The labor law of China is quite comprehensive and it is not hugely different from other European countries. But still China’s employment law is exclusive in its own way and it is really important to have a proper knowledge about labor law for conducting business with this country. As an employer you need to understand the fact that China is not an employment-at-will country, and when it comes to terminate an employee who is in probation it becomes even more difficult and complex.
During the probation period, there are expanded grounds for dismissal of employees, and termination during the probation period is easier and cheaper than after its expiration. Probation period is stipulated in a labor contract with a period to complete the prescribed work or a labor contract with a fixed period of less than three months and it has been performed.
For a better understanding, we are giving you a life-like scenario. A foreign employer appointed a Chinese employee on the first of January and keeps him/her on the two months probation period ( two months is the maximum probation period in China). Within this probation period, the employee finds that the hired person is not performing well and far below to their expectations and the employer has decided to sack the employee but the termination notice is given to that employee on the first of March that is one day after the employee’s probation period ended.
The employee can go to the court against his/her former employee, raising the issue that he/she has been given termination notice after the probation period. The Chinese courts will rule that the late termination signifies that the employer cannot use “failure to meet the conditions of employment during the probation period” as a basis for unilateral termination without severance pay. It shows that even a one day can make a huge difference in China.
The notable thing is that, when an employee in China completes a probation period, the employing authority cannot dismiss him/her on the grounds of probationary rules. This is the reason, China lawyers suggest don’t try to fire any employee by reason of incapability of doing one’s job unless this reason is stipulated in your recruitment advertising. Employers should carefully document any breach of the rules and regulations and serve written notice thereof. It is also essential for the employers to check their overall HR practice regarding probation period across their organization.