Why Employers Need to Think Profoundly Before Amending China Employee Contract

Once a company has signed an employment contract in China, it becomes really difficult to back out or even make any sort of alteration in it. Inserting changes especially in the terms such as the employee’s wages and position is apparently impossible. Making an attempt to alter the employment contract may result in-

  • Arbitration case
  • Prolong legal hassle
  • Financial loss
  • Negative reputation

Until a few years ago China did not have private companies or hardly any international lawyer firm. Over the last couple of years, this country has brought in different types of labor laws that foreign companies find difficult to comprehend and understand. It is really important to have some sort of idea about China labor law.

According to the labor law of China, there should be a written contract between the employer and the full-time employee. The mandatory provisions in the employment contract are-

  • Basic information about the employer and the employee
  • The explicit term/duration of the employment contract
  • A description of the work the employee will be performing
  • The place of work
  • The working hours
  • Rest and leave time
  • Wages
  • Social insurance
  • Applicable labor protections and labor conditions and protection against occupational hazards

The Chinese political system is quite authoritarian and mostly favors the employees. The laws are drafted to safeguard the interest of the employees. According to the China lawyer, there are only limited grounds by which an employer can terminate an employment contract and there is no general right to terminate simply by giving notice or payment in lieu of notice. A specific ground prescribed by law must apply. Comparing to the United States of America, the job descriptions in China must be drafted very carefully Being as specific as possible in the labor contract about your expectations is imperative to establishing good working relationships with your Chinese employees.

According to the Chinese law, an employer may in some circumstances amend an employment contract, but amendment of significant issues such as an employee’s salary or work position should be done through mutual consultation. The law also states that under ordinary circumstances an employee must give 30 days’ written notice for unilateral termination.

To sum up, it is really critical for the foreign employers to think profoundly before taking any sort of unilateral action involving your employees in China.

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