Employment Law in the People’s Republic of China

The People’s Republic of China (PRC) consists of 31 top-level administrative units (excluding the Special Administration Regions of Hong Kong and Macao, which have their own legal systems), made up of 22 provinces (excluding Taiwan, which is claimed by the PRC), five autonomous regions and four cities directly controlled by the central government (Beijing, Chongqing, Shanghai and Tianjin). Responsibility for employment law matters is shared between the national level and the individual provinces, regions and cities.

At national level, the main general items of legislation on employment rights and protections are the Labour Law and the Labour Contract Law. National statutes on specific issues include the Trade Union Law, Employment Promotion Law, Law on the Protection of Women’s Rights and Interests, Law on the Protection of People with Disabilities, Law on Prevention and Control of Occupational Diseases and Company Law. A range of Regulations, Provisions and Decisions issued by the Ministry of Human Resources and Social Security (MOHRSS) and other state agencies deal in detail with matters regulated by these various laws.

Rules adopted by the public authorities at the level of individual provinces, regions and cities play an important role in some fields of employment law, including minimum wages, social security, maternity leave, paternity leave, sick leave, bereavement leave, marriage leave, working time and industrial relations. The main focus of this article is on national regulation, though we indicate areas where lower-level regulation is important and give examples of such rules.

Employment law is interpreted by the civil courts. Under the PRC’s judicial system, courts’ judgments do not set binding precedents. However, despite the absence of case law as such, judicial interpretations issued by the Supreme People’s Court provide definitive guidance on how employment legislation should be applied.

Other sources of employment law include collective agreements and individual employment contracts.

This article refers only to employment in the private sector.

• During recruitment and selection, employers are entitled to obtain basic information about candidates that is directly related to the employment contract, and candidates must truthfully provide such information. Recruitment and Selection

• Indefinite-term contracts may provide for a probationary period of up to six months, while fixed-term contracts lasting three months or more may provide for a probationary period of one to six months, depending on their duration. Recruitment and Selection

• In order to be employed in China, foreign nationals require work permits, which are generally granted only to individuals who have specific skills and where there is no qualified local candidate for the position concerned. Recruitment and Selection

• An employment contract is defined by statute as an agreement reached between an employee and an employer on the establishment of the employment relationship and the definition of the parties’ rights, interests and obligations. Employment Contracts

• Employment contracts may be indefinite, have a fixed term or expire when a specified task is completed; in certain circumstances, when offering to enter into or renew an employment contract the employer must offer the employee an indefinite-term contract, unless the employee requests otherwise. Employment Contracts

• Employment contracts must generally be in writing and contain a range of terms and information required by statute. Employment Contracts

• Employees must generally be paid monthly, usually in cash or by bank transfer, and provided with an itemised payslip, while there is a general prohibition on employers making deductions from employees’ wages (with specified exceptions). Pay and Benefits

• Statutory minimum wage rates are set at the level of individual provinces, autonomous regions and cities, rather than nationally. Pay and Benefits

• Employees’ normal working hours must not, on average, exceed eight hours per day and 40 hours per week, and they must not generally work more than 36 hours of overtime per month (overtime attracts a statutory pay supplement of 50% to 200%.) If particular requirements make it impossible to observe these rules, more flexible working time arrangements are available for certain categories of employee and business. Working Time, Rest and Holidays

• Employees must be granted a weekly rest day and are entitled to five days’ paid annual leave after one year’s employment, rising to 10 days after 10 years’ employment and 15 days after 20 years’ employment. Working Time, Rest and Holidays

• Various special rules apply to part-time employees (those working no more than four hours per day on average and no more than 24 hours per week) in areas such as employment contracts, termination and pay. Working Time, Rest and Holidays

• All pregnant employees are entitled to 14 weeks of maternity leave, during which they receive a social insurance benefit, while individual provinces, regions and cities provide for a longer leave entitlement in certain circumstances. Parenthood and Work-life Balance

• Rules at the level of individual provinces, regions and cities provide entitlements to paternity leave, bereavement leave and marriage leave. Parenthood and Work-life Balance

• Discrimination in relation to employment is prohibited on grounds including sex, race, nationality/ethnic community or group, disability or religious belief. Women and men are entitled to equal pay for equal work. Equality and Non-discrimination

• Sexual harassment and disability harassment are prohibited. Equality and Non-discrimination

• Trade unions have a wide range of entitlements and tasks at enterprise level, including being consulted over various issues and negotiating collective agreements. Employees do not have a statutory right to strike though strikes are not explicitly prohibited. Industrial Relations and Collective Rights

• Employees have a right to participate in “democratic management” at the workplace, through an elected employee representative congress or, in smaller enterprises, an assembly of all employees. Industrial Relations and Collective Rights

• Employers have various general health and safety duties towards their employees and must comply with numerous detailed statutory requirements in this field. Occupational Health and Safety

• Generally, an employer may dismiss an employee only for certain reasons specified by statute, some of which justify dismissal with notice and others (essentially misconduct-related) justify summary dismissal. Various special rules apply to collective redundancy. Termination of Employment

• Where the employer is permitted to dismiss an employee with notice, it must give at least 30 days’ notice, or make a payment in lieu, while employees may resign at any time by giving at least 30 days’ notice, or at least three days’ notice during a probationary period. Termination of Employment

• The employer must generally pay an employee statutory compensation of one month’s pay per year of service if it dismisses them with notice, and when employment terminates in certain other circumstances. Termination of Employment

• When there is a business transfer, employees’ employment contracts are not automatically transferred to the new employer. Other Key Issues

• Employees have a statutory right to receive vocational skills training, and employers are obliged to establish a vocational training system and provide employees with training. Other Key Issues