FTC regulated: Yes

Valid reasons for FTC use: no limitation

Remarks

Art. 13 ECL: no material reasons required.
The ECL only provides for procedural requirements: a FTC contract can be concluded once the employer and the worker have reached a consensus through consultations. In addition, according to art. 14 ECL, "if an Employer fails to conclude a written labor contract with an employee within one (1) year from the date the employee commences work, they shall be deemed to have entered into an open-ended labor contract".

Maximum number of successive FTCs: 2

Remarks

Art. 14(3) ECL :" (..) An open-ended labor contract may be concluded between an Employer and an employee upon consultation. If an employee proposes or agrees to renew and conclude a labor contract in any of the following circumstances, an open-ended labor contract shall be concluded, unless the employee requests the conclusion of a fixed-term labor contract instead:
(3) Where a labor contract was concluded as a fixed-term labor contract on two consecutive occasions and the employee, in the absence of any of the circumstances stipulated in Article 39 and items (1) and (2) of Article 40 of this law, renews such contract."

Maximum cumulative duration of successive FTCs: 120months

Remarks

Art. 14(1) ECL:
"(..) An open-ended labor contract may be concluded between an Employer and an employee upon consultation. If an employee proposes or agrees to renew and conclude a labor contract in any of the following circumstances, an open-ended labor contract shall be concluded, unless the employee requests the conclusion of a fixed-term labor contract instead:
(1) The employee has been working for the Employer for ten (10) consecutive years".

Maximum probationary (trial) period (in months): 6 months

Remarks

Art. 19 ECL.
The maximum duration of the probationary period varies according to the the duration of the employment contract, as follows:
- term ranging from 3 months to less than 1 year: maximum one month;
- term ranging from more than 1 year to less than 3 years: maximum two months;
- more than three years and open-ended contracts: maximum 6 months.
No probation period shall be specified in an employment contract concluded for the completion of specific task or an employment contract concluded for less than three months.

Obligation to provide reasons to the employee No

Remarks

The ECL does not establish any obligation on the part of the employer to state the reasons for dismissal to the employee. However, prior to dismissing a worker, the employer shall notify the labour union of the reasons: art. 43 ECL.

Valid grounds (justified dismissal): worker's conduct, worker's capacity, economic reasons

Remarks

Art. 40 ECL (ordinary dismissal): list of reasons related to the worker's conduct, worker's capacity, economic reasons.
See also Art. 39 ECL (summary dismissal).

See also Art. 18 and 19 of Implementing Regulations of the PRC Employment Contracts Law.

Prohibited grounds: marital status, pregnancy, maternity leave, temporary work injury or illness, race, sex, religion, social origin, nationality/national origin, age, trade union membership and activities, disability, ethnic origin

Remarks

- Art. 42 ECL prohibits dismissal of :
(1) a worker who is engaged in operations exposing him to occupational disease hazards and has not undergone a pre-departure occupational health check-up, or is suspected of having contracted an occupational disease and is being diagnosed or under medical observation;
(2) a worker who has been confirmed as having lost or partially lost his capacity to work due to an occupational disease contracted or a work-related injury sustained with the Employer (3) a worker who has contracted an illness or sustained an injury, and the set period of medical care therefore has not expired;
(4) a female employee in her pregnancy, confinement or nursing period;
(5) a worker who has been working for the Employer continuously for not less than 15 years and is less than 5 years away from his legal retirement age;
(6) a worker who finds himself in other circumstances stipulated in laws or administrative statutes.
See also art. 26 of the Law of the People¿s Republic of China on the Protection of Rights and Interests of Women which prohibits the dismissal of any female employee on the grounds of marriage, pregnancy, maternity leave or nursing unless the employee requests the termination. Dismissal on the ground of pregnancy is also prohibited in the art. 4 of the Regulations Concerning the Labor Protection of Female Staff and Workers (1988).
- Dismissal based on trade union activities is prohibited: art. 52 (1) of the Trade Union Law of the People's Republic of China, 1992 as amended by Order of the President of the People's Republic of China, No 62, 27 October 2001 and last amended on 27 August, 2009.

- Ethnic origin, race, sex, and religious belief and disability are not listed as unlawful grounds for dismissal in the ECL. However, they are listed as prohibited grounds of discrimination in employment in article 3 of the Employment Promotion Law [EPL]
(see also art. 12 of the Labour Law; art. 27 EPL on gender equality; art. 29 EPL and 38 of the PRC Law on the protection of disabled persons, 1990 as last amended on 24 April, 2008).
- Art. 31 EPL: Rural workers who move to urban areas to seek employment shall enjoy equal labour rights to urban workers and shall not be subjected to discriminatory restrictions.

Workers enjoying special protection: workers' representatives, pregnant women and/or women on maternity leave, confirmed injured workers, older workers/workers on the verge of retirement, workers on temporary leave following an occupational disease or a work injury

Remarks

Under art. 42 ECL, it is prohibited to dismiss:
(1) a worker who is engaged in operations exposing him to occupational disease hazards and has not undergone a pre-departure occupational health check-up, or is suspected of having contracted an occupational disease and is being diagnosed or under medical observation;
(2) a worker who has been confirmed as having lost or partially lost his capacity to work due to an occupational disease contracted or a work-related injury sustained with the Employer
(3) a worker who has contracted an illness or sustained an injury, and the set period of medical care therefore has not expired;
(4) a female employee in her pregnancy, confinement or nursing period;
(5) a worker who has been working for the Employer continuously for not less than 15 years and is less than 5 years away from his legal retirement age.

For worker's representatives, see art. 52 (2) of the Trade Union Law :
If the labour contract of a worker or staff member is terminated due to his participation in trade union activities, the administrative department for labour shall order that the victim be reinstated, his remuneration payable during the period of the termination of the labour contract be made up, or that a compensation two times the amount of his annual income be given.

Notification to the worker to be dismissed: written

Remarks

Art. 40 ECL.

Notice period:

Remarks

Art. 40 ECL: The notice period shall be 30 days regardless of the job tenure.

tenure ≥ 6 months:

  • All: 1 months.

tenure ≥ 9 months:

  • All: 1 months.

tenure ≥ 2 years:

  • All: 1 months.

tenure ≥ 4 years:

  • All: 1 months.

tenure ≥ 5 years:

  • All: 1 months.

tenure ≥ 10 years:

  • All: 1 months.

tenure ≥ 20 years:

  • All: 1 months.

Pay in lieu of notice: Yes

Remarks

Art. 40 ECL.

Notification to the public administration: No

Notification to workers' representatives: Yes

Remarks

Art. 43 ECL.

Approval by public administration or judicial bodies: No

Approval by workers' representatives: No

Remarks

However, according to art. 43 ECL, if the employer has violated the laws, administrative regulations, or provisions of the employment contract, the trade union has the right to demand that the employer rectifies the matter. The employer shall consider the trade union's opinion and notify it in writing on how it handled the matter.

Definition of collective dismissal (number of employees concerned): More than 20 employees or less than 20, accounting for at least 10% of the total number of employees.

Remarks

Art. 41 ECL.

Prior consultations with trade unions (workers' representatives): Yes

Remarks

Art. 41 ECL (30 days in advance).

Notification to the public administration: Yes

Remarks

Art. 41 ECL.

Notification to workers' representatives: Yes

Remarks

Art. 41 ECL (30 days in advance).

Approval by public administration or judicial bodies: No

Approval by workers' representatives: No

Priority rules for collective dismissals (social considerations, age, job tenure): Yes

Remarks

Art. 41 ECL.

Employer's obligation to consider alternatives to dismissal (transfers, retraining...): Yes

Remarks

Art. 41 ECL.

Priority rules for re-employment: Yes

Remarks

Art. 41 ECL: preferential right to re-employment for 6 months.

Severance pay:

Remarks

See art. 46 and 47 ECL:
Severance pay amounts to one month's pay per year of service. For the purpose of calculating severance pay, an employment period ranging from 6 months to 1 year is to be counted as one year. If the employee has worked for less than 6 months, he will be entitled to half a month's pay.

If the monthly wage of a worker exceeds three times the average monthly wages of employees in the municipality where the employer is located, severance pay shall be paid to him at the rate of three times the local average monthly wages and and shall be for not more than 12 years of work.

See also Art. 27 of Implementing Regulations of the PRC Employment Contracts Law.

tenure ≥ 6 months: 1 months

tenure ≥ 9 months: 1 months

tenure ≥ 1 year: 1 months

tenure ≥ 4 years: 4 months

tenure ≥ 5 years: 5 months

tenure ≥ 10 years: 10 months

tenure ≥ 20 years: 20 months

Redundancy payment:

Remarks

Same as severance pay: see art. 46 (4) ECL read together with art. 47 ECL.

tenure ≥ 6 months: 1 months

tenure ≥ 9 months: 1 months

tenure ≥ 1 year: 1 months

tenure ≥ 2 years: 2 months

tenure ≥ 4 years: 4 months

tenure ≥ 5 years: 5 months

tenure ≥ 10 years: 10 months

tenure ≥ 20 years: 20 months

Compensation for unfair dismissal - free determination by court: No

Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method): Twice the rate of the severance pay

Remarks

Art. 48 ECL

Reinstatement available: Yes

Remarks

Art. 48 ECL.

Preliminary mandatory conciliation: No

Remarks

See art. 79 LL and art. 5 Labour Dispute Mediation and Arbitration Law (2007, entered into force in May 2008)
Art. 79 LL does not provide for preliminary mandatory conciliation, but only gives the parties the option to turn to a mediation and/or arbitration committee before going to Court.
The new Labour Dispute Mediation and Arbitration Law regulates labour disputes settlement. (See text: http://www.lawinfochina.com/display.aspx?id=6584&lib=law)

See secondary sources:
http://www.dwt.com/LearningCenter/Advisories?find=22301

Competent court(s) / tribunal(s): ordinary courts

Remarks

Arbitration is mandatory in the event of an individual labour dispute.
The parties can only go to court, if they do not agree with the arbitration outcome, within 15 days from the date the award is communicated. See art. 5 and 50 of the Labor Dispute Mediation and Arbitration Law.

Existing arbitration: Yes

Remarks

Arbitration is mandatory in the event of an individual labour disputes. Art. 79 LL, see also art. 5 and 50 of the Labour Dispute Mediation and Arbitration Law (2007, entered into force in May 2008).