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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
CHAPTER 1
GENERAL PROVISIONS
CHAPTER 2 CONCLUSION OF
EMPLOYMENT CONTRACTS
CHAPTER 3 PERFORMANCE AND AMENDMENT OF
EMPLOYMENT CONTRACTS
CHAPTER 4
TERMINATION AND ENDING OF EMPLOYMENT CONTRACTS
CHAPTER 5
SPECIAL PROVISIONS
CHAPTER 6 MONITORING INSPECTIONS
CHAPTER 7 LEGAL LIABILITY
CHAPTER 8 SUPPLEMENTARY PROVISIONS
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¨Cterm 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.