Labour Law of China (in English) (Chinese law)

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So just as is the case with so much of employment law in China, it is important to look into how each locale deals with this issue. In Shanghai, you must have a Chinese version for your labor contract. Though you may have an English language translation of your contract, Chinese must be the controlling language.

China Employment Contracts and Double Wage Claims

Similarly, Jiangsu Province explicitly states in its provincial Labor Contract Regulations that in the event of a dispute involving an employment contract written in a foreign language and in Chinese, the Chinese language will prevail. What happens in legal disputes where the employment contract is in just English? The courts will sometimes have the contract translated but other times, they will simply rule that there is no valid employment contract and penalize the employer accordingly. Bottom line: We recommend inserting a provision into your labor contract making it clear that the Chinese language will control.

We make this recommendation because the Chinese language version almost certainly will be the one that applies anyway, but also because this lets everyone know exactly what will happen if there is any dispute regarding the applicable language — which disputes happen more often than you would think. For our clients, we virtually always write their employment contracts in both English and Chinese, even though the Chinese will control. The court examined two issues in the case.

First, the court ruled for the employer by deciding the agreement identifying the CNY 9 million as non-compete compensation was legal and valid. Key take-away points: To support a claim for breach of a non-competition agreement, Beijing courts may require more substantial evidence of actual competition between businesses than companies merely having similar or overlapping registered business scopes.

Therefore, companies should collect evidence of actual operational competition before bringing a claim for breach.


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In , after approval by the employee, the company issued its compensation plan for to If the employee were to leave the company during the performance period, the employee would voluntarily relinquish the bonus for the current performance period and would be ineligible for the deferred bonus for the previous performance period. This compensation plan language was similar to performance bonus language contained in a job position agreement signed between the employee and the company in The agreement was effective through 10 October On 28 April , the employee resigned.

Understanding China Employment & Labour Law | New Horizons

The company refused to pay the CNY 1. The employee filed a labor arbitration claim to recover the deferred bonus. To retain the flexibility to disqualify an employee from a performance bonus after the bonus amount has been decided but before the bonus payment has been made, the company should clearly express the bonus disqualification rules in writing and communicate those rules to employees. However, even with such language, there is no guarantee that all courts would uphold such a cancellation.

Located in Beijing, the employer developed and provided mobile software, including a cache clean-up app. They signed confidentiality and non-compete clauses as part of their employment contracts. The four employees resigned their employment to establish their own business providing the app. The employer noticed that the main business, software source code and client base of the company established by the four former employees were all remarkably similar to its own. This source code was technological information that was unknown to the public. Their illegal earnings of CNY , were also confiscated.

Key take-away points: This case shows that it is sometimes possible to pursue ex-employees for criminal liability for theft of trade secrets, though gathering sufficient evidence is still generally difficult.

Various new regulations issued on Hong Kong, Taiwan and Macao residents working in mainland China

The confidentiality obligations should explicitly extend after employment ends. In two recent cases, the Chengdu Intermediate Court ruled that employers unlawfully terminated employees for not reporting to adjusted job positions that required the employees to work from locations unreasonably distant from their original work locations.

In the first case, the employer required a sales employee originally assigned to its Qingbaijiang district store to work from its Wuhou district store while stores were being renovated. The employee refused to report to work at the Wuhou district store and continued to work from the Qingbaijiang district store.

The court held that although the employment contract allowed the employer to require the employee to work from another location, the location change must be reasonable.

Labour Contract Law of the People's Republic of China

Even with the shuttle bus provided by the employer to cover the travel between the two districts within Chengdu municipality, the three-hour increase in commute time was not a reasonable adjustment to impose on the employee. In the second case, the employee signed an employment contract to work in an office management position in Chengdu.

After the contract was signed, the employer announced an open competition among all employees for management positions. The announcement also said that if an employee was not selected for a management position, the employer would assign the employee to work in the field on new projects. The employee who had signed the employment contract for a Chengdu office management position was not selected for an office management position through the competition. The employer sent a position adjustment notice assigning the employee to work on a project in Liangshan Autonomous Prefecture, which is about km from Chengdu.

The employee not only refused to report to the new position but also did not report to work in Chengdu while negotiating with the employer about the adjustment. The employer summarily dismissed the employee for the unauthorized absence from work. Finally, as the employee had continued negotiating with the employer while not reporting for work, the court ruled that the absence from work could not be deemed as an unauthorized absence.

Based on these arguments, the court ruled that the employee was unlawfully terminated.

According to the Chengdu cases, an increase in commute time by a few hours may be deemed unreasonable even if the new location is still within the same city and the employer assists the employee with transportation, e. The employee was a manager at a property management company servicing a large shopping mall.

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Some tenants felt the birthday invitations were a method to solicit bribes because the tenants had no personal relationship with employee. These tenants jointly reported the employee to the company. The recommendation for unilateral termination was discussed and passed in an employee representative meeting. The company also notified the company union.

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List of Chinese Laws

After these steps, the company unilaterally terminated the employee. The company union later agreed to the termination in writing. The employee sued the company for wrongful termination and claimed severance pay. The employee argued that invitations were sent but no bribes were received; therefore, the behaviour should not have been regarded as soliciting bribes.

According to this argument, since the employee had not solicited bribes, there was no serious violation of company policy. As such, the company did not have valid grounds to terminate. Still, as a best practice, unilateral termination policies should list as many specific termination grounds as possible. Sign in Join. Sign in.

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