Full content: http://www.molss.gov.cn/gb/zt/2007-09/29/content_198892.htm
The Labor Contract Law, which covers all workers in China, was changed on January 1, 2008 in an effort to address the rising number of labor disputes. The law requires that employment contracts must be put in writing within one month of employment commencing, and gives clear recourse to employees whose rights have been violated. It covers areas such as severance pay, probationary periods, layoffs, non-compete clauses and collective bargaining.
Compared with the Labor Law, the Labor Contract Law is more specific and operation-oriented in terms of its provisions. Employers who violate this law are subject to stringent punishment. Officials in charge of labor policies and laws and their enforcement are under greater pressure to perform their duties as specified by the Labor Contract Law. Trade unions are also allowed to play a greater role in protecting workers.
Specifically, the Labor Contract Law is intended to establish reasonable standards for labor contracts, the use of temporary workers, and severance payments. It makes mandatory the use of written contracts and strongly discourages short fixed-term contracts by requiring employers to give non-fixed contracts to workers who have already finished two fixed-term contracts for the same employer. Severance payment should be given to the worker if a fixed-term contract expires and the worker is willing to renew the contract.
A worker must sign a written individual labor contract with his or her employer, and a labor contract shall contain the clauses as follows:
(1) The employer's name, residence, legal representative or major principal;
(2) The worker's name, residence, number of identity card or number of any other valid identity certificate;
(3) The time limit for the labor contract;
(4) The work contents and place;
(5) The work time, rest and vocation;
(6) The remunerations;
(7) The social security;
(8) The labor protection, work conditions, and protection against and prevention of occupational harm;
(9) Other matters that shall be incorporated in the labor contract according to any law or regulation.
In addition, the Implementation Regulations of the PRC Labor Contract Law, which were anticipated for over a year, became effective on September 18, 2008. Overall, the Regulations are consistent with the spirit of the Labor Contract Law and resolve certain problems in its implementation. However, the Regulations have had relatively limited impact and failed to meet many expectations.
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Labor Contract Law: A few limitations |
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(1) The Regulations do not resolve the question of whether a company may unilaterally make a final decision in formulating and revising internal rules, regulations, and other material matters or if the company must jointly formulate such internal policies along with its employees. Basically, the Regulations do not clarify whether the employer can determine the matters by itself when trade unions or employee representatives disagree. It is unfortunate that the differing views and practices on this question are not addressed as this is a major point of contention. |
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(2) The Regulations do not define the terms “temporary”, “auxiliary” and “substitute” employees as described in the Employment Contract Law. The three terms are used to classify those job positions that qualify for labor dispatch. Although the Regulations intentionally omitted definitions to preserve flexibility, the omission still makes that corresponding article in the Employment Contract law difficult to implement in practice and does not provide clarity for how to handle labor dispatch.
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Resolving the above issues will most likely now be addressed by local rules promulgated in the future. Therefore, it is very important for employers to keep an eye on the local legislation (of both the place of the company’s registration and the place of performance of the employment contract). As always, the employer also then needs to continually update its internal regulations and rules in accordance with the latest national and local legislation. |
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