Labor Contract Law of the People's Republic of China
(Adopted at the 28th Session of Standing Committee of the Tenth National People's Congress of the People's Republic of China on June 29, 2007；amended in accordance with the Decision on Amending the Labor Contract Law of the People's Republic of China at the 30 the Session of the Standing Committee of the Eleventh National People's Congress on December 28, 2012; Order No.73 of the President of the People's Republic of China)
Contents
Chapter I General Provisions
Chapter II Conclusion of a Labor Contract
Chapter III Performance and Modification of a Labor Contract
Chapter IV Revocation and Termination of a Labor Contract
Chapter V Special Provisions
Section 1 A Collective Contract
Section 2 Labor Dispatch
Section 3 Part-Time Employment
Chapter VI Supervision and Inspection
Chapter VII Legal Responsibility
Chapter VIII Supplementary Provisions
Chapter I General Provisions
Article 1 This Law is enacted in order to improve the labor contract system, define the rights and obligations of both parties to a labor contract, protect the legitimate rights and interests of employees, and establish and develop a harmonious and stable labor relationship.
Article 2 This Law is applicable where organizations such as enterprises, self-employed economic organizations and private non-enterprise entities within the territory of the People’s Republic of China (hereinafter referred to as employers) establish labor relationships with employees through concluding, performing, modifying, revoking or terminating labor contracts with them.
State organs, institutions and public organizations and the employees with whom they are to establish labor relationships shall conclude, perform, modify, revoke or terminate labor contracts in accordance with this Law.
Article 3 Labor contracts shall be concluded in adherence to the principles of lawfulness, fairness, equality, voluntariness, consensus through consultation, and good faith.
A labor contract concluded in accordance with law shall have binding force. Both the employer and the employee shall fulfill the obligations stipulated in the labor contract.
Article 4 Employers shall establish and improve labor rules and regulations to ensure that employees enjoy the labor rights and fulfill the labor obligations.
When formulating or modifying the rules and regulations, or making decisions on important matters, which have a direct bearing on the immediate interests of employees, such as labor remuneration, working hours, rest and vacation, occupational safety and health, insurance and welfare, training, labor discipline and labor quota control, the employer shall, after discussion by the conference of employees or all the employees, put forward plans and suggestions and make decisions after consulting with the trade union or the representatives of the employees on an equal footing.
If, during the implementation of the rules and regulations or the decisions on important matters, the trade union or the employees hold that such rules, regulations or decisions are inappropriate, it or they are entitled to put forward the opinion to the employer, and have the rules, regulations or decisions modified and improved through consultation.
The employer shall make public or inform the employees of the rules and regulations, and the decisions on important matters, which have a direct bearing on the immediate interests of the employees.
Article 5 The administrative department of labor of the people’s government at or above the county level shall, together with the representatives of the trade union and the enterprise, establish a sound tripartite mechanism for coordination of labor relationships, in order to jointly discuss and resolve the major issues concerning labor relationships.
Article 6 The trade union shall give assistance and guidance to the employees in lawfully concluding labor contracts with the employer and performing the same, and establish a collective consultation mechanism with the employer in order to protect the legitimate rights and interests of employees.
Chapter II Conclusion of a Labor Contract
Article 7 A labor relationship is established by an employer with an employer as of the date the former employs the latter. An employer shall keep a register of employees for reference.
Article 8 When an employer recruits an employer, it shall truthfully inform him of the job description, the working conditions, the place of work, occupational hazards, conditions for work safety, labor remuneration and other matters which the employee requests to be informed of. The employer has the right to acquire the basic information of the employee which is directly related to the labor contract, and the employee shall truthfully provide the same.
Article 9 When recruiting an employer, the employer may not detain the employee’s resident identity card or other certificates, nor may it require him to provide guaranty or collect money or things of value from him in other names.
Article 10 To establish a labor relationship, a written labor contract shall be concluded.
In the event that no written labor contract is concluded at the time when a labor relationship is established, such a contract shall be concluded within one month as of the date when the employer employs an employer.
Where an employer and an employer conclude a labor contract before the latter starts to work, the labor relationship shall be established as of the date when the latter starts to work.
Article 11 In the event that an employer fails to conclude a written labor contract with an employer at the same time as it employs him, and labor remuneration agreed upon with him is not definite, the remuneration shall be decided on according to the rate specified in the collective contract; where there is no collective contract or the collective contract is silent on the matter, equal pay for equal work shall be practiced.
Article 12 Labor contracts consist of fixed-term labor contracts, open-ended labor contracts and labor contracts that expire upon completion of given jobs.
Article 13 A fixed-term labor contract is one the ending date of which is agreed upon between the employer and the employee.
An employer and an employer may conclude a fixed-term labor contract upon reaching consensus through consultation.
Article 14 An open-ended labor contract is one where the employer and the employee have agreed not to stipulate a definite ending date.
An employer and an employer may conclude an open-ended labor contract upon reaching consensus through consultation. If an employer proposes or agrees to renew the labor contract or to conclude a labor contract in any of the following circumstances, an open-ended labor contract shall be concluded, unless the employee requests the conclusion of a fixed-term labor contract:
(1) The employee has been working for the employer for a consecutive period of 10 or more years;
(2) The employee has been working for the employer for a consecutive period of 10 or more years but less than 10 years away from the statutory retirement age when the employer introduces the labor contract system or when the State-owned enterprise has to conclude a new labor contract with him as a result of restructuring; or
(3) The employee intends to renew the labor contract after he has consecutively concluded a fixed-term labor contract with the employer twice and he has not been found in any of the circumstances specified in Article 39 or Subparagraph (1) or (2) in Article 40 of this Law.
If an employer fails to conclude a written labor contract with an employer within one year as of the date when it employs the employee, it shall be deemed to have concluded an open-ended labor contract with the latter.
Article 15 A labor contract that expires upon completion of a given job is one in which the employer and the employee have agreed that the period for completion of the given job is the term of the contract.
An employer and an employer may, upon reaching consensus through consultation, conclude a labor contract which expires upon completion of a given job.
Article 16 A labor contract shall become effective when the employer and the employee reach agreement through consultation thereon and both parties sign or affix their seals on the copies of the contract.
The employer and the employee shall each keep a copy of the labor contract.
Article 17 A labor contract shall contain the following terms:
(1) name, domicile and legal representative or the principal leading person of the employer;
(2) name, address and the number of the resident identity card or of other valid identity documents of the employee;
(3) term of the labor contract;
(4) job description and the place of work;
(5) working hours, rest and vacation;
(6) labor remuneration;
(7) social insurance;
(8) occupational protection, working conditions and protection against occupational hazards; and
(9) other terms which are required to be included in a labor contract, as provided for by laws and regulations.
In addition to the requisite terms mentioned above, an employer and an employer may agree to have other matters stipulated in the labor contract, such as probation period, training, confidentiality, supplementary insurance and welfare benefits.
Article 18 If a dispute arises because the labor remuneration rate, the standard for working conditions, etc. are not definitely specified in the labor contract, the employer and the employee may negotiate anew. If the negotiation is unsuccessful, the relevant stipulations of the collective contract shall be applicable. If there is no collective contract or the collective contract is silent on the issue of labor remuneration, equal pay for equal work shall be practiced. If there is no collective contract or the collective contract is silent on the standards for working conditions, etc., the relevant regulations of the State shall apply.
Article 19 If the term of a labor contract is more than three months but less than one year, the probation period may not exceed one month; if the term is more than one year but less than three years, the probation period may not exceed two months; and if the term is fixed for three or more years or is open-ended, the probation period may not exceed six months.
An employer and an employer may agree upon only one probation period.
No probation period may be stipulated in a labor contract that expires upon completion of a given job or in a labor contract for a term of less than three months.
The probation period shall be included in the term of a labor contract. If a labor contract only provides for a probation period, that period shall not stand and the term provided for shall be the term of the labor contract.
Article 20 The wage of an employer on probation shall not be lower than the lowest wage level for the same job of the employer or be less than 80 per cent of the wage agreed upon in the labor contract, and shall not be lower than the minimum wage rate in the place where the employer is located.
Article 21 An employer may not revoke a labor contract during the probation period unless the employee is found in one of the circumstances specified in Article 39 or Subparagraph (1) or (2) in Article 40 of this Law. If an employer revokes a labor contract during the probation period, it shall explain the reasons to the employee.
Article 22 If an employer provides special funding for an employer’s training and gives him professional technical training, it may conclude an agreement with the employee specifying the term of service.
If the employee breaches the agreement on the term of service, he shall pay a penalty to the employer as agreed upon. The sum of the penalty may not exceed the training expenses paid by the employer. The penalty that the employer requires the employee to pay may not exceed the portion of the training expenses allocable to the unperformed portion of the term of service.
Where the employer and the employee reach an agreement on the term of service, the raise in the employee’s remuneration according to the regular wage adjustment mechanism during the term of service shall not be adversely affected.
Article 23 An employer and an employer may have such terms stipulated in the labor contract as keeping business secrets of the employer and keeping confidential the matters relating to its intellectual property rights.
With regard to an employer who has a confidentiality obligation, the employer may have stipulated in the labor contract or confidentiality agreement competition restriction and payment of financial compensation to him on a monthly basis during the term of the competition restriction after the labor contract is revoked or terminated. If the employee breaches the stipulation on competition restriction, he shall pay penalty to the employer as agreed upon.
Article 24 The persons subject to competition restriction shall be limited to senior managers, senior technicians and other persons who are under the confidentiality obligation to the employer. The scope, geographic area and term of competition restriction shall be agreed upon by the employer and the employee, and such agreement shall not be at variance with the provisions of laws and regulations.
The term of competition restriction, calculated from the revocation or termination of the labor contract, for one of the persons, as mentioned in the preceding paragraph, to go to work for a competing employer that produces or deals in the same type of products or is engaged in the same type of business as his original employer, or to establish his own business to produce or deal in the same type of products or engage in the same type of business shall not exceed two years.
Article 25 With the exception of the circumstances specified in Articles 22 and 23 of this Law, an employer shall not enter into an agreement with an employer on payment of penalty by the employee for breach of contract.
Article 26 A labor contract shall be invalid or partially invalid under one of the following circumstances:
(1) The labor contract is concluded or modified against a party’s true intention by means of deception or coercion, or when the party is in precarious situations;
(2) The employing unit disclaims its statutory responsibility or denies the worker his rights; or
(3) The labor contract is at variance with the mandatory provisions of laws or administrative regulations.
If a dispute arises over the invalidity or partial invalidity of a labor contract, the matter shall be determined by a labor dispute arbitration institution or a people’s court.
Article 27 If part of a labor contract is invalid, which does not affect the validity of the rest of the contract, the rest shall remain valid.
Article 28 If a labor contract is determined to be invalid but the employee has performed it, the employer shall pay the employee remuneration. The amount of remuneration shall be determined mutatis mutandis according to that for the employees holding the same or similar posts in the employer.
Chapter III Performance and Modification of a Labor Contract
Article 29 An employer and an employer shall fully perform their respective obligations in accordance with the labor contract.
Article 30 The employer shall pay their employees remuneration on time and in full in accordance with the labor contract and the regulations of the State.
If an employer defaults in payment or underpays the labor remuneration, the employee concerned may, in accordance with law, apply to the local people’s court for an order for payment, and the people’s court shall issue such an order in accordance with law.
Article 31 The employer shall strictly implement the norm set for labor quota and shall not compel the employees to work overtime or do so in disguised form. If an employer arranges for an employer to work overtime, it shall give him overtime pay in accordance with the relevant regulations of the State.
Article 32 An employer shall not be deemed to be breaching the labor contract if he refuses to perform hazardous operations under instructions given in violation of rules and regulations or peremptorily given by a manager of the employer.
An employer shall have the right to criticize or report or lodge accusations against the employer in respect of the working conditions that endanger his life or health.
Article 33 Where an employer alters its name, replaces its legal representative, the principal leading person or investor(s), etc., performance of the labor contract shall not be affected.
Article 34 Where an employer is merged, divided, etc., the existing labor contract shall remain valid and continue to be performed by the employer which succeeds to its rights and obligations.
Article 35 An employer and an employer may modify the provisions of the labor contract, if they reach consensus on the matter through consultation. Modification of a labor contract shall be made in writing.
The employer and the employee shall each keep a copy of the modified labor contract.
Chapter IV Revocation and Termination of a Labor Contract
Article 36 An employer and an employer may revoke the labor contract if they reach consensus on the matter through consultation.
Article 37 An employer may have the labor contract revoked by giving a written notification to the employer 30 days in advance. During the probation period, an employer may have the labor contract revoked by notifying the employer of his intention three days in advance.
Article 38 An employer may have the labor contract revoked if the employer is found in any of the following circumstances:
(1) failing to provide occupational protection or working conditions as agreed upon in the labor contract;
(2) failing to pay labor remuneration on time and in full;
(3) failing to pay the social insurance premiums for the employee in accordance with law;
(4) having rules and regulations that are at variance with laws or regulations, thereby impairing the employee’s rights and interests;
(5) invalidating the labor contract as a result of one of the circumstances specified in the first paragraph of Article 26 of this Law; or
(6) other circumstances in which an employer may have the labor contract revoked as provided for by laws or administrative regulations.
If an employer forces a person to work by resorting to violence, intimidation or illegal restriction of personal freedom, or if it gives instructions in violation of rules and regulations or gives peremptory orders to the employee to perform hazardous operations, which endanger his personal safety, the latter may revoke the labor contract forthwith without notifying the employer of the matter in advance.
Article 39 The employer may have the labor contract revoked if an employer is found in any of the following circumstances:
(1) being proved unqualified for recruitment during the probation period;
(2) seriously violating the rules and regulations of the employer;
(3) causing major losses to the employer due to serious dereliction of duty or engagement in malpractices for personal gain;
(4) concurrently establishing a labor relationship with another employer, which seriously affects the accomplishment of the task of the original employer, or refusing to rectify after the original employer brings the matter to his attention;
(5) invalidating the labor contract as a result of the circumstance specified in Subparagraph (1) of the first paragraph of Article 26 of this Law; or
(6) being investigated for criminal responsibility in accordance with law.
Article 40 In one of the following circumstances, an employer may revoke the labor contract, if it notifies in writing the employee of its intention 30 days in advance or after paying him an extra one month salary:
(1) The employee is unable to take up his original work or any other work arranged by the employer on the expiration of the specified period of medical treatment for illness or for injury incurred when not at work;
(2) The employee is incompetent for the post and remains incompetent after receiving a training or being assigned to another post; or
(3) The objective conditions taken as the basis for conclusion of the contract have greatly changed, so that the original labor contract cannot be performed and, after consultation between the employer and the employee, no agreement is reached on modification of the contents of the labor contract.
Article 41 If, in any of the following circumstances, an employer needs to cut employment by more than 20 persons, or by less than 20 persons, which, however, accounts for more than 10 per cent of the total number of the enterprise’s employees, it may do so after it explains the situation to the trade union or all of its employees 30 days in advance, solicits opinions from among them and submit its plan for cutting employment to the administrative department of labor:
(1) The enterprise is to undergo reorganization pursuant to the provisions of the Law on Enterprise Bankruptcy;
(2) The enterprise is in dire straits in production and management;
(3) The enterprise changes its line of production, introduces a major technological updating or adjusts its business method, and, after modification of the labor contracts, still needs to reduce its personnel; or
(4) The objective economic conditions taken as the basis for conclusion of the labor contracts have greatly changed, so that the original labor contracts cannot be performed.
When cutting employment, the employer shall continue to employ the following persons by giving priority to them:
(1) persons who have concluded fixed-term labor contracts for a relatively long term with the employer;
(2) persons who have concluded open-ended labor contracts with the employer; and
(3) persons none of whose other family members has a job or who have an elder or minor depending on his support.
If an employer that has cut its employment pursuant to the provisions in the first paragraph of this Article goes to recruit employees anew within six months, it shall give notification to the laid off persons and, under equal conditions, recruit them before others.
Article 42 The employer may not revoke the labor contract concluded with the employee, who is under one of the following circumstances, by applying the provisions in Articles 40 and 41 of this Law:
(1) Being engaged in operations exposed to occupational disease hazards, the employee is not given pre-departure occupational health examinations, or being suspected of an occupational disease, is in the process of being diagnosed or is under medical observation;
(2) Having contracted an occupational disease or being injured at work, the work is confirmed to have totally or partially lost the ability to work;
(3) The employee is in the prescribed period of medical treatment for illness, or for injury incurred when not at work, and;
(4) The employee is during the pregnant, puerperal or breast-feeding stage;
(5) The employee has been working for the employer continuously for 15 years in full and is less than 5 years away from the statutory retirement age; or
(6) The employee is in any other circumstances as provided for by laws or administrative regulations.
Article 43 Where an employer intends to revoke a labor contract unilaterally, it shall notify the trade union of the reasons in advance. If the employer violates the provisions of laws or administrative regulations or the labor contracts, the trade union shall have the right to demand that the employer put it right. The employer shall consider the trade union’s opinion and notify the trade union in writing of the settlement of the matter.
Article 44 A labor contract shall be terminated under one of the following circumstances:
(1) The term of the contract expires;
(2) The employee concerned begins to enjoy the benefits of the basic old-age insurance pension in accordance with law;
(3) The employee concerned dies, or is declared dead or missing by the people’s court;
(4) The employer is declared bankrupt in accordance with law;
(5) The business license of the employer is revoked, the employer is ordered to close down or to dissolve, or it decides to dissolve on an earlier date; or
(6) any other circumstances provided for by laws and administrative regulations.
Article 45 At the expiration of a labor contract, under one of the circumstances prescribed in Article 42 of this Law, the term of the labor contract shall be extended until the necessary conditions cease to exist. However, the termination of a labor contract with an employer who has totally or partially lost the ability to work, as specified in Subparagraph (2) of Article 42 of this Law shall be handled in accordance with the regulations of the State governing insurance for work-related injury.
Article 46 The employer shall pay financial compensation to an employer under one of the following circumstances:
(1) The employee revokes the labor contract pursuant to the provisions in Article 38 of this Law;
(2) The employer proposes revocation of the labor contract to the employee pursuant to the provisions in Article 36 of this Law and the parties reach an agreement thereon through consultation;
(3) The employer revokes the labor contract pursuant to the provisions in Article 40 of this Law;
(4) The employer revokes the labor contract pursuant to the provisions in the first paragraph of Article 41 of this Law;
(5) The fixed-term labor contract is terminated pursuant to the provisions in Subparagraph (1) of Article 44 of this Law, except that the employee does not agree to renew the contract even though the employer maintains the same conditions as, or offers better conditions than, the ones stipulated in the previous contract;
(6) The labor contract is terminated pursuant to the provisions of Subparagraph (4) or (5) of Article 44 of this Law; or
(7) Under any other circumstances provided for by laws or administrative regulations.
Article 47 Financial compensation shall be paid on the basis of the number of years a person works in a entity, the rate being one month’s salary for the work of one full year. If he has worked for six months or more but less than one year, the time shall be calculated as one year; and if he has worked for less than six months, he shall be paid half of his monthly salary as financial compensation.
If the monthly salary of an employer is three times the average monthly salary of the employees of the region for the previous year, which is published by the people’s government of the municipality directly under the Central Government or by that of the city divided into districts where the employer is located, the rate for his financial compensation payable shall be three times the average monthly salary of the employees, and the number of years involved shall not exceed 12 years.
For the purposes of this Article, the monthly salary means the average of a given employee’s monthly salary for the 12 months prior to the revocation or termination of the labor contract.
Article 48 Where an employer revokes or terminates a labor contract in violation of the provisions of this Law and the employee involved demands continued performance of the contract, the employer shall continue performing the same. If the employee does not demand so or if it becomes impossible for continued performance of the labor contract, the employer shall pay compensation pursuant to the provisions in Article 87 of this Law.
Article 49 The State takes measures to establish and improve an inter-regional system to ensure that an employer’s social insurance account is continued when he is transferred to another region.
Article 50 An employer shall issue a certificate of revocation or termination of the labor contract at the time of its revocation or termination and shall, within 15 days, undergo the formalities for the transfer of the employee’s personal file and social insurance account.
The employee shall hand over the matters related to his work as agreed upon by both parties. If the employer needs to pay financial compensation to the employee according to the relevant provisions of this Law, it shall make such payment upon completion of the procedure for handover of the work-related matters.
The employer shall keep the copy of a revoked or terminated labor contract for at least two years for reference.
Chapter V Special Provisions
Section 1 A Collective Contract
Article 51 The employees of an enterprise as one party and the employer as the another may, through negotiation on an equal basis, conclude a collective contract on matters relating to labor remuneration, working hours, rest and vocation, occupational safety and health, insurance, welfare benefits, etc. The draft collective contract shall be submitted to the employee’s congress or to all the employees for discussion and adoption.
A collective contract shall be concluded by the trade union on behalf of the employees of the enterprise with the employer. In an enterprise where a trade union has not yet been set up, such a contract shall be concluded with the employer by the representatives elected by the employees under the guidance of the trade union at a higher level.
Article 52 The employees of an enterprise as one party may conclude special collective contracts with the employer in respect of occupational safety and health, protection of the rights and interests of female employees, wage adjustment mechanism, etc.
Article 53 In regions at or below the county level, industry-wide or region-wide collective contracts may be concluded between the trade unions and the representatives of the enterprises engaging in such industries as construction, mining and catering service.
Article 54 After conclusion, a collective contract shall be submitted to the administrative department of labor and it shall become valid if the department raises no objection within 15 days from the date it receives the text of the labor contract.
A collective contract concluded in accordance with law is binding on the employer and the employees. An industry-wide or region-wide collective contract is binding on the employers and the employees engaged in a given local industry or a given region.
Article 55 The rates for labor remuneration and the standards for working conditions, etc. stipulated in a collective contract shall not be lower than the minimum rates and standards prescribed by the local People’s government. The rates for labor remuneration and standards for working conditions, etc. stipulated in the labor contract between an employer and an employer shall not be lower than those stipulated in the collective contract.
Article 56 Where an employer breaches the collective contract and infringes upon the labor rights and interests of the employees, the trade union concerned may, in accordance with law, demand that the employer assume liability. If a dispute arise over the performance of the collective contract and cannot be resolved through consultation, the trade union may apply for arbitration or bring a lawsuit in accordance with law.
Labor Dispatch
Article 57 To engage in the labor dispatch business, an entity shall satisfy the following conditions:
(1) registered capital is not less than two million yuan;
(2) has fixed business premises and facilities suitable for businesses;
(3)has labor dispatch management rules in compliance with the provisions of laws and administrative regulations; and
(4) satisfies other conditions prescribed by laws and administrative regulations.
engage in the labor dispatch business, an entity shall apply to the labor administrative department for administrative licensing in accordance with law; and after obtaining licensing, shall undergo corresponding company registration formalities in accordance with law. No entity or individual may engage in the labor dispatch business without licensing.
Article 58 For the purposes of this Law, a labor dispatch entity is an employer which performs the obligation of an employer to the employees. In the labor contract concluded between the labor dispatch entity and the employees to be dispatched shall, in addition to the terms specified in Article 17 of this Law, be specified such terms as the entitys to which the employees are to be dispatched, the period of dispatch and the specific jobs.
The labor dispatch entity shall conclude with the employees to be dispatched a fixed-term labor contract for a period of not less than two years and shall pay labor remuneration on a monthly basis. During the intervals when there is no work to do, the labor dispatch entity shall pay labor remuneration on a monthly basis at the minimum wage rate prescribed by the people’s government of the place where the employees are working.
Article 59 When dispatching employees, the labor dispatch entity shall conclude an agreement on labor dispatch with the entity that receives the employees under the dispatch arrangement ( hereinafter referred to as the receiving entity). In the agreement on labor dispatch shall be stipulated the jobs dispatched to, the number of persons, the period for dispatch, the amounts and methods of payment of labor remuneration and social insurance premiums, and the liability for breach of the agreement.
An receiving entity shall decide with the labor dispatch entity on the period of dispatch based on the actual need for jobs and shall not divide a continuous period of employment in order to conclude a number of short-term agreements.
Article 60 The labor dispatch entity shall inform the employees to be dispatched of the content of the agreement on labor dispatch.
The labor dispatch entity shall not pocket the labor remuneration that the receiving entity pays to the employees in accordance with the agreement on labor dispatch.
The labor dispatch entity and the receiving entity may not charge any fees from the employees dispatched.
Article 61 If a labor dispatch entity dispatches employees to a receiving entity located in another place, the labor remuneration and working conditions to be enjoyed by the employees dispatched shall be provided in conformity with the rates and standards of the place where the receiving entity is located.
Article 62 The receiving entity shall perform the following obligations:
(1) to apply the labor standards of the State and provide the necessary working conditions and occupational protection;
(2) to inform the dispatched workers of the job requirements and labor remuneration;
(3) to give overtime pay and performance bonuses and provide welfare benefits related to specific posts;
(4) to provide the dispatched workers training that is necessitated by the job they are on; and
(5) to apply a regular wage adjustment mechanism in case of continued employment.
The receiving entity may not re-dispatch the employees to another employers.
Article 63 Dispatched workers shall have the right to receive the same pay with that received by the employers' employees for the same work. An employer shall, under the principle of equal pay for equal work, adopt the same methods for the distribution of labor remuneration for the dispatched workers and its employees same position. Where the employer has no employee at the same position, it shall determine the remuneration by reference to that paid to employees at the same or similar position at the place where the employer is located.
Employment contracts concluded between the labor dispatch entity and dispatched workers and the labor dispatch agreement concluded between the labor dispatch entity and the employer shall indicate or stipulate that the labor remuneration paid to dispatched workers shall comply with the provisions of the preceding paragraph.
Article 64 The dispatched workers shall have the right, in accordance with law, to join the trade union of the labor dispatch entity or the receiving entity or to organize a trade union, in order to protect their own legitimate rights and interests.
Article 65 Dispatched workers may have their labor contracts with the labor dispatch entity revoked pursuant to the provisions in Article 36 or 38 of this Law.
If a dispatched worker is in any of the circumstances specified in Article 39 and Subparagraph (1) or (2) of Article 40 of this Law, the receiving entity may send him back to the labor dispatch entity, which may have the labor contract with him revoked in accordance with the relevant provisions of this Law.
Article 66 Employment under employment contracts is the basic form of enterprises' employing employees in China. Labor dispatch is a supplementary form and shall exclusively apply to provisional, auxiliary or substitutive positions.
provisional position' as prescribed in the preceding paragraph means a position that exists for less than six months; ‘auxiliary position' means a non-major business position providing services to main business positions; and ‘substitutive position' means a position that may be held by any other employee on a substitutive basis during a certain period of time when the employee of the employer who originally holds the position is unable to work because such employee undergoing full-time training, on vacation or for any other reason.
Employer shall strictly control the number of dispatched workers, which shall not exceed a certain proportion of its total employees, and the specific proportion be prescribed by the labor administrative department of the State Council.
Article 67 No employer may establish labor dispatch entitys to dispatch employees to its own entity or to its subordinate entitys.
Section 3 Part-Time Employment
Article 68 Part-time employment is a form of employment under which remuneration is chiefly calculated by the hour and the employees generally work for not more than 4 hours per day in average and not more than an aggregate of 24 hours per week for the same employer.
Article 69 The two parties to part-time employment may conclude an oral agreement.
An employer in part-time employment may conclude a labor contract with one or more employers; however, the labor contract concluded later may not prejudice the performance of the one concluded earlier.
Article 70 The two parties to part-time employment may not conclude an agreement on probation period.
Article 71 Either of the two parties to part-time employment may give a notice to the other party at any time to terminate the employment, and in such a case the employer shall not pay any financial compensation.
Article 72 The hourly remuneration rate for part-time employment may not be lower than the minimum hourly wage rate specified by the people’s government of the place where the employer is located.
Labor remuneration settlement and payment cycle for part-time employment may not exceed 15 days.
Chapter VI Supervision and Inspection
Article 73 The administrative department of labor under the State Council shall be in charge of supervision over and administration of the implementation of the labor contract system nationwide.
The administrative departments of labor of the local people’s governments at or above the county level shall be in charge of supervision over and administration of the implementation of the labor contract system in their own administrative areas.
In supervising and administering the implementation of the labor contract system, the administrative departments of labor of the local people’s governments at or above the county level shall listen to the opinions of the trade unions, the enterprise representatives and the departments in charge of the specific industries.
Article 74 The administrative departments of labor of the local people’s governments at or above the county level shall, in accordance with law, supervise and inspect the implementation of the labor contract system in respect of the following matters:
(1) the rules and regulations formulated by the employers that have a direct bearing on the immediate interests of the employees, and the implementation of such rules and regulations;
(2) conclusion of labor contracts between employers and employees and their revocation;
(3) compliance with the relevant regulations on labor dispatch by the labor dispatch entitys and the receiving entitys;
(4) compliance by the employers with the State regulations on working hours, rest and vocation of employees;
(5) payment by the employers of labor remuneration as stipulated in the labor contracts, and their compliance with the minimum wage standards;
(6) purchase of the various types of social insurance by the employers for the employees, and payment of social insurance premiums by the same; and
(7) other matters subject to supervision and inspection concerning labor as specified in laws and regulations.
Article 75 When the administrative department of labor of a local people’s government at or above the county level conducts supervision and inspection, it shall have the right to check the materials relating to labor contracts and collective contracts and to conduct on-the-spot inspection of the workplaces, and both the employers and the employees shall truthfully provide relevant information and materials.
When staff members of an administrative department of labor conduct supervision and inspection, they shall produce their papers, exercise their duties and powers according to law and enforce the law in a polite manner.
Article 76 The departments in charge of supervision over and administration of construction, health, work safety, etc. under the people’s governments at or above the county level shall, within the limits of their respective duties, supervise and administer the implementation of the labor contract system by the employers.
Article 77 An employer whose legitimate rights and interests are infringed upon shall have the right to request the relevant department to deal with such infringement according to law, or to apply for arbitration or bring a lawsuit according to law.
Article 78 The trade unions shall protect the legitimate rights and interests of the employees in accordance with law and supervise the performance of labor contracts and collective contracts by the employers. Where an employer violates the labor laws or regulations or breaches a labor contract or a collective contract, the trade union concerned shall have the right to put forward its opinions or request rectification. Where an employer applies for arbitration or brings a lawsuit, the trade union concerned shall provide him with support and assistance in accordance with law.
Article 79 All organizations and individuals shall have the right to inform against violations of this Law, and the administrative departments of labor of the people’s governments at or above the county level shall verify and deal with such violations in a timely manner and reward the ones that perform meritorious service.
Chapter VII Legal Responsibility
Article 80 Where the rules and regulations of an employer that have a direct bearing on the immediate interests of employees are in contravention with the provisions of laws and regulations, the administrative department of labor shall order it to rectify and shall give it a warning. If harm is done to an employer, the employer shall be liable for compensation.
Article 81 Where the requisite terms provided for by this Law are not clearly stated in the text of a labor contract provided by an employer or an employer fails to deliver a copy of the labor contract to the employee, the administrative department of labor shall order it to rectify. If harm is done to the employee, the entity shall be liable for compensation.
Article 82 Where an employer fails to conclude a written labor contract with an employer for more than a month but less than a year from the date it starts employing him, it shall pay the employee two times his salary for each month.
Where an employer fails to conclude an open-ended labor contract with an employer in violation of the provisions of this Law, it shall pay the employee two times his salary for each month, starting from the date on which an open-ended labor contract should be concluded.
Article 83 Where in violation of the provisions of this Law, an employer reaches an agreement with an employer on a probation period, the administrative department of labor shall order it to rectify. If the illegal agreement on a probation period is executed, the employer shall pay compensation to the employee at the rate of the employee’s monthly salary following the completion of his probation, for the period of performance by the employee in excess of the statutory probation period.
Article 84 Where an employer, in violation of the provisions of this Law, detains an employer’s resident identity card or other certificates, the administrative department of labor shall order it to return the same to the employee within a time limit and impose on it a penalty in accordance with the provisions of relevant laws.
Where an employer, in violation of the provisions of this Law, collect money or things of value from the employees in the name of guaranty or in other names, the administrative department of labor shall order it to return the same to the employees within a time limit and impose on it a fine at the rate of not less than 500 yuan but not more than 2,000 yuan for each person from whom it has collected money or things of value; if harm is done to the employees, it shall be liable for compensation.
Where an employer detains an employer’s personal file or other articles when the employee has his labor contract revoked or terminated in accordance with law, it shall be penalized in accordance with the provisions in the preceding paragraph.
Article 85 Where an employer commits one of the following acts, the administrative department of labor shall order it to pay the labor remuneration, give overtime pay or make other financial compensation within a time limit; if the labor remuneration is lower than the local minimum wage rate, it shall pay the difference. If it fails to make such payment at the expiration of the time limit, it shall be ordered to pay an additional compensation to the employee at a rate of not less than 50 percent but not more than 100 percent of the amount payable:
(1) failing to pay an employer his labor remuneration on time and in full as stipulated in the labor contract or as prescribed by the State;
(2) paying labor remuneration at a rate below the local minimum wage rate;
(3) arranging overtime work but giving no overtime pay; or
(4) failing to pay the employee financial compensation pursuant to the provisions of this Law when revoking or terminating a labor contract.
Article 86 Where a labor contract is determined to be invalid in accordance with the provisions of Article 26 of this Law, which causes harm to the other party, the party in default shall be liable for compensation.
Article 87 Where an employer revokes or terminates a labor contract in violation of the provisions of this Law, it shall pay compensation to the employee two times the rate of financial compensation specified in Article 47 of this Law.
Article 88 Where an employer commits one of the following acts, it shall be subjected to an administrative sanction in accordance with law; if a criminal is constituted, it shall be investigated for criminal responsibility according to law; if harm is done to an employer, the employer shall be liable for compensation:
(1) forcing a person to work by resorting to violence, intimidation or illegal restriction of personal freedom;
(2) giving instructions in violation of rules and regulations or giving peremptory orders to an employer to perform hazardous operations, which endanger his personal safety;
(3) humiliating, giving corporal punishment to, beating , illegally searching or detaining an employer; or
(4) providing an employer with hazardous working conditions or a severely polluted environment, thus causing serious harm to the physical or mental health of the employee.
Article 89 Where in violation of the provisions of this Law, an employer fails to issue to an employer a written statement proving the revocation or termination of the labor contract, the administrative department of labor shall order it to rectify. If harm is caused to the employee, the entity shall be liable for compensation.
Article 90 Where an employer revokes the labor contract in violation of the provisions of this Law or breaches the confidentiality obligation or competition restriction stipulated in the labor contract, thus causing losses to the employer, he shall be liable for compensation.
Article 91 Where an employer recruits an employer whose labor contract with another employer has not yet been revoked or terminated, and thus causing losses to the other employer, it shall bear joint and several liability for compensation.
Article 92 Where any entity, in violation of the provisions of this Law, engages in the labor dispatch business without licensing, the labor administrative department order the violator to cease its violations, confiscate its illegal income, and impose a fine of one up to five times the amount of illegal income; or if there is no illegal income, may impose a fine of not more than 50,000 yuan on the violator.
Labor dispatch entity or employer that violates any provision of this Law on labor dispatch shall be ordered by the labor administrative department to make corrections within a prescribed time limit; and if the entity or employer fails to do so within the prescribed time limit, it shall be fined 5,000 yuan up to 10,000 yuan employee, and for a labor dispatch entity, its license for engaging in the labor dispatch business shall be revoked. Where the employer causes any damage dispatched worker, the labor dispatch entity and the employer shall assume joint and several liabilities.
Article 93 An employer without the lawful business qualifications shall, in accordance with law, be investigated for legal responsibility for its illegal or criminal acts. If the employees have done their work, the employer or its sponsor(s) shall pay them labor remuneration, financial compensation and damages in accordance with the relevant provisions of this Law. If losses are caused to the employees, the entity shall be liable for compensation.
Article 94 Where an individual that contracts for the operation of a business recruits employees in violation of the provisions of this Law, thus causing losses to the employees, the organization giving out the contract and the individual contractor shall bear joint and several liability for compensation.
Article 95 Where an administrative department of labor or another competent department concerned or its staff member neglects its/his duties and fails to perform the statutory duties, or exercises its/his functions and powers in violation of law, thus causing losses to an employer or an employer, it /he shall be liable for compensation; the person directly in charge and the other persons directly responsible shall be given administrative sanctions according to law; if a crime is constituted, it/he shall be investigated for criminal responsibility according to law.
Chapter VIII Supplementary Provisions
Article 96 Where there are stipulations made in other laws or administrative regulations or by the State Council to govern the conclusion, performance, modification, revocation or termination of labor contracts between public institutions and the persons employed by them under the employment system, the provisions there shall prevail; otherwise, the relevant provisions in this Law shall apply.
Article 97 A labor contract which is concluded in accordance with law prior to implementation of this Law and remains valid as of the date this Law goes into effect shall continue to be performed. With respect to the number of times for consecutive conclusion of a fixed-term labor contract, as provided for in Subparagraph (3) of the second paragraph in Article 14 of this Law, it shall begin to be calculated from the time the labor contract is renewed after this Law goes into effect.
Where a labor relationship is established prior to the implementation of this Law but no written labor contract is concluded yet, such a contract shall be concluded within one month from the date this Law goes into effect.
Where a labor contract which remains valid as of the date this Law goes into effect is revoked or terminated thereafter, financial compensation shall be paid pursuant to the provisions of Article 46 of this Law, and the number of years for which financial compensation should be paid shall be calculated from the date this Law goes into effect; where the employer should pay financial compensation to the employee concerned according to the relevant regulations at the time before this Law goes into effect, it shall do so in accordance with the relevant provisions then.
Article 98 This Law shall go into effect as of January 1, 2008.