China: How to lawfully adjust the post or salary of an employee unilaterally by an employer?

Labour Law Newsletter
Last Updated: 18 February 2015

by Maggie Kong, Shane Lou, Susan Shan, Kent Xu, Grace Yang, Anderson Zhang and John Zhou

Unilateral adjustment of post or salary is the most likely situation where a labor dispute may arise. It involves the balance between employers' right to recruitment and employees' right to employment. Hence, the Employment Law and Human Resource Committee of Dacheng Law Offices summarizes the main practices regarding this difficult issue for your reference.

  1. Circumstances stipulated by law where employers are entitled to adjust employee' post or salary

Article 35 of the Employment Contract Law of PRC regulates: 'an employer and an employee may amend the provisions of their employment contract if they so agree after consultations. ' This regulation means that consultation is one way to amend the employment contract, but it does not exclude an employer's right to revise the employment contract unilaterally. On the contrary, Item one and Item two of Article 40 of the Employment Contract Law of PRC not only grant an employer the right to terminate the employment relationship with an employee who does not violate the internal rules or regulations of the employer but grant an employer the right to adjust the post of an employee unilaterally under the circumstances where the employee's medical treatment period expires or the employee is not competent to his job. While pursuant to Item three of Article 40 of the Employment Contract Law of PRC and the Reply regarding Relevant Questions of Disputes due to Post Adjustment between Employees and Employers issued by the General Office of Ministry of Labor, when a major change in the objective circumstances relied upon at the time of conclusion of the employment contract renders it unperformable, if the employers put forward the offer of post or salary adjustment, the employee should either take the offer or accept the termination. Employers, in fact, have the right to unilaterally adjust the employees' posts or salaries.

  1. Circumstances recognized by law where employers are entitled to adjust employee' post or salary indirectly by the lawful internal rules or regulation formulated by the employers

Item one of Article 4 of the Employment Contract Law of PRC regulates that employers shall establish and improve internal rules and regulations, so as to ensure that employees enjoy their labor rights and perform their labor obligations. Besides, Item two of Article 4 of the Employment Contract Law of PRC regulates that the internal rules and regulations cover matters, that have a direct bearing on the immediate interests of employees, such as those concerning labor compensation, work hours, rest, leave, work safety and hygiene, insurance, benefits, employee training, work discipline or work quota management. The post and salary of employees are of course within the scope. Considering this, the evaluation of the legality concerning the unilateral adjustment of employees' post or salary by employers conducted by the judicial authority will focus on whether the employers' internal rules and regulations are lawful, whether these internal rules and regulations are passed through democratic procedures, violate laws, administrative regulations or policies, and are publicly displayed to the employees.

  1. The latest judicial interpretation lowers the strictness of the regulation of Article 35 of the Employment Contract Law of PRC that amendments to an employment contract shall be made in writing. As a result, this leads the legalization of the unilateral adjustment of post or salary for some employees who could not prove their clear objection.

Article 11 of the Supreme People's Court's Interpretation on Several Issues Concerning the Application of the Law in Labor Dispute Trials (IV) regulates that amendments to an employment contract not made in writing, namely made in verbal and the amendments do not go against with the law, administrative regulation, state policies and pubic order and good customs and have been performed for over a month. If the party involved claims that the orally amended employment contract is invalid due to the lack of written form, the People's court shall not uphold. It may mean that if employers unilaterally adjust employees' post or salary and the amended employment contracts which do not go against with the law, administrative regulation, state policies and pubic order and good customs and have been performed for over a month, without opposite evidence to prove that employees have rejected the adjustment, employers' unilateral adjustment of post or salary will become legitimate due to employees' failure to provide evidence.

  1. Of course, employers' right to recruitment which includes the unilateral adjustment of post or salary shall be subject to the law and is likely to receive the judicial review on reasonability.

Article 5 of Special Provisions on Labor Protection of Female Workers regulates that employers shall not reduce the wages of female workers, dismiss female workers or rescind the labor or employment contracts with female workers when the female workers are pregnant, give birth or breast-feed their babies. As for the female workers who are pregnant, give birth or breast-feed their babies, employers can adjust their post but cannot lower their salary. Besides, although Article 11 of the Supreme People's Court's Interpretation on Several Issues Concerning the Application of the Law in Labor Dispute Trials (IV) gives convenience to employers, it puts forward the review requirement that the amended employment contract shall not go against with the law, administrative regulation, state policies and pubic order and good customs. That is to say, the judicial authority will not only review the legality of unilateral adjustment of post or salary but will review the reasonability of that as well. Hence, there are some local trial practices. For example, Article 22 of the Directive Opinion about Several Issues regarding the Application of Employment Contract Law of PRC and Labor Dispute Mediation and Arbitration Law of PRC Issued by Guangdong Supreme People's Court and Guangdong Provincial Labor Dispute Arbitration Commission in 2012 stipulates that employers adjusting the employees' post would be viewed as the act that employers are exercising the autonomous right of recruitment legally if the circumstances below would be followed at the same time, if the employees request to rescind the employment contract and ask the employers to pay economic compensation using the reason that employers' post adjustment is without permission, the court shall not uphold:(1) post adjustment is out of the need of employers' production and operation; (2) employees'salary of new post is evenly matched to salary of their former ones; (3) post adjustment is not used for insult or punishment; (4) there are no other circumstances that would violate laws or regulations. Item three of Article 6 of Answers to Several Questions regarding Labor Dispute Case Trial Issued by Shanghai Supreme Court specifies that if the employment contract has stipulated the relative conditions of post and salary adjustment, both parties can follow those articles. Although there is agreement in the employment contract and the adjustment conditions and directions are not clear, employers should provide sufficient evidence to prove the reasonability of adjustment. Otherwise, employees could request employers to revoke the decision of adjustment.

Case Study: Cautiously Handling Post Adjustment though Employee fails to Pass Year-end Evaluation but Rejects

In November 2010, a worker found a job at a company, working at the post A. As the worker's year-end evaluation of 2012 was just competent, the company decided not to grant him the year-end bonus and to adjust his post to post B. The worker refused to work at the post B and the company unilaterally terminated his employment relationship pursuant to the company's internal rules and regulations: refusing to obey reasonable post adjustment should be deemed as absent from work for three days.

The worker then applied for labor arbitration, claiming the company to pay the year-end bonus of 2012 and economic compensation for illegal termination. The arbitration commission rejected his claim of year-end bonus but upheld his claim of economic compensation. The company dissatisfied with the award and sued at the court. The court held that when the company adjusted the employee's post according to his working performance but could not reach an agreement with the employee, the company shall positively communicate and negotiate with the employees to reach an agreement upon post adjustment, work suspension or termination of the employment contract. However, when the employee expressively rejected the post adjustment and the company did not put forward evidence to prove that it had notified the employee to work at the new post within specific time limit, the unilateral termination on the ground 'refusing to obey reasonable post adjustment should be deemed as absent from work for three days' was clearly not appropriate. Hence, the court ruled that the company lost the lawsuit. The company appealed, and both parties reached settlement in the second instance.

Our Committee is in the opinion that the ruling of the court in the first instance is not appropriate. Employers' unilateral adjustment of employees' post according to effective internal rules and regulation and employees' working performance belongs to the employers' right to recruitment. The court's request of further communication and negotiation by the company when the employees expressively reject reasonable post adjustment does not have legal grounds. While, as the labor law adopts the tendency of protecting the employees, from the perspective of lowering the legal risks of employers, employers shall formulate effective internal rules and regulations to prove the legality of post adjustment on the one hand. On the other hand, employers shall be cautious when the employees expressively reject the post adjustment by offering reasonable waiting period for employees. If the employees still refuse reasonable adjustment when the waiting period expires, the employer may terminate the employment contract on the ground of material violation of the internal rules and regulations of the employers, which may be recognized by judicial authority more easily.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.