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The employment relationship
Country specific laws
What laws and regulations govern the employment relationship?
The main laws governing employment relationships in China are:
- the Labour Law;
- the Labour Contract Law;
- the Union Law;
- the Law on the Mediation and Arbitration of Labour Disputes;
- the Collective Contract Regulations;
- the Work Safety Law; and
- the Social Security Law.
Local regulations made pursuant to these laws and Supreme Court judicial interpretations are also important in this regard.
Who do these cover, including categories of worker?
These laws cover all workers and employers, as long as their relationships are considered labour relationships.
Are there specific rules regarding employee/contractor classification?
There are no specific rules regarding employee or contractor classification in China.
Must an employment contract be in writing?
Yes – the Labour Contract Law provides that in order to establish a labour relationship, an employment contract should be concluded in written form. An exception to this rule is that oral agreements are acceptable for part-time employment.
Are any terms implied into employment contracts?
There are many such terms. For example, the Labour Contract Law provides a comprehensive list of scenarios in which employers can terminate an employment contract. Even where such terms are not included in an employment contract, the employer can still rely on these statutory clauses in order to terminate the contract.
Are mandatory arbitration/dispute resolution agreements enforceable?
The Labour Contract Law does not grant the parties to an employment contract the right to agree on any arbitration or dispute resolution agreements other than those which are mandatory by law. Awards by the competent labour arbitral commissions and court judgments are enforceable.
How can employers make changes to existing employment agreements?
Under the Labour Contract Law, employers and employees can modify the provisions of an employment contract if they agree to do so after consultation. Modifications to an employment contract should be made in writing.
Is a distinction drawn between local and foreign workers?
In addition to the abovementioned laws, which apply equally to both Chinese and foreign workers, foreign nationals working in China must abide by other regulations specially designed for them and apply for work permits before they can be hired by employers in China.
Foreign persons working in China must participate in the Chinese social security system in the same way in which Chinese workers do, subject to some exceptions.
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