On January 26, 2014, the Legal Affairs Office of government of Beijing municipality released the Beijing Regulation on Labor Contract (draft for approval) (“Beijing Regulation on Labor Contract”). The key points are as follows:
- Protection on employee’s personal information: The employer has the right to request the employee to truthfully provide personal information about education background, work experience, employment status and health status in connection with his/her career. But the employer is obligated to keep the employee’s personal information confidential and must not publicize such information unless required by law or consented by the employee;
- Modification to open-ended employment contracts: If the employee satisfies the requirements to enter into an open-ended labor contract but has not done so due to the employer’s fault, the employees is entitled to request for executing an open-ended employment contract with the employer.
- Procedures for employee’s unilateral termination: If the employees unilaterally terminate the employment contracts in accordance with Article 38 (1) of the PRC Employment Contract Law, they should notify the employers the reasons in writing;
- Time Limit for Terminating Employment Contracts: When the employer unilaterally terminate an employment contract based upon the statutory ground specified in Items 2, 3, 4, 5, or 6 of Article 39 of the PRC Employment Contract Law, the time limit for the employer to unilaterally terminate the employment contract is five months from the date when the evidence and facts are certain;
- Notification Obligation on Modification of Employment Contracts: When an employer is under the circumstances of merger or division, the succeeding employer who bears all obligations of the original employment contracts should notify the employees such circumstance in writing;
- Procedures for Employers to Unilaterally Terminate Employment Contracts due to Significant Change of Objective Circumstances: Where the objective circumstances upon which the employment contract is concluded significantly changes and the changes cause the employment unable to be performed, the employer should notice the employee any changes of the employment contract in writing, and the employee should responses the notification within 15 days. If the employee fails to response within the time limit, it will be deemed an objection to the change, based on which the employer may terminate the employment contract unilaterally.
- Contract Management under Special Circumstances: Upon the expiration of employment contract, if the employees are in the statutory medical treatment period due to suffering from illness or non-work-related injury or female employees are in their pregnancy, maternity or nursing periods, the employment contract should extend until the corresponding circumstance disappears. However, if the extension of employment contract results in the situation of ten-year service of employee in the company, the employer should sign open-ended employment contract with this employee;
- Calculation of severance and starting point of years of service: For employment contracts which exist on the date when the Employment Contract Law came into force and terminate after the Employment Contract Law came into force, if the employer is obligated to pay severance, the years of service should be counted as of January 1, 2008. For the years of service before December 31, 2007, if the employer unilaterally dismisses the employee on the ground of health issues, substantial changes to objective circumstance or downsizing, the years of service should be counted as of the date when the employee started to provide labor to the employer.
KWM Comments: In practice, some employers fail to take disciplinary actions on employee who breaches the internal policies in a timely manner. The Draft for Approval has set a time limit, i.e. 5 months, on employer’s unilateral termination due to employee’s severe breach of internal policies. Employers in Beijing may pay attention to such legislation.