39.Our company is not satisfied with the performance of a newly recruited employee during the probation period and has extended his probation period. Is this legal?

Answer: According to the Employment Contract Law, an employee can undergo only one probation period with a single employer. The legality of extending an employee’s probation period depends on the employee’s agreement, the nature of the extension, and whether it causes the probation period to exceed the statutory limit.

If the employer unilaterally extends the probation period without the consent of the employee, the extension is illegal. 1Wang Yueping, Guangdong Wanyin Installation Engineering Co., Ltd. Civil Judgment of Second Instance of Labor Dispute Guangzhou Intermediate People’s Court of Guangdong Province Civil Judgment (2020) Yue 01 Min Zhong 21125, No.21126, ¡°The unilateral extension of the probation period when the probation period expires violates the law.¡±If the employer stipulates or both parties agree to extend the probation period beyond the statutory probation period, the excess period is illegal. Any illegal extension of probation period shall at least be recognized as the formal employment contract period.

What is rather controversial now is the situation where both parties agree to extend a probation period, and the extension does not exceed the statutory probation period. Regarding whether this extension constitutes a change of probation period or a second probation period in violation of the Employment Contract Law, Chinese courts have differing views.

The courts, including the Shanghai High Court, the Shenzhen Intermediate Court, the Xianyang Intermediate Court of Shaanxi Province, and the Hangzhou and Jinhua Intermediate Courts of Zhejiang Province, held that the extension of a probation period agreed by both parties is legal and effective as long as the whole probationary period does not exceed the statutory time limit.2Civil Ruling on Trial and Supervision of Other Labor Disputes between Zhang Jianqiao and Shanghai Huanyue Garment Co., Ltd. Civil Ruling of Shanghai High Court (2018) Hu Min Shen No.2786. ¡°The probation period originally agreed by Zhang Jianqiao and Huanyue Company is 3 months. Although it has been extended since then, the reason for the extension is that Zhang Jianqiao’s work performance was not good and further investigation is needed. The extended probation period does not exceed the statutory period, and the wages of Zhang Jianqiao has not been reduced during the probation period. All have been consented by Zhang Jianqiao himself.¡± Labor Dispute Appeal between Hua Xiaolong and Zhongyan Xinshangmeng Electronic Commerce Co., Ltd. Civil Judgment of Hangzhou Intermediate People’s Court of Zhejiang Province (2015) Zhe Hang Min Zhong Zi No.3127. Liu Dan and Shenzhen Market and Quality Supervision and Administration Commission Labor Dispute Appeal Case Civil Judgment of Shenzhen Intermediate People’s Court of Guangdong Province (2017) Yue 03 Min Zhong No.3849. Civil Judgment of the Labor Dispute Case between Fu Shaofeng and China Gezhouba Group No.3 Engineering Co., Ltd. Civil Judgment of the Intermediate People’s Court of Xianyang City, Shaanxi Province (2019) Shan 04 Min Zhong No.784. The two parties re-signed a permanent employment contract and changed the probation period from 2 months to 6 months, which was found to be legal by the court. Civil Judgment of the Second Instance of the Labor Dispute between Hua Xiaoming and Pujiang Changzhu Huazhen Real Estate Co., Ltd. Civil Judgment of the Intermediate People’s Court of Jinhua City, Zhejiang Province (2020) Zhe 07 Min Zhong No.4315. ¡°The appellant agrees to extend the probation period voluntarily, because the total probation period after the extension is still within the legal period (not more than six months). Therefore, the first instance decision is not improper in finding that it did not constitute employer providing for multiple probationary periods for the same employee, and that the probation period agreement between the two parties was legal and effective.¡±However, the courts, including Beijing High Court, Xiamen Intermediate Court of Fujian Province, and Guangzhou Intermediate Court, have decisions ruling that the extension of the probation period is equivalent to a second probation period in disguise, so that the agreement to extend the probation period is invalid.3Fazhijin Information Technology Co., Ltd. v. Wu Qinghua Labor Dispute Civil Ruling of Beijing High Court (2017) Jing Min Shen No.1290. Labor Dispute between Tan Chusi and Xiamen Zhongjin Machinery Co., Ltd. and Xiamen Honghai Machinery Co., Ltd. Civil Judgment of Xiamen Intermediate People’s Court of Fujian Province (2015) XMZZ No.2434. Civil Judgment of Second Instance on the Labor Dispute between Taiji Aisi (China) Investment Co., Ltd. and Yu Jiao Civil Judgment of Intermediate People’s Court of Guangzhou City, Guangdong Province (2017) Yue 01 Min Zhong No. 22937. In the case, both parties agreed to extend the three-month probation period of the three-year fixed-term contract to six months, and the court held that such extension was illegal. Civil Judgment of the Second Instance of Labor Dispute between Lingtu Education Consulting (Beijing) Co., Ltd. and Wang Xiuhua Civil Judgment of the First Intermediate People’s Court of Beijing (2020) Jing 01 Min Zhong No.5195. ¡°Regardless of whether Lingtu Education Consulting (Beijing) Co., Ltd. and Wang Xiuhua have reached an agreement on the extension of the probation period, the act of re-agreeing on the probation period has violated the mandatory provisions of law.¡±

There are two legal consequences of illegally extending the probation period. The first consequence is that the employer should pay damages at the monthly wages of the last month’s probation period during the extended period that has been fulfilled.4Article 83 of the Employment Contract Law of the People’s Republic of China stipulates that if an employer violates the provisions of this Law on providing for probation period with their employees, the labor administrative department shall order it to make corrections; if the probation period agreed upon in violation of the law has been fulfilled, the employer shall pay damages to the worker for the period that has been fulfilled beyond the statutory probation period based on the monthly wage of the worker at the end of the probation period.For example, Mr. Li signed a permanent contract with the employer, which stipulated that the probation period was six months and the wage during the probation period was RMB 4,000, but the employer later stipulated that the probation period should be extended for three months, so the employer should pay Mr. Li RMB 12,000 (3 * 4000) as the damages for violating the provisions of probation period.

The second consequence is that the extension period should be recognized as the formal contract period. Article 20 of the Employment Contract Law stipulates that the wage during the probation period shall not be less than 80% of the formal period, so in practice there may be two kinds of disputes.

The first dispute is that the employee claims that the wage during the probation period is too low, and thus the wage during the extended period does not reach the wage level in formal contract period. For example, in the case of Mr. Zhang mentioned above, the monthly wage in formal contract period agreed by the employer is RMB 6,000, while only RMB 4,000 is paid to the employee during the nine-month probation period (not reaching 80% of formal period wages, RMB 4,800). Then the employer shall make up the wage of Mr. Li during the probation period of six months and the wage of Mr. Li during the extended period of three months (i.e., the formal period), which is (6000 * 80% -4000) * 6 + (6000-4000) * 3 = RMB 10,800. Of course, at this time, the employer is still obligated to pay Mr. Li’s damages of RMB 14,400 (6000 * 80% * 3).

The second dispute is whether it is reasonable for employees to claim that the wage of the extended period (i.e. The formal period) should be paid 1.25 times (i.e. 100/80) higher than that of the probation period when the probational wage is the same as or close to the wage of the formal period. This is a very obscure question. At present, the court has two understandings of this situation, one is that the formal wage of an employee should be 1.25 times the wage of probation period,5He Yingze and Changchun Boxun Biotechnology Co., Ltd. Civil Judgment of Second Instance of Labor Dispute Civil Judgment of Changchun Intermediate People’s Court of Jilin Province (2022) Ji 01 Min Zhong No.3401. ¡°Boxun Company pays RMB 1,810.00 to He Yingze according to the wage standard during the probation period. Therefore, the basic wage for He Yingze after he becoming a formal staff should be RMB 2,262.50.¡±and the employer should make up for the insufficient part of the wage during the extension period. Another understanding is that a same wage during the probation period as the formal period wage does not violate the legal requirement, since the law provides that the wage during the probation period should not be less than 80% of the wage during the formal period, and the wage in the probation period has reached 100% of the official period.6Wang Shougan and Suzhou Quanchuang Human Resources Co., Ltd., Suzhou Training Center of Taihu Basin Administration, Labor Dispute Appeal, Application for Civil Ruling, Civil Ruling of Jiangsu Provincial People¡¯s High Court (2018) Sumin Shen No.5182.

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  • 1
    Wang Yueping, Guangdong Wanyin Installation Engineering Co., Ltd. Civil Judgment of Second Instance of Labor Dispute Guangzhou Intermediate People’s Court of Guangdong Province Civil Judgment (2020) Yue 01 Min Zhong 21125, No.21126, ¡°The unilateral extension of the probation period when the probation period expires violates the law.¡±
  • 2
    Civil Ruling on Trial and Supervision of Other Labor Disputes between Zhang Jianqiao and Shanghai Huanyue Garment Co., Ltd. Civil Ruling of Shanghai High Court (2018) Hu Min Shen No.2786. ¡°The probation period originally agreed by Zhang Jianqiao and Huanyue Company is 3 months. Although it has been extended since then, the reason for the extension is that Zhang Jianqiao’s work performance was not good and further investigation is needed. The extended probation period does not exceed the statutory period, and the wages of Zhang Jianqiao has not been reduced during the probation period. All have been consented by Zhang Jianqiao himself.¡± Labor Dispute Appeal between Hua Xiaolong and Zhongyan Xinshangmeng Electronic Commerce Co., Ltd. Civil Judgment of Hangzhou Intermediate People’s Court of Zhejiang Province (2015) Zhe Hang Min Zhong Zi No.3127. Liu Dan and Shenzhen Market and Quality Supervision and Administration Commission Labor Dispute Appeal Case Civil Judgment of Shenzhen Intermediate People’s Court of Guangdong Province (2017) Yue 03 Min Zhong No.3849. Civil Judgment of the Labor Dispute Case between Fu Shaofeng and China Gezhouba Group No.3 Engineering Co., Ltd. Civil Judgment of the Intermediate People’s Court of Xianyang City, Shaanxi Province (2019) Shan 04 Min Zhong No.784. The two parties re-signed a permanent employment contract and changed the probation period from 2 months to 6 months, which was found to be legal by the court. Civil Judgment of the Second Instance of the Labor Dispute between Hua Xiaoming and Pujiang Changzhu Huazhen Real Estate Co., Ltd. Civil Judgment of the Intermediate People’s Court of Jinhua City, Zhejiang Province (2020) Zhe 07 Min Zhong No.4315. ¡°The appellant agrees to extend the probation period voluntarily, because the total probation period after the extension is still within the legal period (not more than six months). Therefore, the first instance decision is not improper in finding that it did not constitute employer providing for multiple probationary periods for the same employee, and that the probation period agreement between the two parties was legal and effective.¡±
  • 3
    Fazhijin Information Technology Co., Ltd. v. Wu Qinghua Labor Dispute Civil Ruling of Beijing High Court (2017) Jing Min Shen No.1290. Labor Dispute between Tan Chusi and Xiamen Zhongjin Machinery Co., Ltd. and Xiamen Honghai Machinery Co., Ltd. Civil Judgment of Xiamen Intermediate People’s Court of Fujian Province (2015) XMZZ No.2434. Civil Judgment of Second Instance on the Labor Dispute between Taiji Aisi (China) Investment Co., Ltd. and Yu Jiao Civil Judgment of Intermediate People’s Court of Guangzhou City, Guangdong Province (2017) Yue 01 Min Zhong No. 22937. In the case, both parties agreed to extend the three-month probation period of the three-year fixed-term contract to six months, and the court held that such extension was illegal. Civil Judgment of the Second Instance of Labor Dispute between Lingtu Education Consulting (Beijing) Co., Ltd. and Wang Xiuhua Civil Judgment of the First Intermediate People’s Court of Beijing (2020) Jing 01 Min Zhong No.5195. ¡°Regardless of whether Lingtu Education Consulting (Beijing) Co., Ltd. and Wang Xiuhua have reached an agreement on the extension of the probation period, the act of re-agreeing on the probation period has violated the mandatory provisions of law.¡±
  • 4
    Article 83 of the Employment Contract Law of the People’s Republic of China stipulates that if an employer violates the provisions of this Law on providing for probation period with their employees, the labor administrative department shall order it to make corrections; if the probation period agreed upon in violation of the law has been fulfilled, the employer shall pay damages to the worker for the period that has been fulfilled beyond the statutory probation period based on the monthly wage of the worker at the end of the probation period.
  • 5
    He Yingze and Changchun Boxun Biotechnology Co., Ltd. Civil Judgment of Second Instance of Labor Dispute Civil Judgment of Changchun Intermediate People’s Court of Jilin Province (2022) Ji 01 Min Zhong No.3401. ¡°Boxun Company pays RMB 1,810.00 to He Yingze according to the wage standard during the probation period. Therefore, the basic wage for He Yingze after he becoming a formal staff should be RMB 2,262.50.¡±
  • 6
    Wang Shougan and Suzhou Quanchuang Human Resources Co., Ltd., Suzhou Training Center of Taihu Basin Administration, Labor Dispute Appeal, Application for Civil Ruling, Civil Ruling of Jiangsu Provincial People¡¯s High Court (2018) Sumin Shen No.5182.

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