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1、LAW OF THE PEOPLES REPUBLIC OF CHINA ON EMPLOYMENT CONTRACTSAdopted at the 28th Session of the Standing Committee of the 10th National Peoples Congresson June 29,2007Effective from January 1,2008By Baker&MCKenzieCHAPTER 1 GENERAL PROVISIONSArticle 1This Law has been formulated in order to improve th
2、e employment contract system,to specifythe rights and obligations of the parties to employment contracts,to protect the lawful rightsand interests of Employees and to build and develop harmonious and stable employmentrelationships.Article 2This Law governs the establishment of employment relationshi
3、ps between,and the conclusion,performance,amendment,termination and ending of employment contracts by,organizations suchas enterprises,individual economic organizations and private non-enterprise units in thePeoples Republic of China(“Employers”)on the one hand and Employees in the PeoplesRepublic o
4、f China on the other hand.The conclusion,performance,amendment,termination and ending of employment contracts by stateauthorities,institutions or social organizations on the one hand and Employees with whom theyestablish employment relationships on the other hand,shall be handled pursuant to this La
5、w.Article 3The conclusion of employment contracts shall comply with the principles of lawfulness,fairness,equality,free will,negotiated consensus and good faith.A lawfully concluded employment contract is binding,and both the Employer and the Employeeshall perform their respective obligations stipul
6、ated therein.Article 4Employers shall establish and improve internal rules and regulations,so as to ensure thatEmployees enjoy their labor rights and perform their labor obligations.When an Employer formulates,revises or decides on rules and regulations,or material matters,that have a direct bearing
7、 on the immediate interests of its Employees,such as those concerningcompensation,work hours,rest,leave,work safety and hygiene,insurance,benefits,employeetraining,work discipline or work quota management,the same shall be discussed by the employeerepresentative congress or all the employees.The emp
8、loyee representative congress or all theemployees,as the case may be,shall put forward a proposal and comments,whereupon the mattershall be determined through consultations with the Trade union or employee representativesconducted on a basis of equality.If,during the implementation of an Employers r
9、ule or regulation or decision on a crucialmatter,the Trade union or an employee is of the opinion that the same is inappropriate,itor he is entitled to communicate such opinion to the Employer,and the rule,regulation ordecision shall be improved by making amendments after consultations.Rules and reg
10、ulations,and decisions on material matters,that have a direct bearing on theimmediate interests of Employees shall be made public or be communicated to the Employees bythe Employer.Article 5The labor administration authorities of Peoples Governments at the county level and above,together with the Tr
11、ade union and enterprise representatives,shall establish a comprehensivetri-partite mechanism for the coordination of employment relationships,in order to jointlystudy and resolve major issues concerning employment relationships.Article 6A Trade union shall assist and guide Employees in the conclusi
12、on of employment contracts withtheir Employer and the performance thereof in accordance with the law,and establish a collectivebargaining mechanism with the Employer in order to safeguard the lawful rights and interestsof Employees.CHAPTER 2 CONCLUSION OF EMPLOYMENT CONTRACTSArticle 7An Employers em
13、ployment relationship with a Employee is established on the date it startsusing the Employee.An Employer shall keep a register of employees,for reference purposes.Article 8When an Employer hires a Employee,it shall truthfully inform him as to the content of the work,the working conditions,the place
14、of work,occupational hazards,production safety conditions,labor compensation and other matters which the Employee requests to be informed about.TheEmployer has the right to learn from the Employee basic information which directly relates tothe employment contract,and the Employee shall truthfully pr
15、ovide the same.Article 9When hiring a Employee,an Employer may not ret ain the Employees resident ID card or otherpapers,nor may it require him to provide security or collect property from him under some otherguise.Article 10To establish an employment relationship,a written employment contract shall
16、 be concluded.In the event that no written employment contract was concluded at the time of establishmentof an employment relationship,a written employment contract shall be concluded within one monthafter the date on which the Employer starts using the Employee.Where an Employer and a Employee conc
17、lude an employment contract before the Employer startsusing the Employee,the employment relationship shall be established on the date on which theEmployer starts using the Employee.Article 11In the event that an Employer fails to conclude a written employment contract with a Employeeat the time its
18、starts to use him,and it is not clear what labor compensation was agreed uponwith the Employee,the labor compensation of the new Employee shall be decided pursuant to therate specified in the collective contract;where there is no collective contract or thecollective contract is silent on the matter,
19、equal pay shall be given for equal work.Article 12Employment contracts are divided into fixed-term employment contracts,open-ended employmentcontracts and employment contracts to expire upon completion of a certain job.Article 13A“fixed-term employment contract”is an employment contract whose ending
20、 date is agreed uponby the Employer and the Employee.An Employer and a Employee may conclude a fixed-term employment contract upon reaching anegotiated consensus.Article 14An“open-ended employment contract”is an employment contract for which the Employer and theEmployee have agreed not to stipulate
21、a definite ending date.An Employer and a Employee may conclude an open-ended employment contract upon reaching anegotiated consensus.If a Employee proposes or agrees to renew his employment contract or toconclude an employment contract in any of the following circumstances,an open-ended employmentco
22、ntract shall be concluded,unless the Employee requests the conclusion of a fixed-termemployment contract:(1)The Employee has been working for the Employer for a consecutive period of not less than10 years;(2)when hisEmployer introduces the employmentcontract system or the state owned enterprisethat
23、employs him re-concludes its employment contracts as a result of restructuring,theEmployee has been working for the Employer for a consecutive period of not less than 10 yearsand is less than 10 years away from his legal retirement age;or(3)prior to the renewal,a fixed-term employment contract was c
24、oncluded on two consecutiveoccasions and the Employee is not characterized by any of the circumstances set forth in Article39 and items(1)and(2)of Article 40 hereof.If an Employer fails to conclude a written employment contract with a Employee within one yearfrom the date on which it starts using th
25、e Employee,the Employer and the Employee shall bedeemed to have concluded an open-ended employment contract.Article 15An“employment contract with a term to expire upon completion of a certain job”is an employmentcontract in which the Employer and the Employee have agreed that the completion of a cer
26、tainjob is the term of the contract.An Employer and a Employee may,upon reaching a negotiated consensus,conclude an employmentcontract with a term to expire upon completion of a certain job.Article 16An employment contract shall becomeeffective when the Employer and the Employee have reacheda negoti
27、ated consensus thereon and each of them has signed or sealed the text of such contract.The Employer and the Employee shall each hold one copy of the employment contract.Article 17An employment contract shall specify the following matters:(1)The name,domicile and legal representative or main person i
28、n charge of the Employer;(2)The name,domicile and number of the resident ID card or other valid identity document ofthe Employee;(3)The term of the employment contract;(4)The job des cription and the place of work;(5)Working hours,rest and leave;(6)Labor compensation;(7)Social insurance;(8)Labor pro
29、tection,working conditions and protection against occupational hazards;and(9)Other matters which laws and statutes require to be included in employment contracts.In addition to the requisite terms mentioned above,an Employer and a Employee may agree tostipulate other matters in the employment contra
30、ct,such as probation period,training,confidentiality,supplementary insurance and benefits,etc.Article 18If a dispute arises due to the fact that the rate or standards for labor compensation or workingconditions,etc.are not explicitly specified in the employment contract,the Employer and theEmployee
31、may renegotiate.If the negotiations are unsuccessful,the provisions of the collectivecontract shall apply.If there is no collective contract or the collective contract is silenton the issue of labor compensation,equal pay shall be given for equal work;if there is nocollective contract or the collect
32、ive contract is silent on the issue of working conditions,the relevant regulations of the state shall apply.Article 19If an employment contract has a term of not less than three months but less than one year,theprobation period may not exceed one month;if an employment contract has a term of more th
33、anone year and less than three years,the probation period may not exceed two months;and if anemployment contract has a term of not less than three years or is open-ended,the probationperiod may not exceed six months.An Employer may stipulate only one probation period with any given Employee.No proba
34、tion period may be specified in an employment contract with a term to expire uponcompletion of a certain job or an employment contract with a term of less than three months.The probation period shall be included in the term of the employment contract.If an employmentcontract provides for a probation
35、 period only,then there is no probation period and the termconcerned shall be the term of the employment contract.Article 20The wages of a Employee on probation may not be less than the lowest wage level for the samejob with the Employer or less than 80 percent of the wage agreed upon in the employm
36、ent contract,and may not be less than the minimum wage rate in the place where the Employer is located.Article 21An Employer may not terminate an employment contract during the probation period unless theEmployee is characterized by any of the circumstances set forth in Article 39 and items(1)and(2)
37、of Article 40 hereof.If an Employer terminates an employment contract during theprobation period,it shall explain the reasons to the Employee.Article 22If an Employer providesspecial funding for a Employees training and gives him professionaltechnical training,it may conclude an agreement specifying
38、 a term of service with such Employee.If the Employee breaches the agreement on the term of service,he shall pay liquidated damagesto the Employer as agreed.The measure of the liquidated damages may not exceed the trainingexpenses paid bythe Employer.The liquidated damages that the Employer requires
39、 the Employeeto pay may not exceed the portion of the training expenses allocable to the unperformed portionof the term of service.The reaching of agreement on a term of service between the Employer and the Employee does notaffect the raising ofthe Employees labor compensation duringthe term of serv
40、ice accordingto the normal wage adjustment mechanism.Article 23AnEmployerandaEmployeemayincludeintheiremploymentcontractprovisionsonconfidentiality matters relating to maintaining the confidentiality of the trade secrets ofthe Employer and to intellectual property.If a Employee has a confidentiality
41、 obligation,the Employer may agree with the Employee oncompetition restriction provisions in the employment contract or confidentiality agreement,and stipulate that the Employer shall pay financial compensation to the Employee on a monthlybasis during the term of the competition restriction after th
42、e termination or ending of theemployment contract.If the Employee breaches the competition restriction provisions,he shallpay liquidated damages to the Employer as stipulated.Article 24The personnel subject to competition restrictions shall be limited to the Employers seniormanagement,senior technic
43、ians and other personnel with a confidentiality obligation.The scope,territory and term of the competition restrictions shall be agreed upon by the Employer andthe Employee,and such agreement shall not violate laws and regulations.The term,counted from the termination or ending of the employment con
44、tract,for which a personas mentioned in the preceding paragraph is subject to competition restrictions in terms of hisworking for a competing Employer that produces the same type of products or is engaged in thesame type of business as his current Employer,or in terms of his establishing his own bus
45、inessto produce the same type of products or engage in the same type of business,shall not exceedtwo years.Article 25With the exception of the circumstances specified in Articles 22 and 23 hereof,an Employermay not stipulate with a Employee provisions on the bearing of liquidated damages by theEmplo
46、yee.Article 26An employment contract shall be invalid or partially invalid if:(1)A party uses such means as deception or coercion,or takes advantage of the other partysdifficulties,to cause the other party to conclude an employment contract,or to make anamendment thereto,that is contrary to that par
47、tys true intent;(2)The Employer disclaims its legal liability or denies the Employee his rights;or(3)Mandatory provisions of laws or administrative statutes are violated.If the invalidity or partial invalidity of the employment contract is disputed,it shall beconfirmed by a labor dispute arbitration
48、 institution or a Peoples Court.Article 27If certain provisions of an employment contract are invalid and such invalidity does not affectthe validity of the remaining provisions,the remaining provisions shall remain valid.Article 28If an employment contract is confirmed as invalid and the Employee h
49、as already performed labor,the Employer shall pay the Employee labor compensation.The amount of labor compensation shallbe determined with reference to the labor compensation of Employees in the same or a similarposition with the Employer.CHAPTER 3 PERFORMANCE AND AMENDMENT OF EMPLOYMENT CONTRACTSAr
50、ticle 29The Employer andthe Employee shalleach fully perform its/his obligations in accordance withthe employment contract.Article 30Employers shall pay their Employees labor compensation on time and in full in accordance withthe employment contracts and state regulations.If an Employer falls into a