Recently, Guangdong High Court and the Labour and Personnel Disputes Arbitration Commission jointly issued the Several Opinions on the Connection between Arbitration and Litigation in respect of Labour Disputes (the "Opinions"), providing guidance on how to handle the relationship between service providers and O2O platforms (i.e. "Online to Offline platforms" to connect traditional business via online marketing), together with other common employment matters of concern. The following should be specifically noted:

  • The working relationship between service providers and O2O platforms should be construed as equal. For example, if a service provider and O2O platform enter into a business cooperation contract, by which the parties manage and share the risks and interests associated with the business, then the relationship should not be deemed to be labour relations. If a service provider and O2O platform enter into a labour contract, by which the O2O platform manages the work of the service provider and pays monthly salaries to employees of the service provider, then the relationship will be deemed to be labour relations. Where the form of an agreement differs to its actual operation, the substance of the actual operation should be analysed in order to determine whether the relationship between the service provider and O2O platform is deemed to be labour relations or non-labour relations.
  • If a major change in objective circumstances causes an employer to have serious difficulties with production and business operations which will likely lead to the suspension or restriction of production, the employer may:
  • terminate an employee's employment contract and pay them a severance package in accordance with to Article 40.3 of the Labour Contract Law of the People's Republic of China; or,
  • negotiate with employees to agree on a period of suspension. If the suspension period is less than one month, employees shall continue to be paid their normal salary. However, if the suspension period is longer than one month, the employees' salaries shall be paid in accordance with the actual workload carried out. Where the employer is unable to provide work for its employees, it will still be responsible for covering the costs of their living expenses (a minimum 80% of the local minimum wage). Such living expenses will be paid to employees until the enterprise resumes production or terminates the labour relationship with its employees.
  • It is illegal for an employer to terminate an employee's employment on the ground that the employee has violated a family planning law. Historically, any violation of family planning laws could result in an employee's employment being terminated with immediate effect. Following amendments to China's family planning laws, the labour regulations of Guangdong now expressly forbid any employer from terminating an employee's employment as a result of illegal child-birth.