In July 2015, the Ministry of Human Resources and Social
Security of the People's Republic of China ("PRC")
released Draft Provisions Related to the Implementation of PRC
Labor Contract Law for public comments ("Draft"). The
Draft provides detailed interpretations clarifying certain issues
that have arisen during the implementation of the current Labor
Contract Law. Although the provisions are still in draft form and
have no legal effect as yet, they contain various provisions that,
if adopted, would have a significant impact on the implementation
of the PRC Labor Contract Law.
The key provisions worth noting are as follows:
If a non-PRC employee has entered
into a labor contract with an employer in China but has not duly
obtained the working permit from the local labor authority, no
labor relationship will have been established.
Company policies that will directly
affect the employees' interests must be notified to the
employees, with the permitted methods for publication including
requesting employees to sign acknowledgement letters, organizing
training on new policies, etc.
Employers are entitled to impose
monetary fines on their employees if employees violate the company
policies and cause economic losses to the employers.
Labor contracts must be written in
Chinese, and the Chinese version will prevail over other versions
in any foreign languages.
An employer must enter into a
non-fixed-term labor contract with an employee if such employee has
served two fixed-term contracts consecutively, unless such employee
agrees otherwise (regardless of whether the employer is willing to
renew the labor contract).
If an employee is transferred to a
new employer that is an affiliate of the old one or the newly
registered entity after the dissolution of the old one, his/her
service year must be carried over to the new employer.
At the present time, it remains to be seen when and whether all
of these draft provisions will become legally effective.
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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