The Employment Contract Regulations of Jiangsu Province (the “Regulation”) has been amended recently and will take effect as of May 1, 2013. After the amendment, the following stipulations of the Regulation may need to be noted:

Where the employer arranges the employee to participate in pre-job trainings or studies, the employment relationship with the employee shall be established from the date of the participation in such trainings or studies;

Where the employee in probation period suffers from an illness or a non-work-related injury and needs to stop working and receive medical treatment, during the employee’s medical treatment period, the employee’s probation period shall suspend;

Where the employee continues working with the employer upon the expiration of the employment contract, the employer shall renew the employment contract within one month, otherwise the employer shall pay double salary to the employee from the next day after one month upon the expiration of the employment contract, till the execution date of the written employment contract;

Where the employer and the employee agree to extend the term of the employment contract, and the extended term exceeds 6 months, it is considered that the parties have renewed the employment contract;

Where the employee who meets the requirements for entering into a non-fixed term employment contract continues working with the employer upon the expiration of the employment contract, it is considered that the employee agrees to enter into a non-fixed term employment contract;

The compensation for non-competition shall be no less than one third of the employee’s average monthly wage over the 12 months before the employee leaves the employer;

In the circumstances that the parties reach mutual agreement, that the employee is held in custody for being suspected of committing a crime, and of act of God, the employment contract may be suspended. During the suspension period, the employment relationship shall be retained, the performance of employment contract shall be suspended, the employer may choose to stop paying remuneration to the employee and contributing premiums of social insurance for the employee, and the suspension period shall not be counted into the employee’s service period with the employer;

Where the employer who does not have its internal trade union intends to unilaterally terminate the employment contract, the employer shall inform the trade union in the area where the employer is located of the termination reason;

Where the employee suffers from an illness or a non-work-related injury and is unable to take up the original work or any other work assigned by the employer upon the conclusion of medical treatment period, the employer may terminate the employment with the employee without work capability appraisal; however, the medical allowance shall be paid only after the employee is confirmed by the work capability appraisal committee that the employee has lost all or partial of his/her work capability.

KWM Comments:

The amended Regulation has stipulated comprehensive rules on the establishment, amendment, ending and termination of the employment relationship, and will be implemented locally within Jiangsu Province. The employers located in Jiangsu Province shall review their employment management and adapt to the newest legal requirement for the purpose of compliance.