Notable Changes in the Beijing Employment Law

Beijing is the political headquarter and the cultural center of China. In terms of trade, finance, industry and politics, this city has immense importance in the entire world. The employment law of Beijing is different from the other Chinese cities. You need to give special importance to this state and no wonder the employment related laws and regulations of this region should not be crafted in the same line as with other regions of China.

Employment Law of Beijing-

The area of practice known as employment law covers the rights, obligations, and responsibilities within the employer-employee relationship-from wages and workplace safety to discrimination and wrongful termination. These rules are primarily designed to keep workers safe and make sure they are treated fairly, although laws are in place to protect employers’ interests as well.

The employment law of Beijing is based on federal and state constitutions, legislation, administrative rules, and court opinions. A particular employment relationship may also be governed by contract. The headquarters of most multinational companies are situated here and it is the business hub of the China, foreign companies should have an ample amount of knowledge on the rules and regulations regarding Beijing’s labor law.

Chinese government has taken few initiatives and made few positive changes in the labor and employment law of this city in order to make it more employer-friendly. Shanghai is considered to be the most employer-friendly city in China and current initiatives have been taken to make Beijing at per with Shanghai in terms of employer’s satisfaction. Below is a rundown of some of the positive changes in Beijing employment:

  • Article 13 of the Responses, which provides that an employer may terminate an employee who seriously violates labor disciplines or professional ethics, even if the employer’s rules and regulations and employment contracts are silent on the specific employee misconduct.
  • The Responses refer to paragraph 2 of Article 3 of the PRC Labor Law which mandates employees shall comply with labor disciplines and professional ethics. The Responses state that an employee’s serious violation of this requirement will allow the employer to terminate that employee based on paragraph 2 of Article 3 of the PRC Labor Law.

Foreign talent in Beijing will receive more social security, including better incentive mechanisms, mutual recognition of international professional qualifications and better social insurance standards. Despite all these changes, foreign employees must take extreme caution while terminating their Chinese employee.

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The Provisions that you Must Skip in your China Employment Contract

China lawyers always suggest U.S. and European business owners to sign out a China-centric contract while doing business in the mainland China or with China. This approach is highly important especially in case of the employment contracts with the Chinese employees because the entire agreement is highly local in nature.

There are two things that foreign business owners must have if they have someone in China other than a company performing services for them-

  • Foreign company’s own entity in China
  • A China-specific written employment contract

It has been noted by the professional China lawyers that even translating the entire existing employment agreement into Chinese couldn’t manage to reduce the risk. The executives of the American and Australian companies have been seen asking for assistance from the China lawyers regarding the employment agreement that is translated into Chinese.

We’ve set out to put together a solid list of examples that will clarify the differences in employment law in China with the foreign countries (especially U.S.)

In the United States and other countries, employees are hired on an at-will basis that signifies that the employee can be sacked either for good reason or for bad reason or for no reason at all. But it will not work in China. Putting this type of provision in your employment contract in China will be treated as a wrongful termination claim. China lawyer firms suggest their clients not to put this sort of provision in their employment contract.

The provision of making your employee to work whenever required to complete the job is not entirely invalid if certain conditions have been properly met. But the major issue is that, if you are sued by your Chinese employee(s), this provision may go against you in the court. So diligently skip this provision.

There is a misconception among the American companies that making a provision in a contract with a China employee that United States law will apply and all disputes must be resolved in the U.S. territory is a safe approach. This notion is totally wrong and the success of this provision in a contract is almost zero.

In China, if foreign companies wish one of their employees to be bound by a non-compete provision, they must pay them consideration for their not competing during the entire term of the post-termination non-compete period. A non-compete that comes into force after termination of employment and the consideration for this non-compete is the promise of employment works in the USA but not in China.

By removing the above-mentioned provisions from your China employment contract will help you to gain strong position in case you are sued by your employees. The judges will not doubt about your intention and will offer you upper-hand during the entire legal battle.

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