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2008-04-28 12:24 |
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Order the President of the People’s Republic of China
(No. 65)
The Employment Contract Law of the People’s Republic of China, which was adopted at the 28th Session of the Standing Committee of the Tenth National People’s Congress of the People’s Republic of China on June 29, 2007, is hereby promulgated and shall come into force as of January 1, 2008.
President of the People’s Republic of China Hu Jintao
June 29, 2007
Employment Contract Law of the People’s Republic of China
(Adopted at the 28th Session of Standing Committee of the Tenth National People’s Congress of the People’s Republic of China on June 29, 2007)
Contents
Chapter I General Provisions Chapter II Formation of an Employment Contract Chapter III Fulfillment and Change of an Employment Contract Chapter IV Dissolution and Termination of an Employment Contract Chapter V Special Provisions Section 1 Collective Contract Section 2 Worker Dispatch Section 3 Part-time Employment Chapter VI Supervision and Inspection Chapter VII Legal Liabilities Chapter VIII Supplementary Provisions
Chapter I General Provisions
Article 1This Law is enacted for the purposes of improving the employment contract system, clarifying the rights and obligations of both parties to the employment contracts, protecting the legitimate rights and interests of the employees and establishing and developing a harmonious and stable employment relationship.
Article 2 This Law shall apply to the establishment of employment relationship between enterprises, individual economic organizations, private non-enterprise entities and other organizations (hereafter referred to as the employing entities) and the employees thereof, and to the formation, fulfillment, change, dissolution or termination of employment contracts.
The state organs, public institutions, social organizations and the employees between whom an employment relationship is established shall observe this Law in the formation, fulfillment, change, dissolution or termination of employment contracts.
Article 3 The principle of lawfulness, fairness, equality, free will, negotiation for agreement and good faith shall be observed in the formation of an employment contract.
An employment contract concluded in accordance with the law shall have a binding force. The employer and the employee shall perform the obligations as stipulated in the employment contract.
Article 4 An employer shall establish a sound system of employment rules so as to ensure its employees enjoy the employment rights and perform the employment obligations.
Where an employer formulates, amends or decides rules or important events concerning the remuneration, working time, rest, vacation, work safety and sanitation, insurance and welfare, training of employees, work discipline or management of labor quota is directly relating to the interests of the employees thereof, such rules or important event shall be discussed at the general meeting of employees or all employees, who shall put forward proposals and opinions. The employer shall make decisions upon equal negotiation with the labor union or with the employees’ representatives.
During the process of ution of a decision about a rule or about an important event, if the labor union or the employees deem it improper, it (they) may require the employer to amend or improve it through negotiations.
The employer shall make an announcement of the rules and important events directly relating to the interests of the employees or inform the employees.
Article 5 The labor administrative department of the people’s government at the county level or above shall, together with the labor union and the representatives of the enterprise, establish a sound three-party mechanism of employment relationship and shall jointly seek to solve the major problems relating to employment relationship.
Article 6 The labor union shall assist and direct the employees and the employers to conclude and fulfill employment contracts and establish a collective negotiation mechanism with the employers so as to maintain the lawful rights and interests of the employing entities.
Chapter II Formation of Employment Contracts
Article 7 An employer establishes an employment relationship with an employee from the date of start to use the employee. It shall prepare a roster of employers for reference.
Article 8 When an employer hires an employee, it shall faithfully inform him of the work contents, conditions and location, occupational harm, work safety state, remuneration, and other information about which the employee requires to be informed. The employer has the right to know the basic information directly relating to the employer and the employment contract, the employee shall faithfully provide such information.
Article 9 When an employer hires an employee, it shall not detain his identity card or other certificates, nor may it require him to provide a guaranty or collect property from him under any other excuse.
Article 10 A written employment shall be concluded in the establishment of an employment relationship.
Where an employment relationship has already been established, but no written employment contract has been concluded simultaneously, a written employment contract shall be concluded within one month from the date of start to use the employee.
Where an employer and an employee conclude an employment contract prior to the employment, the employment relationship is established from the date of start to use the employee.
Article 11 Where an employer fails to conclude a written employment contract when it starts to use an employee, if the remuneration stipulated between it and the employee is not clear, the remuneration to the new employee shall conform to the provisions of the collective contract. If there is no collective contract or if there is no such stipulation in the collective contract, the principle of equal pay for equal work shall be observed.
Article 12 Employment contracts are classified into the fix-term employment contract, employment contract without a fixed term and the employment contract based on the time limit for the completion of a particular task.
Article 13 The term “fixed-term employment contract” refers to the employment contract in which the employer and the employee stipulate the time of termination of the contract.
The employer and the employee may conclude a fixed-term employment contract upon negotiation.
Article 14 The term “employment contract without a fixed term” refers to the employment contract in which the employer and the employee stipulate no certain time of termination of the contract.
An employer and an employee may, through negotiations, conclude an employment contract without a fixed term. Under any of the following circumstances, if the employee proposes or agrees to renew or conclude an employment contract, an employment contract without a fixed term shall be concluded unless the employee proposes to conclude a fixed-term employment contract: 1. The employee has already worked for the employer for 10 consecutively full years; 2. When the employer initially adopts the employment contract system or when a state-owned enterprise re-concludes the employment contract due to restructuring, the employee has already worked in this employer for 10 consecutively full years and he attains to the age which is less than 10 years up to the statutory retirement age; or 3. The employment contract is to be renewed after two fixed-term employment contracts have been concluded consecutively, and the employee is not any of the circumstances as mentioned in Article 39 and Article (1) and (2) of Article 40 of this Law.
If the employer fails to sign a written employment contract with an employee after the lapse of one full year from the date of start to use him, it shall be deemed that the employer and the employee has concluded an employment contract without a fixed term.
Article 15 The term “employment contract based on the time limit for the completion of a particular task” refers to the employment contract in which the employer and the employee stipulate that the time period of the contract shall be based on the completion of a particular task.
An employer and an employee may, upon negotiation, conclude employment contract based on the completion of a particular task.
Article 16 An employment contract shall be agreed by the employer and the employee and shall come into effect after the employer and the employee affix their signatures or seals to the text of the employment contract.
The employer and the employee shall each hold one copy of the text of the employment contract.
Article 17 An employment contract shall include the following clauses: 1. The employer’s name, domicile, legal representative or major person-in-charge; 2. The employee’s name, domicile, number of identity card or number of any other valid identity certificate; 3. The time limit for the employment contract; 4. The work contents and address; 5. The work time, rest and vocation; 6. The remunerations; 7. The social security; 8. The employment protection, work conditions, and protection against and prevention of occupational harm; and 9. Other items that shall be included in the employment contract under any law or regulation.
Apart from the essential clauses as prescribed in the preceding paragraph, the employer and the employee may, in the employment contract, stipulate the probation period, training, confidentiality, supplementary insurances, welfares and treatments, as well as other items.
Article 18 If the remunerations, work conditions and other criterions are not expressly stipulated in the employment contract and if any dispute is triggered, the employer and the employee may re-negotiate with each other. If no agreement is reached through negotiations, the provisions of the collective contract shall be followed. If there is no collective contract or if there is no such stipulation about the remuneration, the principle of equal pay for equal work shall be observed. If there is no collective contract or if there is no such stipulation about the work conditions and other criterions in the collective contract, the relevant provisions of the state shall be followed.
Article 19 If the term of an employment contract is not less than 3 months but less than 1 year, the probation period shall not exceed one month. If the term of an employment contract is not less than one year but less than 3 years, the probation period shall not exceed 2 months. For an employment contract with a fixed term of 3 years or more or without a fixed term, the probation term shall not exceed 6 months.
An entity can only stipulate one probation period with a same employee.
For an employment contract based on the completion of a particular task or with a fixed term of less than 3 months, no probation period may be stipulated.
The probation period shall be included in the term of an employment contract. If there is only a stipulation on the probation period in an employment contract, the probation period shall be null and void, and it shall be the term of the employment contract.
Article 20 The wage of an employee during the probation period shall not be lower than the minimum wage for the same post of the same entity or not lower than 80% of the wage stipulated in the employment contract, nor may it be lower than the minimum wage of the place where the employer is located.
Article 21 During the probation period, except that the employee is under any of the circumstances as described in Article 39 and Article 40 (1) and (2), the employer shall not dissolve the employment contract, it shall make an explanation.
Article 22 Where an employer pays special training expenses for the special technical training of an employee, it shall reach an agreement on the service period with the employee.
If the employee violates the stipulation on the service period, he shall pay the employer a penalty for breach of contract. The amount of penalty for breach of contract shall not exceed the training fees provided by the employer. The penalty for breach of contract which the employer demands the employee to pay shall not exceed the training expenses attributable to the service period unfulfilled.
The service period stipulated by the employer and the employee does not affect the promotion of the remuneration of the employee during the probation period under the normal wage adjustment mechanism.
Article 23 The employer and the employee may stipulate in the employment contract matters such as keeping confidential the business secrets and intellectual property of the employer.
For an employee who has the obligation of keeping secrets, the employer and the employee may stipulate non-competition clauses in the employment contract or in the confidentiality agreement and come to an agreement that, when the employment contract is dissolved or terminated, the employee shall be given economic compensations within the non-competition period. If the employee violates the stipulation on non-competition, it shall pay the employer a penalty for breach of contract.
Article 24 The persons under non-competition shall be limited to an employer’s senior mangers, senior technicians and other employees who have the obligation to keep secrets. The scope, geographical range and time limit for non-competition shall be stipulated by the employer and the employer. The stipulation on non-competition shall not be contrary to any law or regulation.
After the dissolution or termination of an employment contract, the non-competition period for any of the persons as mentioned in the preceding paragraph to work in any other employer producing or engaging in products of the same category or engaging in business of the same category as this employer shall not exceed two years.
Article 25 Except for the circumstances as prescribed in Articles 22 and 23 of this Law, the employer shall not stipulate with the employee that the employee shall pay the penalty for breach of contract.
Article 26 The following employment contracts are invalid or are partially invalid if: 1. a party employs such means as deception or coercion, or taking advantage of the other party’s difficulties, to force the other party to conclude an employment contract, or to make an amendment thereto, that is contrary to that party’s true will; 2. the employer disclaims its legal liability or denies the employee’s rights; or 3. mandatory provisions of laws or administrative regulations are violated.
If there is any dispute over the invalid or partially invalid employment contract, it shall be subject to determination by the labor dispute arbitration institution or by the people’s court.
Article 27 The invalidity of any part of an employment contract does not affect the validity of the other parts thereof. The other parts shall still remain valid.
Article 28 If an employment contract is confirmed invalid and if the employee has already worked for the employer, the employer shall pay the employee remunerations. The amount of remunerations shall be determined by analogy to the remuneration to the employees taking up the same or similar posts of this entity.
Chapter III Fulfillment and Change of Employment Contract
Article 29 An employer and an employee shall, under the stipulations in the employment contract, fully perform their respective obligations.
Article 30 An employer shall, under the contractual stipulations and the provisions of the state, timely pay its employees the full amount of remunerations.
Where an employer defers or fails to pay the full amount of remunerations, the employee may apply to the local people’s court for an order of payment. The people’s court shall issue an order of payment in accordance with the law.
Article 31 An employer shall strictly ute the criterion on labor quota, it shall not force any employee to work overtime or do so in a disguised form. If the employer arranges overtime work, it shall pay the employee for the overtime work under the relevant provisions of the state.
Article 32 If the employee refuses to perform dangerous operations under the illicit command or forcibly order of the manager of the employer, he shall not be deemed to have violated the employment contract.
An employee may criticize, expose to the authorities or charge against the employer if the employer’s work conditions may endanger their life safety and health.
Article 33 An employer’s change of its name, legal representative, key person-in-charge or investor shall not affect the fulfillment of the employment contracts.
Article 34 In the case of combination or split-up, the original employment contracts of the employer still remain valid. Such employment contracts shall be performed by the employer succeeding to the rights and obligations of the aforesaid employer.
Article 35 An employer and an employee may modify the contents stipulated in the employment contract if they so agree upon negotiations. The modifications to the employment contract shall be made in writing.
The employer and the employee shall each hold one copy of the text of post-modification employment contract.
Chapter IV Dissolution and Termination of Employment Contracts
Article 36 An employer and an employee may dissolve the employment contract if they so agree upon negotiations.
Article 37 An employee may dissolve the employment contract if he notifies in writing the employer 30 days in advance. During the probation period, an employee may dissolve the employment contract if it notifies the employer 3 days in advance.
Article 38 Where an employer is under any of the following circumstances, the employees may dissolve the employment contract: 1. It fails to provide labor protection or work conditions as stipulated in the employment contract; 2. It fails to timely pay the full amount of remunerations; 3. It fails to pay social security premiums for the employees; 4. Its rules are contrary to any law or regulation and impair the rights and interests of the employees; 5. An employment contract is invalid due to the circumstance as mentioned in Article 26 (1) of this Law; or 6. Any other circumstance as prescribed by any law or administrative regulation under which the employment contract may be dissolved.
In the event that an employer forces any employee to work by violence, by threat or by illegally limiting his personal freedom, or that the employer illicitly commands or forces an employee to perform dangerous operations which may endanger his personal safety, the employee may immediately dissolve the employment contract without notifying the employer in advance.
Article 39 Where an employee is under any of the following circumstances, the employer may dissolve the employment contract: 1. It is proved that he does not meet the recruitment conditions during the probation period; 2. He seriously violates the rules of the employer; 3. He causes any severe damage to the employer because he seriously neglects his duties or seeks private benefits; 4. He simultaneously establishes an employment relationship with other employers and may seriously affect his completion of the tasks of this entity, or he refuses to make a correction though the employer has pointed it out; 5. The employment contract is invalidated due to the circumstance as mentioned in Item (1), paragraph 1, Article 26 of this Law; and 6. He is subject to criminal liabilities in accordance with the law.
Article 40 Under any of the following circumstances, the employer may dissolve the employment contract if it notifies in writing the employee himself 30 days in advance or after it pay the employee an extra month’s wages: 1. The employee is sick or is injured for a non-work-related reason, he cannot take up the original post after the expiration of the prescribed period of medical treatment, nor can he assume any other post arranged by the employer; 2. The employee is incompetent to his post and is still so upon training or upon change of his post; or 3. The objective situation, on which the conclusion of the employment contract is based, has changed considerably, the employment contract is unable to be performed and no agreement on changing the contents of the employment contract is reached after negotiations between the employer and the employee.
Article 41 Under any of the following circumstances, if it is necessary to cut down 20 or more employees, or if it is necessary to cut down less than 20 employees but which accounts for 10% of the total number of the employees, the employer shall, 30 days in advance, make an explanation to the labor union or to all employees. After it has solicited the opinions of the labor union or of the employees, it may cut down the number of employees upon reporting the employee reduction plan to labor administrative department:
1. It is under revitalization under the Enterprise Bankruptcy Law; 2. It encounters serious difficulties in production and business operation; 3. The enterprise changes products, makes important technological renovation or adjusts the form of business operation, and it is still necessary to cut down the number of employees after the employment contract is changed; 4. The objective economic situation, on which the employment contract is based, has changed considerably and it is unable to perform the employment contract.
The following employees shall be given a priority to be kept when the employer cuts down the number of employees: 1. Those who have concluded a fixed-term employment contract with a long time period 2. Those who have concluded a employment contract without fixed term; and 3. Those whose family has no other employee and has old men or minors to support.
After the employer intends to hire new employees within 6 months after it cuts down the number of employees in accordance with the first paragraph of this Article, it shall notify the employees cut down and shall, in the equal conditions, give a priority to the employees cut down.
Article 42 An employer shall not dissolve the employment contract under Articles 40 and 41 of this Law if an employee: 1. is engaging in operations exposing him to occupational disease hazards and has not undergone a occupational health check-up before he leaves his post, or is suspected of having 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 or a work-related injury during his employment with the employer ; 3. has contracted an illness or sustained a non-work-related injury, and the prescribed period of medical treatment therefor 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 as prescribed in laws or administrative regulations
Article 43 Where an employer unilaterally dissolves an employment contract, it shall notify the labor union of the reasons. If the employer violates any law, administrative regulation or stipulations of the employment contract, the labor union has the power to require the employer to make a correction. The employer shall consider the opinions of the labor union and notify in writing the labor union about the relevant result.
Article 44 An employment contract terminates if: 1. the employment contract has expired; 2. the employee has began to enjoy the basic old-age insurance treatments; 3. the employee is deceased, or is d dead or missing by the people’s court; 4. the employer is d bankrupt; 5. the employer has its business license revoked, is ordered to close down or is dissolved, or the employer makes a decision of liquidation ahead of the schedule; or 6. other circumstances prescribed in laws or administrative regulations occur.
Article 45 If an employment contract expires and it is under any of the circumstances as described in Article 42 of this Law, the term of employment contract shall be extended as at the disappearance of the relevant circumstance. However, the matters relating to the termination of the employment contract of an employee who has lost or partially lost his capacity to work as prescribed in Article 42 (2) of this Law shall be handled in accordance with pertinent provisions on work-related injury insurance.
Article 46 The employer shall, under any of the following circumstances, pay the employee an economic compensation: 1. The employee dissolves the employment contract in pursuance of Article 38 of this Law; 2. The employer proposes to dissolve the employment contract, and it reaches an agreement with the employee on the dissolution thereof through negotiations; 3. The employer dissolves the employment contract in accordance with Article 40 of this Law; 4. The employer dissolves the employment contract in accordance with the first Paragraph of Article 44 of this Law; or 5.The employment contract is a fixed–term contract that terminates according to Article 44 (1) of this Law, unless the employee refuses 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 is terminated under Article 44 (4) and (5) of this Law; or 7. Other circumstances as prescribed in laws and administrative regulations.
Article 47 An employee shall be given an economic compensation on the basis of the number of years he has worked for the employer at the rate of one month’s wage for each full year he worked. Any period of not less than six months but less than one year shall be counted as one year. The economic compensations payable to an employee for any period of less than six months shall be one-half of his monthly wage. If the monthly wage of an employee is higher than three times the average monthly wage of employees as announced by the people’s government at the level of municipality directly under the central government or at the level of districted city where the employer is located, the rate for the economic compensations paid to him shall be three times the average monthly wage of employees and shall be for not more than 12 years of work.
The term “monthly wage” as mentioned in this Article refers to the employee’s average monthly wage for the 12 months prior to the dissolution or termination of his employment contract.
Article 48 If an employer dissolves or terminates an employment contract in violation of this Law and the employee demands continued fulfillment of the contract, the employer shall do so. If the employee does not so demand or if continued fulfillment of the employment contract is impossible, the employer shall pay compensation to him in accordance with Article 87 of this Law.
Article 49 The state shall take measures to establish a comprehensive system that ensure that the employees’ social security relationship can be transferred from one region to another and can be continued in such other regions.
Article 50 At the time of dissolution or termination of an employment contract, the employer shall issue a certification for the dissolution or termination of the employment contract and complete, within 15 days, the procedures for the transfer of the employee’s archives and social security relationship.
The employee shall complete the procedures for the handover of his work as agreed between both parties. If relevant provisions of this Law require the employer to pay an economic compensation, it shall make a payment upon completion of the procedures for the handover of the work.
The employer shall preserve the employment contracts, which have been dissolved or terminated, for not less than two years for reference purposes.
Chapter V Special Provisions
Section 1 Collective Contracts
Article 51 Upon equal negotiations, the enterprise employees, as one party, and the employer may conclude a collective contract on such matters as remuneration, working hours, rest, vacation, work safety and hygiene, insurance, benefits, etc. The draft of the collective contract shall be presented to the general meeting of employees or all the employees for discussion and approval.
A collective contract shall be concluded by the labor union, on behalf of the enterprise employees, and the employer. If the employer does not have a labor union yet, the contract shall be concluded between the employer and a representative chosen by the employees under the guidance of the labor union at the next higher level.
Article 52 The enterprise employees, as one party, and the employer may enter into specialized collective contracts regarding the work safety and hygiene, protection of the rights and interests of female employees, the wage adjustment mechanism, etc.
Article 53 Industrial or regional collective contracts may be concluded between the labor unions and representatives of enterprises in industries such as construction, mining, catering services, etc. in regions at or below the county level.
Article 54 After a collective contract has been concluded, it shall be submitted to the labor administrative department. The collective contract shall become effective after the lapse of 15 days from the date of receipt thereof by the labor administrative department, unless the said department raises any objections to the contract.
A collective contract that has been concluded in accordance with the law is binding on both the employer and the employees. An industrial or regional collective contract is binding on both the employers and employees in the industry or in the region.
Article 55 The criterions for remunerations, working conditions, etc. as stipulated in a collective contract shall not be lower than the minimum criterions as prescribed by the local people’s government. The criterions for remunerations, working conditions, etc. as stipulated in the employment contract between an employer and an employee shall not be lower than those as specified 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 labor union may, in accordance with the law, demand the employer to bear the liability. If a dispute arising from the performance of the collective contract is not resolved after negotiations, the labor union may apply for arbitration and lodge a lawsuit in pursuance of law.
Section 2 Worker Dispatch
Article 57 Worker dispatch service providers shall be established in accordance with the Company Law and have registered capital of not less than RMB 500,000 yuan.
Article 58 Worker dispatch service providers are employers as mentioned in this Law and shall perform an employer’s obligations toward its employees. The employment contract between a worker dispatch service provider and a worker to be dispatched shall, in addition to the matters specified in Article 17 of this law, specify such matters as the entity to which the worker will be dispatched, the term of his placement, post, etc.
The employment contracts between a worker dispatch service provider and the workers to be dispatched shall be fixed-term employment contract with a term of not less than two years. The worker dispatch service provider shall pay the remunerations on a monthly basis. During periods when there is no work for the workers, the worker dispatch service providers shall pay such workers compensation on a monthly basis at the minimum wage prescribed by the people’s government of the place where the worker dispatch service providers is located.
Article 59 To dispatch workers, a worker dispatch service provider shall enter into dispatch agreements with the entity that accepts the workers under the dispatch arrangement (hereinafter referred to as the “accepting entity”). The dispatch agreements shall stipulate the posts to which the workers are dispatched, the number of persons to be dispatched, the term of dispatch, the amounts and terms of payments of remunerations and social security premiums, and the liability for breach of agreement.
An accepting entity shall decide with the worker service dispatch provider on the term of dispatch based on the actual requirements of the posts, and it shall not dismember a continuous term of labor use into two or more short-term dispatch agreements.
Article 60 A worker dispatch service provider shall inform the workers dispatched about the content of the dispatch agreements.
No worker dispatch service provider may skimp any remunerations that an accepting entity pays to the workers in accordance with the dispatch agreement.
No worker dispatch service provider or accepting entity may charge any fee against any dispatched workers.
Article 61 If a worker dispatch service provider assigns a worker to an accepting entity in another region, the worker’s remuneration and work conditions shall be in line with relevant criterions of the place where the accepting entity is located.
Article 62 An accepting entity shall perform the following obligations: 1. To implement state labor standards and provide the corresponding working conditions and labor protection; 2. To communicate the job requirements and labor compensations for the dispatched workers; 3. To pay overtime remunerations and performance bonuses and provide benefits relevant to the post; 4. To provide the placed employees who assume the posts with required training; and 5. To implement a normal wage adjustment system in the case of continuous placement.
No accepting entity may in turn dispatch the workers to any other employer.
Article 63 The workers dispatched shall have the right to receive the same pay as that received by employees of the accepting entity for the same work. If an accepting entity has no employee in the same post, the remunerations shall be determined with reference to that paid in the place where the accepting entity is located to employees at the same or a similar post.
Article 64 The workers dispatched have the right to join the labor union of the worker dispatch service provider or of the accepting entity or to organize such unions, so as to protect their own lawful rights and interests.
Article 65 A worker dispatched may, in accordance with Articles 36 and 38 of this Law, dissolve the employment contract between him and the worker dispatch service provider.
Where a worker dispatched is under any of the circumstances as mentioned in Article 39 and Article 40 (1) and (2), the accepting entity may return the worker to the worker dispatch service provider, the worker dispatch service provider may dissolve the employment contract between it with the worker.
Article 66 The workers shall generally be dispatched for temporary, auxiliary or substitute posts.
Article 67 No accepting entity may establish any worker dispatch service provider to dispatch workers to it and to its subordinates.
Section 3 Part-time Employment
Article 68 The term “part-time employment” means a form of labor for which the remuneration is mainly calculated on hourly basis, the average working hours of a worker per day shall not exceed 4 hours and the aggregate working hours 24 hours per week for the same employer shall not exceed 24 hours.
Article 69 Both parties to part-time employment may reach an oral agreement.
A worker who engages in part-time employment may conclude an employment contract with one or more employers, but an employment contract concluded subsequently may not prejudice the performance of an employment contract previously concluded.
Article 70 No probation period may be stipulated by both parties to part-time employment.
Article 71 Either of the parties to part-time employment may inform the other party of the termination of labor at any time. At the time of termination of part-time employment, the employer will pay no economic compensation to the employee.
Article 72 The criterions for the calculation of part-time employment on hourly basis shall not be lower than the minimum hourly wage rates as prescribed by the people’s government of the place where the employer is located.
The maximum remuneration settlement and payment cycle for part-time employment shall not exceed 15 days.
Chapter VI Supervision and Inspection
Article 73 The labor administrative department of the State Council shall be responsible for the supervision and inspection of the implementation of the system of employment contracts throughout the country.
The labor administrative department of the local people’s governments at the county level and above shall be responsible for the supervision and inspection of the implementation of the system of employment contracts within their respective administrative area.
During the supervision and inspection of the implementation of the system of employment contracts, the labor administrative departments of the people’s governments at the county level and above shall solicit the opinions of the labor unions, enterprise representatives and relevant industrial administrative departments.
Article 74 The labor administrative department of the local people’s government at the county level or above shall exercise supervision and inspection in respect of the implementation of the system of employment contracts: 1. The employers’ formulation of rules and regulations directly related to the interests of workers, and the implementation thereof; 2. The formation and dissolution of employment contracts by employers and workers; 3. The compliance with relevant regulations on placement by worker dispatch service providers and the accepting entities; 4.The employers’ compliance with provisions of the state on workers’ working hours, rest and vacation; 5. The employers’ payment for remuneration as specified in the employment contracts and compliance with the minimum wage criterions; 6. The employers’ participation in the social security and payment for social security premiums; and 7. Other labor supervision matters as prescribed by laws and regulations.
Article 75 During the supervision and inspection process, the labor administrative department of the people’s government at the county level or above has the power to consult the materials relevant to the employment contracts and collective contracts and to conduct on-the-spot inspections to the work places. The employers and employees shall faithfully provide pertinent information and materials.
When the functionaries of the labor administrative department conduct an inspection, they shall show their certificates, exercise their duties and powers pursuant to law and enforce the law in a well-disciplined manner.
Article 76 The relevant administrative departments of construction, health, work safety supervision and administration, etc. of the people’s governments at the county level and above shall, under their respective functions, supervise and administer the employers’ implementation of the system of employment contracts.
Article 77 For any employer whose lawful rights and interests are impaired, he may require the relevant department to deal with the case, or apply for an arbitration or lodge a lawsuit.
Article 78 A labor union shall protect the employees’ legitimate rights and interests and supervise the employer’s fulfillment of the employment contracts and collective contracts. If the employer violates any law or regulation or breaches any employment contract or collective contract, the labor union may put forward its opinions and require it to make a correction. If the employee applies for arbitration or lodges a lawsuit, the labor union shall support and help him in pursuance of law.
Article 79 Any organization or individual may expose violations of this law. The labor administrative departments of the people’s governments at the county level and above shall timely verify and deal with such violations and shall grant awards to the meritorious persons.
Chapter VII Legal Liabilities
Article 80 If an employer’s rule directly related to the employees’ interests is contrary to any law or regulation, the labor administration department shall order it to make a correction and give it a warning. If the said rule causes any damage to the employees, the employer shall bear the liability for compensation.
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 department shall order it to make a correction. If any damage is caused to the employee, the employer shall bear the liability for compensation.
Article 82 If an employer concludes a written employment contract with an employee more than one month but less than one year after the date on which it started using him, it shall pay to the worker his monthly wages at double amount.
If an employer fails, in violation of this Law, to conclude with an employee an employment contract, it shall pay to the employee his monthly wage at double amount, starting from the date on which an employment contract without fixed term should have been concluded.
Article 83 If the probation period stipulated by an employer with an employee violates this Law, the labor administration department shall order the employer to make a correction. 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 Where an employer violates this Law due to detaining the resident identity cards or other certificates of the employees, the labor administrative department shall order it to return the said certificates to the employees within a time limit and shall punish it in accordance with the relevant law.
Where an employer violates this Law due to collecting property from employees in the name of guaranty or in any other excuse, the labor administrative department shall order it to return the said property to the employees within a time limit and fine it not less than 500 yuan but not more than 2,000 yuan for each person. If any damage is caused to the employees, the employer shall be liable for compensation.
When an employee dissolves or terminates the employment contract in pursuance of law, if the employer retains the archives or other articles of the employees, it shall be punished in accordance with the provisions of the preceding paragraph.
Article 85 Where an employing entity is under any of the following circumstances, the labor administrative department shall order it to pay the remunerations, overtime remunerations or economic compensations within a time limit. If the remuneration is lower than the local minimum wage, the employer shall pay the shortfall. If payment is not made within the time limit, the employer shall be ordered to pay an extra compensation to the employee at a rate of not less than 50 percent and not more than 100 percent of the payable amount: 1. Failing to pay an employee his remunerations in full amount and on time as stipulated in the employment contract or prescribed by the state; 2. Paying an employee the wage below the local minimum wage; 3. Arranging overtime work without paying overtime remunerations; or 4. Dissolving or terminating an employment contract without paying the employee the economic compensation under this Law.
Article 86 Where an employment contract is confirmed invalid under Article 26 of this Law, if any damage is caused to the other party, the party at fault shall be liable for compensation.
Article 87 If the employer violates this Law due to dissolving or terminating the employment contract, it shall pay a compensation to the employee at the rate of twice the economic compensations as prescribed in Article 47 of this Law.
Article 88 Where an employer is under any of the following circumstances, it shall be given an administrative punishment. If any crime is constituted, it shall be subject to criminal liabilities. If any damage is caused to the employee, the employer shall be liable for compensation: 1. To force the employee to work by violence, threat or illegal limitation of personal freedom; 2. To illegally command or force any employee to perform dangerous operations endangering the employee’s personal safety; 3. To insult, corporally punish, beat, illegally search or detains any employee; or 4. To provide bad working conditions or a severely polluted environment, resulting in serious damages to the physical or mental health of employees;
Article 89 Where an employer violates this Law due to failure to issue to an employee a written certificate for the dissolution or termination of an employment contract, it shall be ordered to make a correction by the labor administrative department. If any damage is caused to the employee, it shall be liable for compensation.
Article 90 Where an employee violates this Law due to dissolution of the employment contract, or violates the stipulations of the employment contract about the confidentiality obligation or non-competition, if any loss is caused to the employer, he shall be liable for compensation.
Article 91 Where an employer hires any employee whose employment contract with another employer has not been dissolved or terminated yet, if any loss is caused to the employer mentioned later, the employer first mentioned shall bear joint and several liability of compensation.
Article 92 Where a worker dispatch service provider violates this Law, it shall be ordered to make a correction by the labor administrative department and other relevant administrative departments. If the circumstance is severe, it shall be fined at the rate of not less than 1, 000 yuan but not more than 5, 000 yuan per person and have its business license revoked by the administrative department for industry and commerce. If any damage is caused to the workers dispatched, the worker dispatch service provider and the accepting entity shall bear joint and several liability of compensation.
Article 93 Where an employer without the lawful business operation qualifications commits any violation or crime, it shall be subject to legal liabilities. If the employees have already worked for the employer, the employer or its capital contributors shall, under the relevant provisions of this Law, pay the employees remunerations, economic compensations or indemnities. If any damage is caused to the employee, it shall be liable for compensation.
Article 94 Where an individual as a business operation contractor hires employees in violation of this Law and causes any damage to any employee, the contract-letting organization and the individual business operation contractor shall be jointly and severally liable for compensation.
Article 95 The labor administrative department, or any other relevant administrative department, or any of the functionaries thereof neglects its (his) duties, does not perform the statutory duties or exercises its (his) duties in violation of law, it (he) shall be liable for compensation. The directly liable person-in-charge and other directly liable persons shall be given an administrative sanction. If any crime is constituted, they shall be subject to criminal liabilities.
Chapter VIII Supplementary Provisions
Article 96 For the formation, performance, modification, dissolution or termination of employment contract between a public institution and an employee under the system of employment, if it is otherwise provided for in any law, administrative regulation or by the State Council, the latter shall be followed. If there is no such provision, the relevant provisions of this Law shall be observed.
Article 97 Employment contracts concluded 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 of this Law, the number of consecutive times 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 date on which this Law becomes effective.
If an employment contract existing on the implementation date of this Law is dissolved or terminated after the implementation of this Law and, in accordance with Article 46 of this Law, an economic compensation is payable, the number of years for which the economic compensation is payable shall be counted from the implementation date of this Law. If, under relevant effective regulations prior to the implementation of this Law, the employee is entitled to the economic compensation from the employer in respect of a period prior to the implementation of this Law, the matters shall be handled in accordance with the relevant effective regulations at that time.
Article 98 This Law shall come into force as of January 1, 2008.
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中华人民共和国劳动合同法(英文版)
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.
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