Labor Contract Law

(Adopted at the 28th Meeting of the Standing Committee of the Tenth National People's Congress on June 29, 2007)
catalogue
Chapter I General Provisions
Chapter II Conclusion of Labor Contracts
Chapter III Performance and Modification of Labor Contracts
Chapter IV Cancellation and Termination of Labor Contracts
Chapter V Special Provisions
Section I Collective Agreement
Section II Labor Dispatch
Section 3 Part time Employment
Chapter VI Supervision and Inspection
Chapter VII Legal Liabilities
Chapter VIII Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is formulated in order to improve the labor contract system, clarify the rights and obligations of both parties to the labor contract, protect the legitimate rights and interests of workers, and build and develop harmonious and stable labor relations.

Article 2 This Law is applicable to enterprises, individual economic organizations, people run non enterprise units and other organizations (hereinafter referred to as "employing units") within the territory of the People's Republic of China that establish labor relations with workers and conclude, perform, change, dissolve or terminate labor contracts.
The conclusion, performance, modification, dissolution or termination of labor contracts by State organs, institutions, social organizations and workers who have established labor relations with them shall be governed by this Law.

Article 3 The conclusion of a labor contract shall follow the principles of legality, fairness, equality, voluntariness, consensus through consultation, honesty and credibility.
The labor contract concluded according to law is binding, and the employer and the employee shall perform the obligations agreed in the labor contract.

Article 4 The employing unit shall establish and improve labor rules and regulations in accordance with the law, and ensure that workers enjoy the right to work and perform their labor obligations.

When an employing unit formulates, amends or decides on rules and regulations or major matters directly related to the vital interests of workers, such as labor remuneration, working hours, rest and vacation, labor safety and health, insurance and welfare, employee training, labor discipline, and labor quota management, it shall discuss them with the workers' congress or all employees, put forward plans and opinions, and negotiate with the trade union or workers' representatives on an equal footing to determine.
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n the process of implementing the rules and regulations and decisions on major issues, if the trade union or the staff and workers think it is inappropriate, they have the right to propose to the employing unit to modify and improve it through consultation.

The employing unit shall publicize the rules and regulations and major decisions that directly affect the vital interests of workers, or inform workers.
Article 5 The labour administrative departments of the people's governments at or above the county level shall, together with the trade unions and the representatives of the enterprises, establish and improve a tripartite mechanism for coordinating labour relations, and jointly study and solve major problems concerning labour relations.

Article 6 A trade union shall help and guide workers to conclude and perform labor contracts with the employing unit according to law, and establish a collective negotiation mechanism with the employing unit to safeguard the legitimate rights and interests of workers.

Chapter II Conclusion of Labor Contracts

Article 7 The employing unit shall establish a labor relationship with labourers from the date of employment. The employing unit shall establish a register of employees for future reference.

Article 8 When employing labourers, the employing unit shall truthfully inform labourers of the work content, working conditions, workplace, occupational hazards, production safety, labour remuneration and other information that labourers require to know; The employer has the right to know the basic information of the employee directly related to the labor contract, and the employee shall truthfully explain it.

Article 9 When recruiting workers, the employing unit shall not detain the resident identity cards and other certificates of the workers, nor require the workers to provide guarantees or collect property from the workers under other names.

Article 10 To establish a labor relationship, a written labor contract shall be concluded.
If a labor relationship has been established but a written labor contract has not been concluded at the same time, a written labor contract shall be concluded within one month from the date of employment.
If an employer and a worker conclude a labor contract before employment, the labor relationship shall be established from the date of employment.

Article 11 Where the employing unit fails to conclude a written labor contract at the same time as the employment, and the labor remuneration agreed upon with the worker is not clear, the labor remuneration of the newly recruited worker shall be subject to the standards specified in the collective contract; If there is no collective agreement or no provision in the collective agreement, equal pay for equal work shall be implemented.

Article 12 Labor contracts are divided into fixed term labor contracts, non fixed term labor contracts and labor contracts whose term is to complete certain work tasks.

Article 13 A fixed term labor contract refers to a labor contract in which the employer and the worker agree on the time of termination of the contract.
An employer and a worker may conclude a fixed term labor contract if they reach consensus through consultation.

Article 14 A labor contract without a fixed term refers to a labor contract in which the employer and the worker agree that there is no definite termination time.

An employer and a worker may conclude an open-ended labor contract if they reach consensus through consultation. Under any of the following circumstances, if the employee proposes or agrees to renew or conclude a labor contract, an open-ended labor contract shall be concluded, except that the employee proposes to conclude a fixed-term labor contract:
（1） The laborer has worked in the employing unit for at least ten consecutive years;
（2） When the employing unit implements the labor contract system for the first time or the state-owned enterprise restructures and re concludes the labor contract, the worker has worked in the employing unit for at least ten consecutive years and is less than ten years away from the statutory retirement age;
（3） The labor contract has been concluded for two consecutive fixed term labor contracts, and the employee has not renewed the labor contract under the circumstances specified in Article 39 and Item 1 and Item 2 of Article 40 of this Law.
If the employer fails to conclude a written labor contract with the worker at the end of one year from the date of employment, it shall be deemed that the employer has concluded a open-ended labor contract with the worker.

Article 15 A labor contract whose term is to complete a certain task refers to a labor contract in which an employer and a worker agree that the term of the contract is to complete a certain task.
An employing unit and a worker may conclude a labor contract with the time limit of completing a certain task by consensus.

Article 16 A labor contract shall come into force after the employer and the worker reach an agreement through consultation, and the employer and the worker sign or seal on the text of the labor contract.

The employer and the employee shall each hold one copy of the labor contract.

Article 17 A labor contract shall contain the following clauses:
（1） The name, domicile, legal representative or principal responsible person of the employer;
（2） The name, address and number of the resident identity card or other valid identity documents of the worker;
（3） The term of the labor contract;
（4） Work content and location;
（5） Working hours, rest and vacation;
（6） Labor remuneration;
（7） Social insurance;
（8） Labor protection, working conditions and occupational hazard protection;
（9） Other matters required by laws and regulations to be included in the labor contract.

In addition to the necessary provisions specified in the preceding paragraph, the employer and the employee may agree on other matters such as probation period, training, confidentiality, supplementary insurance and welfare benefits.

Article 18 If the labor contract is not clear about the labor remuneration, working conditions and other standards, which causes disputes, the employing unit and the worker may renegotiate; If negotiation fails, the provisions of the collective agreement shall apply; If there is no collective contract or the collective contract does not provide for labor remuneration, equal pay for equal work shall be implemented; Where there is no collective contract or the collective contract does not stipulate standards such as working conditions, the relevant provisions 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 shall not exceed one month; If the term of a labor contract is more than one year but less than three years, the probation period shall not exceed two months; For labor contracts with a fixed term of more than three years or with no fixed term, the probation period shall not exceed six months.
The same employer and the same worker can only agree on one probation period.
A labor contract whose term is to complete a certain task or whose term is less than three months may not stipulate a probation period.
The probation period is included in the term of the labor contract. If a labor contract only stipulates a probation period, the probation period shall not be established and shall be the term of the labor contract.

Article 20 The wages of labourers during the probation period shall not be lower than the lowest wage for the same position of the unit or 80% of the wages agreed in the labor contract, and shall not be lower than the minimum wage standard in the place where the employing unit is located.

Article 21 During the probation period, the employing unit may not rescind the labor contract unless the worker has the circumstances specified in Article 39 and Items 1 and 2 of Article 40 of this Law. If the employer terminates the labor contract during the probation period, it shall explain the reason to the worker.

Article 22 Where an employing unit provides special training fees for labourers and provides them with professional and technical training, it may enter into an agreement with the labourer on the term of service.

If a worker violates the agreement on the service period, he shall pay liquidated damages to the employing unit in accordance with the agreement. The amount of liquidated damages shall not exceed the training expenses provided by the employing unit. The liquidated damages required to be paid by the employer shall not exceed the training expenses that should be shared for the part of the service period that has not been performed.

If the employer and the employee agree on a service period, it shall not affect the increase of the labor remuneration of the employee during the service period in accordance with the normal wage adjustment mechanism.

Article 23 The Employer and the employee may agree in the labor contract to keep the Employer's business secrets and confidential matters related to intellectual property rights.

For the employee who has the obligation of confidentiality, the employer may agree with the employee on the non competition clause in the labor contract or confidentiality agreement, and agree to give the employee economic compensation on a monthly basis within the non competition period after the labor contract is dissolved or terminated. If a worker violates the non competition agreement, he shall pay liquidated damages to the employing unit in accordance with the agreement.

Article 24 The persons subject to non competition shall be limited to the senior managers, senior technicians and other personnel of the employing unit who are obligated to keep confidential. The scope, region and duration of the restriction on business strife shall be agreed upon by the employer and the worker, and the agreement on the restriction on business strife shall not violate the provisions of laws and regulations.
After the cancellation or termination of the labor contract, the period of non competition for the personnel specified in the preceding paragraph to other employers that are competitive with their own units in producing or operating similar products or engaging in similar businesses, or to start their own business to produce or operate similar products or engage in similar businesses, shall not exceed two years.

Article 25 Except for the circumstances specified in Articles 22 and 23 of this Law, the employing unit may not agree with the worker that the worker shall bear the liquidated damages.

Article 26 The following labor contracts are invalid or partially invalid:
（1） Causing the other party to conclude or change the labor contract against its true intention by means of fraud, coercion or taking advantage of the other party's difficulties;
（2） The employer exempts itself from its legal responsibilities and excludes the rights of workers;
（3） Violating the mandatory provisions of laws and administrative regulations.

If there is a dispute over the invalidity or partial invalidity of a labor contract, it shall be confirmed by a labor dispute arbitration institution or a people's court.

Article 27 Where a part of a labor contract is invalid and does not affect the validity of the other parts, the other parts remain valid.

Article 28 If a labor contract is confirmed to be invalid and the worker has already worked, the Employer shall pay the worker remuneration. The amount of labor remuneration shall be determined by reference to the labor remuneration of workers in the same or similar positions of the unit.

Chapter III Performance and Modification of Labor Contracts

Article 29 The employing unit and the worker shall fully perform their respective obligations in accordance with the provisions of the labor contract.

Article 30 The employing unit shall, in accordance with the provisions of the labor contract and the provisions of the State, pay labourers remuneration in full and on time.

If the employer defaults or fails to pay the labor remuneration in full, the worker may apply to the local people's court for a payment order according to law, and the people's court shall issue a payment order according to law.

Article 31 The employing unit shall strictly implement the labor quota standards and shall not force or in disguised form force workers to work overtime. Where an employing unit arranges for overtime work, it shall pay overtime pay to the workers in accordance with the relevant provisions of the State.

Article 32 Where a worker refuses to be instructed or forced to work at risk by the management personnel of the employing unit in violation of regulations, it shall not be deemed as a violation of the labor contract.
Labourers shall have the right to criticize, inform and accuse the employing units of working conditions that endanger their life safety and health.

Article 33 The change of the name, legal representative, main responsible person or investor of the employing unit shall not affect the performance of the labor contract.

Article 34 In the event of a merger or division of an employing unit, the original labor contract shall continue to be effective, and the labor contract shall continue to be performed by the employing unit that inherits its rights and obligations.

Article 35 The Employer and the employee may change the contents of the labor contract if they reach an agreement through consultation. The alteration of a labor contract shall be made in writing.
The employer and the employee shall each hold one copy of the revised labor contract.

Chapter IV Cancellation and Termination of Labor Contracts

Article 36 The employing unit and the worker may terminate the labor contract if they reach consensus through consultation.

Article 37 A worker may terminate his labor contract by giving a written notice to the employing unit 30 days in advance. A worker may terminate the labor contract by notifying the employing unit three days in advance during the probation period.

Article 38 Under any of the following circumstances, an employee may terminate his labor contract:
（1） Failing to provide labor protection or working conditions as agreed in the labor contract;
（2） Failing to pay labor remuneration in full and on time;
（3） Failing to pay social insurance premiums for workers according to law;
（4） The rules and regulations of the employing unit violate the provisions of laws and regulations and damage the rights and interests of workers;
（5） The labor contract is invalid due to the circumstances specified in the first paragraph of Article 26 of this Law;
（6） Other circumstances under which the labor contract may be terminated as stipulated by laws and administrative regulations.
If the employing unit forces workers to work by means of violence, threat or illegal restriction of personal freedom, or if the employing unit commands or forces workers to work at risk in violation of rules and regulations, which endangers their personal safety, the worker may immediately terminate the labor contract without informing the employing unit in advance.

Article 39 In any of the following circumstances, the Employer may terminate the labor contract:
（1） It is proved that the employee does not meet the employment conditions during the probation period;
（2） Seriously violating the rules and regulations of the employing unit;
（3） Serious dereliction of duty or malpractice for personal gain, causing great damage to the employing unit;
（4） The laborer establishes labor relations with other employing units at the same time, which has a serious impact on the completion of the work tasks of his own unit, or refuses to correct after being proposed by the employing unit;
（5） The labor contract is invalid due to the circumstances specified in Item 1 of Paragraph 1 of Article 26 of this Law;
（6） Being investigated for criminal responsibility according to law.

Article 40 Under any of the following circumstances, the employing unit may terminate the labor contract by notifying the worker himself in writing 30 days in advance or by paying the worker an additional month's wages:
（1） The laborer is unable to engage in his original work or other work arranged by the employing unit after the expiration of the prescribed medical treatment period due to illness or non work related injury;
（2） Labourers are not competent for their jobs and are still not competent after training or job adjustment;
（3） The objective conditions on which the labor contract is based at the time of conclusion have changed significantly, which makes it impossible to perform the labor contract, and the employer and the worker fail to reach an agreement on changing the content of the labor contract through consultation.

Article 41 Under any of the following circumstances, if it is necessary to reduce more than 20 employees or reduce less than 20 employees, but accounting for more than 10% of the total number of employees of the enterprise, the employing unit shall report to the trade union or