The purpose of this book is to present the practical issues of China’s employment law by answering “what should I do” in a concise question-and-answer way.

China’s employment law is a law that confuses many foreign investors or foreign employees in China. They feel that the legal provisions of the employment law are inconsistent with court decisions, and a same situation often leads to an opposite result. In my two decades as a Chinese lawyer and part-time labor arbitrator, I have often felt this confusion.

First of all, the employment law is the most influenced law by the past socialist planned economy in China, which is not suitable for the current situation of market-orientation after China’s reform and opening up from 1978. For example, although the Employment Contract Law stipulates trade unions and collective contracts, there is no real collective bargaining in reality; the practice of notifying trade unions of the procedural legitimacy requirements when employers terminate labor relations are also very different in various court around the country. In particular, China’s employment law has basic institutional framework defects. For example, although the law stipulates the distinction between employment relation and contract relation, the conditions for identifying employment relation are too narrow, resulting in such things as child labor and employees directly employed by foreign representative offices are not protected by the employment law, causing the Supreme Court had to publish special rules to protect the employment rights of these employees.

Secondly, there are surprising conflicts of legal rules in the implementation of employment law and inconsistencies between court decisions, which make employmentt disputes highly uncertain and increase the cost of litigation and undermine people’s trust in the law. For example, for employees who do not receive pension insurance benefits after reaching retirement age, whether the employer can terminate the contract according to the Employment Contract Law without paying economic compensation, the Ministry of Human Resources and Social Security and the Supreme People’s Court have different opinions, employment relationship being continuous and being dissolved. While in judicial practice, other than the two aforementioned practices, courts around the country have another practice in which deciding whether to continue or terminate the employment relationship depends on whether the employer is at fault for the employee’s failure to receive the pension insurance. The uncertainty of law enforcement is probably the biggest problem in China’s employment law.

Thirdly, there is a problem that employment legislation is not closely connected with practice, which leads to legal gaps or conflicts. For example, in the Employment Contract Law of 2008, the legislature created a new rule that after an employer and an employee have signed two consecutive fixed-term contracts, the renewal of the third contract must be a permanent contract. However, the law does not stipulate whether the employer has the right to terminate before the expiration of the second fixed contract and the legal consequences of the parties’ not signing a contract after the expiration of the second fixed-term contract and their voluntarily signing a third fixed-term contract. In the face of cases appealed to them, local courts have to make decisions on their own with no statutory support, resulting in different judgments in same situations. For example, although the Employment Contract Law stipulates the three characteristics of labor dispatch (temporary, auxiliary, or substitutive work), it does not stipulate what the legal consequences are if a labor dispatch does not conform to the three characteristics (or one or two of them), causing inconsistency of the judgments of courts around the country.

In this book, I try a new method of legal practice interpretation, presenting complex legal practice problems to readers in the form of concise question-and-answer articles, using a large number of court decisions as evidence to answer the reader’s “What should I do?” practical issues. Because this is the meaning of law, no matter how unclear the law is and how complex the facts of a case are, people are most concerned about knowing a concise “What should I do?” with the legal and case law basis, just as they consult a lawyer.

The question-and-answer articles in this book have the following three characteristics:

First, it answers questions concisely. The explosion of knowledge and information and the limited energy of people determine that modern people should remove redundant interference information as far as possible when reading books. Each answer article in this book is composed of a brief answer, a brief legal principle or provision explanation, and a brief legal analysis combined with judicial decisions and statutory rules. I try to control the length of each article. For complex legal issues involving multiple sub-issues, I adopt a total-fraction structure, that is, a general question-and-answer article consists of brief of multiple sub-issues with their question-titles linking to sub-issue articles. Readers can get a general answer from the former, and then selectively read the latter to get a detailed explanation of the sub-issues. This expression structure may reduce the legal jargon in the eyes of ordinary people.

Second, it gives the answer supported by a large number of court cases. Employment law is likely to be the law department with the most conflicts and blind spots among all legal departments in China. A readers who merely rely on legal rules to seek a guide to action is likely to hit a wall. The best way is to ask the court’s judgments for answers and see how the judges decide on specific legal issues and matters in specific context. The massive case citation in this book greatly improves the coverage of practical questions and the reliability of answers. The more than 800 court decisions I cited, most of the provincial high courts and local courts, constitute a solid basis for the legal analyses of this book.

Third, it covers and presents different local laws and regulations and judicial practices in different provinces and cities. This book is intended to provide reliable practical answers to readers from all over the country, so the cases cited include courts from all over the country, and the differences in trial practice are classified and compared. Therefore, there are a lot of explanations in this book, such as “the cases of Guangdong Provincial High Court, Beijing High Court and Hebei Provincial High Court support this view”, but “Sichuan Provincial High Court and Shanghai High Court hold the opposite view”, in order to facilitate readers to understand the judicial practice in various places. This is also the necessary work to answer the “what should I do” of readers around the country.

In addition to the content of employment law itself, this book also involves some interdisciplinary practices, such as the protection of trade secrets (under intellectual property law) and non-competition issues, and under company law whether the shareholders or controllers of employers should compensate for debts arising from employment relationships with their personal assets. This book also tries to use exemplary cases to explain the implementation of the law, such as how to calculate sick pay, economic compensation and punitive damages, unused annual leave pay and so on. It also has a detailed systematic summary of some thematic issues combined with practice, such as disciplinary sanctions, position transfer, wage reduction, classification of termination of labor relations, etc.

I endeavor to objectively reveal and concisely present to readers how China’s employment law is interpreted and applied in judicial precedents, so that readers are more confident to protect their rights and interests in a simple and low-cost way, and that readers feel that the law is not so difficult and obscure that they are deterred. This book answers questions from the perspective of taking into account the interests of both employees and employers, hoping to concisely present the legal reality for them, enhance the certainty and stability of employment relations, and promote harmonious employment relations and economic and social progress.

Content of this book does not constitute specific legal advice, and I appreciate any constructive criticism and corrections from readers.

 

Dong Wang

Jan 1, 2024

This article is a part of our new book

 

“Employment Law in China: A Practical Guide. A book about “What should I do” with case laws.”

 

Stay tuned, and the book will soon be published as an electronic books!