal liability pursued in accordance with the
law.
Article
40
An Employer may terminate an employment contract by giving the
Employee himself 30 days' prior written notice, or one month's wage
in lieu of notice, if:
(1) after the set period of medical care for an illness or
non-work-related injury, the Employee can engage neither in his
original work nor in other work arranged for him by his
Employer;
(2) The Employee is incompetent and remains incompetent after
training or adjustment of his position; or
(3) A major change in the objective circumstances relied upon at
the time of conclusion of the employment contract renders it
unperformable and, after consultations, the Employer and Employee
are unable to reach agreement on amending the employment
contract.
Article
41
If any of the following circumstances makes it necessary to reduce
the workforce by 20 persons or more or by a number of persons that
is less than 20 but accounts for 10 percent or more of the total
number of the enterprise's employees, the Employer may reduce the
workforce after it has explained the circumstances to its Trade
union or to all of its employees 30 days in advance, has considered
the opinions of the Trade union or the employees and has
subsequently reported the workforce reduction plan to the labor
administration department:
(1) Restructuring pursuant to the Enterprise Bankruptcy Law;
(2) Serious difficulties in production and/or business
operations;
(3) The enterprise switches production, introduces a major
technological innovation or revises its business method, and, after
amendment of employment contracts, still needs to reduce its
workforce; or
(4) Another major change in the objective economic circumstances
relied upon at the time of conclusion of the employment contracts,
rendering them unperformable.
When reducing the workforce, the Employer shall retain with
priority persons:
(1) Who have concluded with the Employer fixed-term employment
contracts with a relatively long term;
(2) Who have concluded open-ended employment contracts with the
Employer; or
(3) Who are the only ones in their families to be employed and
whose families have an elderly person or a minor for whom they need
to provide.
If an Employer that has reduced its workforce pursuant to the
first paragraph hereof hires again within six months, it shall give
notice to the persons dismissed at the time of the reduction and,
all things being equal, hire them on a preferential basis.
Article
42
An Employer may not terminate an employment contract pursuant to
Article
40 or Article
41 hereof if the Employee:
(1) is engaged in operations exposing him to occupational disease
hazards and has not undergone a pre-departure occupational health
check-up, or is suspected of having contracted an occupational
disease and is being diagnosed or under medical observation;
(2) Has been confirmed as having lost or partially lost his
capacity to work due to an occupational disease contracted or a
work-related injury sustained with the Employer;
(3) Has contracted an illness or sustained a non-work-related
injury, and the set period of medical care therefore has not
expired;
(4) Is a female employee in her pregnancy, confinement or nursing
period;
(5) Has been working for the Employer continuously for not less
than 15 years and is less than 5 years away from his legal
retirement age;
(6) Finds himself in other circumstances stipulated in laws or
administrative statutes.
Article
43
When an Employer is to terminate an employment contract
unilaterally, it shall give the Trade union advance notice of the
reason therefore. If the Employer violates laws, administrative
statutes or the employment contract, the Trade union has the right
to demand that the Employer rectify the matter. The Employer shall
study the Trade union's opinions and notify the Trade union in
writing as to the outcome of its handling of the matter.
Article
44
An employment contract shall end if:
(1) Its term expires;
(2) The Employee has commenced drawing his basic old age insurance
pension in accordance with the law;
(3) The Employee dies, or is declared dead or missing by a
People's Court;
(4) The Employer is declared bankrupt;
(5) The Employer has its business license revoked, is ordered to
close or is closed down, or the Employer decides on early
liquidation; or
(6) Another circumstance specified in laws or administrative
statutes arises.
Article
45
If an employment contract expires and any of the circumstances
specified in
Article 42
hereof applies, the term of the employment contract shall be
extended until the relevant circumstance ceases to exist, at which
point the contract shall end. However, matters relating to the
ending of the employment contract of a Employee who has lost or
partially lost his capacity to work as specified in item (2) of
Article 42
hereof shall be handled in accordance with state regulations on
work-related injury insurance.
Article
46
In any of the following circumstances, the Employer shall pay the
Employee severance pay:
(1) The employment contract is terminated by the Employee pursuant
to Article 38
hereof;
(2) The employment contract is terminated after such termination
was proposed to the Employee by the Employer pursuant to Article 36 hereof and
the parties reached agreement thereon after consultations;
(3) The employment contract is terminated by the Employer pursuant
to Article 40
hereof;
(4) The employment contract is terminated by the Employer pursuant
to the first paragraph of Article 41
hereof;
(5) The employment contract is a fixed-term contract that ends
pursuant to item (1) of
Article 44
hereof, unless the Employee does not agree to renew the contract
even though the conditions offered by the Employer are the same as
or better than those stipulated in the current contract;
(6) The employment contract ends pursuant to item (4) or (5) of
Article 44
hereof;
(7) Other circumstances specified in laws or administrative
statutes.
Article
47
A Employee shall be paid severance pay based on the number of
years worked with the Employer at the rate of one month's wage for
each full year worked. Any period of not less than six months but
less than one year shall be counted as one year. The severance pay
payable to a Employee for any period of less than six months shall
be one-half of his monthly wages.
If the monthly wage of a Employee is greater than three times the
average monthly wage of employees in the Employer's area as
published by the People's Government at the level of municipality
directly under the central government or municipality divided into
districts of the area1 where the Employer is located, the rate for
the severance pay paid to him shall be three times the average
monthly wage of employees and shall be for not more than 12 years
of work.
For the purposes of this Article, the term
"monthly wage" means the Employee's average monthly wage for the 12
months prior to the termination or ending of his employment
contract.
Article
48
If an Employer terminates or ends an employment contract in
violation of this
Law and the Employee demands continued performance of such
contract, the Employer shall continue performing the same. If the
Employee does not demand continued performance of the employment
contract or if continued performance of the employment contract has
become impossible, the Employer shall pay damages pursuant to Article 87
hereof.
Article
49
The state will take measures to establish a comprehensive system
that enables Employees' social insurance accounts to be transferred
from one region to another and to be continued in such other
region.
Article
50
At the time of termination or ending of an employment contract,
the Employer shall issue a proof of termination or ending of the
employment contract and, within 15 days, carry out the procedures
for the transfer of the Employee's file and social insurance
account.
The Employee shall carry out the procedures for the handover of
his work as agreed by the parties. If relevant provisions of this
Law require the Employer to pay severance pay, it shall pay the
same upon completion of the procedures for the handover of the
work.
The Employer shall keep terminated or ended employment contracts
on file for not less than two years, for reference purposes.
CHAPTER 5 SPECIAL PROVISIONS
SECTION 1 COLLECTIVE CONTRACT
Article
51
After bargaining on an equal basis, enterprise employees, as one
party, and their Employer may conclude a collective contract on
such matters as labor compensation, working hours, rest, leave,
work safety and hygiene, insurance, benefits, etc. The draft of the
collective contract shall be presented to the employee
representative congress or all the employees for discussion and
approval.
A collective contract shall be concluded by the Trade union, on
behalf of the enterprise's employees, and the Employer. If the
Employer does not yet have a Trade union, it shall
1 Translator's note: The phrase "of the area" does not appear in
the Chinese text. It has been added by us in view of the
context.
Conclude the collective contract with a representative put forward
by the Employees under the guidance of the Trade union at the next
higher level.
Article
52
Enterprise employees, as one party, and their Employer may enter
into specialized collective contracts addressing labor safety and
hygiene, protection of the rights and interests of female
employees, the wage adjustment mechanism, etc.
Article
53
Industry-wide or area-wide collective contracts may be concluded
between the Trade union on the one hand and representatives on the
side of the enterprises on the other hand in industries such as
construction, mining, catering services, etc. within areas below
the county level.
Article
54
After a collective contract has been concluded, it shall be
submitted to the labor administration authority. The collective
contract shall become effective upon the lapse of 15 days from the
date of receipt thereof by the labor administration authority,
unless the said authority raises any objections to the
contract.
A collective contract that has been concluded in accordance with
the law is binding on the Employer and the Employees. An
industry-wide or area-wide collective contract is binding on
Employers and Employees in the industry or in the area in the
locality concerned.
Article
55
The rates for labor compensation, standards for working
conditions, etc. stipulated in a collective contract may not be
lower than the minimum rates and standards prescribed by the local
People's Government. The rates for labor compensation, standards
for working conditions, etc. stipulated in the employment contract
between an Employer and a Employee may not be lower than those
stipulated in the collective contract.
Article
56
If an Employer's breach of the collective contract infringes upon
the labor rights and interests of the employees, the Trade union
may, in accordance with the law, demand that the Employer assume
liability. If a dispute arising from the performance of the
collective contract is not resolved following consultations, the
Trade union may apply for arbitration and institute an action
according to law.
SECTION 2 Placement
Article
57
Staffing firms shall be established in accordance with the
relevant provisions
of the Company Law and have registered capital of not less than
RMB
¥
500,000.
Article
58
Staffing firms are Employers as mentioned in this Law and shall
perform an Employer's obligations toward its Employees. The
employment contract between a staffing firm and a Employee to be
placed shall, in addition to the matters specified in Article 17 hereof,
specify matters such as the unit with which the Employee will be
placed, the term of his placement, his position, etc.
The employment contracts between staffing firms and the Employees
to be placed shall be fixed term employment contracts with a term
of not less than two years. Staffing firms shall pay labor
compensation on a monthly basis. During periods when there is no
work for Employees to be placed, the staffing firm shall pay such
Employees compensation on a monthly basis at the minimum wage rate
prescribed by the People's Government of the place where the
staffing firm is located.
Article
59
When placing Employees, staffing firms shall enter into staffing
agreements with the units that accept the Employees under the
placement arrangements ("Accepting Units"). The staffing agreements
shall stipulate the job positions in which Employees are placed,
the number of persons placed, the term of placement, the amounts
and methods of payments of labor compensation and social insurance
premiums, and the liability for breach of the agreement.
An Accepting Unit shall decide with the staffing firm on the term
of placement based on the actual requirements of the job position,
and it may not conclude several short-term placement agreements to
cover a continuous term of labor use.
Article
60
Staffing firms shall inform the Employees placed of the content of
the placement agreements.
Staffing firms may not pocket part of the labor compensation that
the Accepting Units pay to the Employees in accordance with the
placement agreement.
Staffing firms and the Accepting Units may not charge fees from
the Employees placed.
Article
61
If a staffing firm places a Employee with an Accepting Unit in
another region, the Employee's labor compensation and working
conditions shall be in line with the rates and standards of the
place where the Accepting Unit is located.
Article
62
Accepting Units shall perform the following obligations:
(1) Implement state labor standards and provide the corresponding
working conditions and labor protection;
(2) communicate the job requirements and labor compensation of the
Employees placed;
(3) Pay overtime pay and performance bonuses and provide benefits
appropriate for the job positions;
(4) Provide the placed Employees who are on the job with the
training necessary for their job positions; and
(5) In case of continuous placement, implement a normal wage
adjustment system.
Accepting Units may not in turn place the Employees with other
Employers.
Article
63
Placed Employees shall have the right to receive the same pay as
that received by Employees of the Accepting Unit for the same work.
If an Accepting Unit has no Employee in the same position, the
labor compensation shall be determined with reference to the labor
compensation paid in the place where the Accepting Unit is located
to Employees in the same or a similar position.
Article
64
Placed Employees have the right to lawfully join the Trade union
of their staffing firm or the Accepting Unit or to organize such
unions, so as to protect their own lawful rights and
interests.
Article
65
Placed Employees may terminate their employment contracts with
their staffing firms pursuant to Article 36 or 38
hereof.
If any of the circumstances provided for in Article 39 and items
(1) and (2) of Article 40 hereof
applies to a placed Employee, his Accepting Unit may return him to
the staffing firm, which may terminate its employment contract with
him in accordance with the relevant provisions of this Law.
Article
66
The placement of Employees shall generally be practiced for
temporary, auxiliary or substitute job positions.
Article
67
Employers may not establish staffing firms to place Employees with
themselves or their subordinate units.
Section 3 Part-Time Labor
Article
68
The term "part-time labor" means a form of labor for which the
compensation is chiefly calculated by the hour and where the
Employee generally averages not more than 4 hours of work per day
and not more than an aggregate 24 hours of work per week for the
same Employer.
Article
69
The two parties to part-time labor may conclude an oral
agreement.
A Employee who engages in part-time labor may conclude an
employment contract with one or more Employers, but a subsequently
concluded employment contract may not prejudice the performance of
a previously concluded employment contract.
Article
70
The two parties to part-time labor may not stipulate a probation
period.
Article
71
Either of the two parties to part-time labor may terminate the use
of the labor by notice to the other party at any time. No severance
pay shall be payable by the Employer to the Employee upon
termination of the use of the labor.
Article
72
The hourly compensation rate for part-time labor may not be lower
than the minimum hourly wage rate prescribed by the People's
Government of the place where the Employer is located.
The labor compensation settlement and payment cycle for part-time
labor may not exceed 15 days.
CHAPTER 6 MONITORING INSPECTIONS
Article
73
The State Council's labor administration authority shall be
responsible for overseeing the implementation of the employment
contract system nationwide. The labor administration authorities of
local People's Governments at the county level and above shall be
responsible for overseeing the implementation of the employment
contract system in their respective jurisdictions.
In the course of overseeing the implementation of the employment
contract system, the labor administration authorities of People's
Governments at the county level and above shall consider the
opinions of the Trade unions, the representatives on the side of
the enterprises and the authorities in charge of the industries
concerned.
Article
74
The labor administration authorities of local People's Governments
at the county level and above shall conduct monitoring inspections
of the implementation of the following aspects of the employment
contract system, in accordance with the law:
(1) Employers' formulation of rules and regulations that have a
direct bearing on the immediate interests of Employees, and the
implementation thereof;
(2) The conclusion and termination of employment contracts by
Employers and Employees;
(3) Compliance with relevant regulations on placement by staffing
firms and Accepting Units;
(4) Employers' compliance with state regulations on Employees'
working hours, rest and leave;
(5) Employers' payment of labor compensation as specified in the
employment contracts and compliance with minimum wage rates;
(6) Employers' enrollment in the various types of social insurance
and payment of social insurance premiums; and
(7) Other labor matters requiring monitoring inspections, as
specified in laws and administrative statutes.
Article
75
When the labor administration authority of a local People's
Government at the county level or above conducts a monitoring
inspection, it has the authority to review materials relating to
the employment contracts and collective contracts and conduct an on
the-spot inspection of the work premises. Both the Employer and the
Employees shall truthfully provide relevant information and
materials.
When working personnel of a labor administration authority conduct
a monitoring inspection, they shall show their IDs, exercise their
functions and powers according to law and enforce the law in a
well-disciplined manner.
Article
76
Such competent authorities as construction authorities, health
authorities, production safety regulators, etc. of People's
Governments at the county level and above shall, to the extent of
their respective purviews, oversee the implementation of the
employment contract system by Employers.
Article
77
A Employee whose lawful rights and interests have been infringed
upon shall have the right to request that the relevant authority
deal with the infringement according to law, or to apply for
arbitration and institute an action according to law.
Article
78
Trade unions shall safeguard the lawful rights and interests of
Employees in accordance with the law and monitor the performance of
the employment contracts and collective contracts by Employers. If
an Employer violates labor laws or statutes or breaches an
employment contract or collective contract, the Trade union has the
right to voice its opinion or require that the matter be rectified.
If a Employee applies for arbitration or institutes an action, the
Trade union shall provide support and assistance in accordance with
the law.
Article
79
All organizations and individuals are entitled to report
violations of this Law.
The labor administration authorities of People's Governments at
the county level and above shall timely check and handle the
violations reported and reward those persons whose reports are
valuable.
CHAPTER 7 LEGAL LIABILITY
Article
80
If an Employer's rule or regulation with a direct bearing on the
immediate interests of Employees violates laws or administrative
statutes, the labor administration authority shall order
rectification and give a warning. If the said rule or regulation
caused a Employee to suffer harm, the Employer will be liable for
damages.
Article
81
If the text of an employment contract provided by an Employer
lacks any of the mandatory clauses which this Law requires to be
included in such contracts or if an Employer fails to deliver the
text of the employment contract to the Employee, the labor
administration authority shall order rectification; if the Employee
suffered harm as a result thereof, the Employer will be liable for
damages.
Article
82
If an Employer concludes a written employment contract with a
Employee more than one month but less than one year after the date
on which it started using him, it shall each month pay to the
Employee twice his wage.
If an Employer fails, in violation of this Law, to conclude an
open-ended employment contract with a Employee, it shall each month
pay to the Employee twice his wage, starting from the date on which
an open-ended employment contract should have been concluded.
Article
83
If the probation period stipulated by an Employer with a Employee
violates this Law, the labor administration authority shall order
rectification. If the illegally stipulated probation has been
performed, the Employer shall pay compensation to the Employee
according to the time worked on probation beyond the statutory
probation period, at the rate of the Employee's monthly wage
following the completion of his probation.
Article
84
If an Employer violates this Law by retaining a Employee's
resident ID card or other papers, the labor administration
authority shall order the same returned to the Employee within a
specified period of time and impose a penalty in accordance with
the provisions of relevant laws.
If an Employer violates this Law by collection property from
Employees as security or under some other guise, the labor
administration authority shall order the same returned to the
Employees within a specified period of time and impose a fine on
the Employer of not less than RMB
¥
500 and not more than RMB
¥
2,000 for each person; If the Employees suffered harm as a result
of the said conduct on the part of the Employer, the Employer will
be liable for damages. If an Employer retains a Employee's file or
other Article
after the Employee has terminated or ended his employment contract
in accordance with the law, a penalty shall be imposed in
accordance with the preceding paragraph.
Article
85
If an Employer:
(1) Fails to pay a Employee his labor compensation in full and on
time as stipulated in his employment contract or prescribed by the
state;
(2) Pays labor compensation below the local minimum wage
rate;
(3) Arranges overtime without paying overtime pay; or
(4) Terminates or ends an employment contract without paying the
Employee severance pay pursuant to this Law; then the labor
administration authority shall order it to pay the labor
compensation, overtime pay or severance pay within a specified
period of time; if the labor compensation is lower than the local
minimum wage rate, the Employer shall pay the shortfall. If payment
is not made within the time limit, the Employer shall be ordered to
additionally pay damages to the Employee at a rate of not less than
50 percent and not more than 100 percent of the amount
payable.
Article
86
If an employment contract is confirmed as being invalid in
accordance with Article 26 hereof and
the other party suffers harm as a result thereof, the party at
fault shall be liable for damages.
Article
87
If an Employer terminates or ends an employment contract in
violation of this Law, it shall pay damages to the Employee at
twice the rate of the severance pay provided for in Article 47
hereof.
Article
88
If an Employer:
(1) uses violence, threats or unlawful restriction of personal
freedom to compel a Employee to work;
(2) Instructs in violation of rules and regulations, or
peremptorily orders, a Employee to perform dangerous operations
which threaten his personal safety;
(3) Insults, corporally punishes, beats, illegally searches or
detains a Employee; or
(4) provides odious working conditions or a severely polluted
environment, resulting in serious harm to the physical or mental
health of Employees; it shall be subjected to administrative
punishment; if the said conduct constitutes a criminal offense,
criminal liability shall be pursued according to law; if the
Employee suffers harm as a result of the said conduct on the part
of the Employer, the Employer will be liable for damages.
Article
89
If an Employer fails, in violation of this Law, to issue to a
Employee a certificate evidencing the termination or ending of his
employment contract, the labor administration authority shall order
rectification. If the Employee suffers harm as a result of such
failure, the Employer will be liable for damages.
Article
90
If a Employee terminates his employment contract in violation of
this Law or breaches the confidentiality obligations or competition
restrictions stipulated in his employment contract, and if such
violation or breach causes his Employer to suffer loss, he will be
liable for damages.
Article
91
If an Employer hires a Employee whose employment contract with
another Employer has not yet been terminated or ended, causing the
other Employer to suffer a loss, it shall be jointly and severally
liable with the Employee for damages.
Article
92
If a staffing firm violates this Law, the labor administration
authority and other relevant competent authorities shall order it
to rectify the situation. If the circumstances are serious, it
shall impose a fine of not less than RMB
¥
1,000 and not more than RMB
¥
5,000 for each person, and the administration for industry and
commerce shall revoke the business license. If the Employee(s)
placed suffer(s) harm, the staffing firm and the Accepting Unit
shall be jointly and severally liable for damages.
Article
93
An Employer that carries on business without the legal
qualifications therefore will be pursued according to law for its
legal liability for its illegal and criminal acts. If its Employees
have already performed labor, the Employer or its investor(s) shall
pay them labor compensation, severance pays and damages in
accordance with the relevant provisions of this Law. If the
Employees suffer harm as a result thereof, the said unit shall be
liable for damages.
Article
94
If an individual that contracts for the operation of a business
hires Employees in violation of this Law and a Employee suffers
harm as a result thereof, the organization that employed such
contractor shall be jointly and severally liable with the
contractor for damages.
Article
95
If a labor administration authority, another competent authority
or a member of its working personnel neglects its/his duties, fails
to perform its/his statutory duties or exercises its/his authority
in violation of the law, thereby causing harm to a Employee or
an
Employer, liability for damages shall be borne and the leading
official directly in charge and the other persons directly
responsible shall be subjected to administrative penalties in
accordance with the law; if a criminal offense is constituted,
criminal liability shall be pursued in accordance with the
law.
CHAPTER 8 SUPPLEMENTARY PROVISIONS
Article
96
Where laws or administrative statutes contain, or the State
Council has formulated, separate regulations concerning the
conclusion, performance, amendment, termination or ending of
employment contracts by and between institutions and those of their
working personnel that are subject to the employment system,
matters shall be handled in accordance with such regulations; in
the absence of such regulations, matters shall be handled in
accordance with this Law.
Article
97
Employment contracts concluded in accordance with the law before
the implementation of this Law and continuing to exist on the
implementation date of this Law shall continue to be performed. For
the purposes of item (3) of the second paragraph of Article 14 hereof, the
number of consecutive occasions on which a fixed-term employment
contract is concluded shall be counted from the first renewal of
such contract to occur after the implementation of this Law.
If an employment relationship was established prior to the
implementation of this Law without the conclusion of a written
employment contract, such contract shall be concluded within one
month from the implementation date of this Law.
If an employment contract existing on the implementation date of
this Law is terminated or ends after the implementation of this Law
and, pursuant to Article 46 hereof,
severance pay is payable, the number of years for which severance
pay is payable shall be counted from the implementation date of
this Law. If, under relevant regulations in effect prior to the
implementation of this Law, the Employee is entitled to severance
pay from the Employer in respect of a period preceding the
implementation of this Law, the matter shall be handled in
accordance with the relevant regulations that were in effect at
that time.
Article
98
This Law shall be implemented from January 1, 2008.