Key Elements to put in your China Employment Contract

An employment contract is generally a signed written legal agreement that lays out binding terms and conditions of an employment relationship between an employee and an employer. It establishes both the rights and responsibilities of the two parties. The labor law of the People’s Republic of China (PRC), which has been in effect since 1995, and the newest edition of the labor contract law, in effect since 2012, are now also regulating employment relationships in China.

As more and more companies are considering entering into the Chinese market, employment law becomes more relevant internationally. Companies, both domestic and international companies operating in China need to strictly maintain employment law. There are so many key provisions China lawyers suggest companies to keep in their employment contract.

Go for a written employment contract- The employment contracts can come in two versions, one is verbal and another one is written. China lawyers always suggest their clients to use a written employment contract because it is far more effective than a verbal one.

Make China-centric employment contract- Foreign companies could get an added advantage by making their employment contract China-centric. Often, global companies want all of their employment contracts worldwide to be similar. But they need to know that China is a different country to deal with and the more a China-centric employment contract will be the more preference you will get from the court.

Infuse employee rules and regulations manual- It is mandatory in China to have an employee rules and regulations manual in the employment contract. In the event of terminating an employee, this will help you to get the upper-hand in the court.

Lock in your ID- Through your China employment law, you could easily address several things such as IP ownership, trade secrets and competition by your employees.

Keep the section of probationary period- It is good to clearly mention the probationary period in your China employment contract. This will make it easier to terminate an employee if you are not satisfied with him/her performance. There is no fear of facing a legal dispute from your fired employee’s side.

A comprehensive contract of employment allows an employer to specify an employee’s duties and responsibilities – so an employee knows exactly what is expected of them.

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