The revised Shandong Provincial Employment Contract Regulations came into force on October 1st, 2013. The key provisions are:

Disclosure Obligations of Employee: Employers are entitled to be informed of the physical condition, work experience, knowledge & skills, etc, as limited by the scope of the employment contract. Employee shall disclose his non-compete obligation if any.

Establishment of Employment Relationship: An Employment relationship is deemed established as of the first day the employee actually starts working. Where an employee attends pre-employment training or education, an employment relationship is deemed established as of the earliest date of such attendance.

Identification of Employment Contract Renewal: Where a fixed-term employment contract is concluded within 3 months of the rescission or termination of a previous fixed-term employment contract, two consecutive fixed term employment contracts will be deemed to have been concluded. In addition, an extension at the expiration of an employment contract following consultation between employer and employee shall be deemed renewal of the employment contract.

Dispatched Employees: If the employment contracts of dispatched employees are terminated or rescinded due to closure, bankruptcy or other reasons of the labor dispatched institutions, and the receiving entities continue having the dispatched employees work for them, then the receiving entities should enter into employment contracts with the dispatch employees.

Double Wages: Employers should pay employees double wages each month if the employees’ employment contracts expire and the employees provide consecutive labor as arranged by the employers and the employers fail to conclude a written employment contract within a period of 1 month to 1 year from expiration.

Suspension of Employment Contracts: An employment contract can be suspended if employers and employees reached written agreements, and employment contracts cannot be performed due to detention caused by criminal activity of the employee, or force majeure. During the period of suspension, employment relationships are retained, but the performance of employment contract is suspended. Further, the employers need not pay salaries or social security contributions. In addition, the suspension period will not be counted into the employee’s years of service with the employer.

KWM comments: According to the Regulations, employees should disclose if they are under a non-compete obligation. Compared with local regulations of other provinces, this rule is relatively novel. In addition, the Regulation introduces stricter rules on the renewal of employment contracts. For instance, concluding a fixed-term employment contract during the three months after the employment contracts ends will be considered as consecutively concluding two employment contracts. Agreeing to extend the term of an existing employment contract after expiry will also be considered as renewal of an employment contract. Employers in Shandong should pay attention to avoid unintentionally renewing contracts to prevent the risks of concluding open-ended employment contracts.