The Ministry of Human Resources and Social Security of the
People's Republic of China published Provisions on
Enterprise Mass Layoff (Draft for Comments) (the "Draft
Provisions") on December 31, 2014, and requested the
submission of public comments and opinions on the Draft Provisions
by January 31, 2015.
Currently, Article 41 of the Labor Contract Law (the
"LCL") regulates enterprise mass layoffs. The Draft
Provisions further supplement the procedural requirements under
Article 41. In particular, the Draft Provisions set forth specific
information that an enterprise is required to provide to the trade
union or all employees prior to the mass layoff, content that a
layoff plan must cover, and specific documents that must be filed
with the local labor authority.
Moreover, the Draft Provisions provide for certain new articles
not covered under Article 41 of the LCL. Article 18 of the Draft
Provisions states that if an enterprise intends to terminate 20 or
more employees through mutual agreement under the circumstances
listed in Article 41 of the LCL, the enterprise must notify the
labor union or all employees 30 days in advance and report the
number of employees that the enterprise is intending to terminate
to the local labor authority.
Currently, if an enterprise intends to terminate 20 or more
employees, it may be more willing to adopt the approach of
termination through mutual agreement rather than going through the
mass layoff procedure under Article 41 of the LCL. This is because
mutual termination is more straightforward in terms of process and
may avoid the imposition of other obligations, including notifying
the labor union and filing with the local labor authority. However,
Article 18 of the Draft Provisions will further tighten the
procedure of termination through mutual agreement if it involves 20
or more employees. It remains to be seen whether these additional
obligations will be included in the final version of this
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.
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