Employment Law Update

Chinese Premier Li Keqiang delivered the government’s work report during the opening meeting of the third session of China’s 12th National People’s Congress (NPC) on 5 March 2015. First taking a look back at developments over the past 12 months, the key employment-related points were as follows:

• China’s economic development progressed steadily throughout 2014. The country’s gross domestic product (GDP) reached 63.6tn yuan, representing an increase of 7.4% on the previous year.
• Employment levels remained strong, with 13.22 million urban jobs created over the year.
• The basic pension paid to retired employees by enterprises increased by 10%.
  Looking forward, Li Keqiang noted the following targets and objectives for 2015:
• Reformative measures will be adopted to solve issues in urbanisation. The household registration system will be reformed by relaxing controls on the transfer of household registration. Basic public services will be provided to individuals who have moved from rural areas to live and work in urban areas based on their residence certificates. Fees relating to residence certificates will also be removed.
• Employment and entrepreneurship will be increased and encouraged through the promotion of business development. This year, the number of university graduates will reach 7.49 million, the highest figure in history.
• Social security and residents’ income will be increased. The monthly basic pension will be raised by 27% for rural and non-working urban residents (from 55 yuan to 70 yuan). Premiums for the unemployment and work-related injury insurance schemes will be lowered.

Minutes Of A Meeting On Issues Concerning The Legal Application Of Labour Dispatch

The Shanghai Human Resource and Social Security Bureau and Shanghai High Court have publicly issued the Meeting Minutes on Several Issues concerning the Legal Application of Labour Dispatch (the “Minutes”), which took place on 31 December 2014. The Minutes clarify some vague areas of PRC Labour Law, PRC Employment Contract Law and the Interim Provisions on Labour Dispatch regarding labour dispatches, and importantly, the Minutes differentiate between labour dispatches and staff outsourcing. The key provisions of the Minutes are:

1. Labour disputes regarding whether a position can be defined as “temporary“, “auxiliary” or “substitutable” or whether the number of dispatched staff exceeds the statutory ratio do not fall under the case acceptance scope prescribed by the Law of the PRC on Mediation and Arbitration of Labour Disputes, and the labour arbitration tribunal shall not accept such cases.
2. Employees may be returned by the user to the labour dispatch company if:
   Following the employee’s return to the employer, in the case of a reasonable re-dispatch pursuant to the employment contract, if the employee fails to work in accordance with his/her employment contract, the employer may take disciplinary action in accordance with its internal rules, disciplinary procedure or under the employment contract.
   • the employee reaches the retirement age and the employment contract expires automatically;
   • the dispatch term expires; or
   • the dispatch agreement is terminated.
3. Following the employee’s return to the employer, in the case of a reasonable re-dispatch pursuant to the employment contract, if the employee fails to work in accordance with his/her employment contract, the employer may take disciplinary action in accordance with its internal rules, disciplinary procedure or under the employment contract.
4. Where the employee is returned on insufficient grounds and the employer has not re-dispatched the employee within a reasonable period of time (generally one month), the employee may terminate the employment contract referencing Article 38 of the PRC Employment Contract Law, and make a claim for financial compensation.
5. The identification of whether a situation is a labour dispatch situation or a human resource outsourcing should take into account the application of the labour user’s rules and regulations, the strength of the user’s control and direction over the employee, and other relevant factors.
   • While the labour user needs to exercise some management over the contractor’s employees due to the needs of fire control, production security, product and service quality and workplace order, etc, the labour tribunal/court should not in such circumstances simply certify that the employment relationship has transferred to the user but should instead look at the reality of the situation.
   • If the contracting agreement is not pronounced invalid and the labour user exceeds its power to manage the contractor’s employee in certain aspects which nonetheless do not amount to a decisive change to the employment relationship, the labour user should rectify the situation. Further, if the employee consequently wishes to confirm the employment relationship between him/her and the labour user, he/she should not be supported.

Local Updates On Short-Term Work Assignment Visas

Following the introduction of the Relevant Handling Procedures for Foreign Nationals’ Entry into China to Perform Short-Term Work Assignments, which became effective on 1 January 2015, the cities of Fujian, Beijing, Guangzhou, Chengdu, Shanghai, Chongqing and Dalian have locally implemented the rules by promulgating the required application documents. These are summarised as follows:

 

Fujian

 

Application Documents

 

• written application report by the company;
• non-crimes record;
• Standard Application Letter(2 originals);
• registration certificate and organisation code of the PRC cooperation party;
• the cooperation agreement and project contract between the foreign and PRC parties;
• valid passport or other international travel certificate;
• respective degree or technical (professional) qualification certificate (for foreigners who apply to complete professional and technical work assignment).

 

Application Timeline

 

5 working days

 

Beijing

 

Application Documents

 

• Standard Application Letter;
• Chinese CV;
• the cooperation agreement and project contract between the foreign and PRC parties;
• valid passport or other international travel certificate;
• degree or technical (professional) qualification certificate for professional and technical work assignment;
• business licence;
• organisation code of the applying party. 

 

Application Timeline

 

10 working days

 

Guangzhou

 

Application Documents

 

• preliminary review notice for online application;
• Standard Application Letter;
• application report for the cooperation party inviting foreigners for short-term work assignment;
• business licence and organisation code of the cooperation party.
• the cooperation agreement and project contract between the foreign and PRC parties and the invitation letter the PRC party issues to the foreign party;
• valid passport or other international travel certificate;
• the foreigner’s CV;
• professional qualification for professional and technical work. 

 

Application Timeline

 

15 working days

 

Chengdu

 

Application Documents

 

• registration certificate and organisation code of the cooperation party;
• the cooperation agreement and project contract between the foreign and PRC parties;
• the foreigner’s CV;
• valid passport or other international travel certificate;
• professional qualification for professional and technical work. 12 working days

 

Shanghai

 

Application Documents

 

• Standard Application Letter business licence and organisation code of the company;
  Chinese CV;
• the cooperation agreement and project contract;
• degree or technical (professional) qualification certificate for professional and technical work assignment;
  passport copy. 

Application Timeline

 

5 working days

 

Chongqing

 

Application Documents

 

• registration certificate and organisation code of the cooperation party;
• the cooperation agreement and project contract between the foreign and PRC parties;
• the foreigner’s CV;
• valid passport or other international travel certificate;
• professional qualification for professional and technical work. 

 

Application Timeline

 

10 working days

 

Dalian

 

Application Documents

 

• Standard Application Letter
• business licence and organisation code of the cooperation party.
• the foreigner’s CV and its Chinese translation
• the cooperation agreement and project contract
• valid passport or other international travel certificate;
• diploma certificate;
• professional qualification certificate. 

 

Application Timeline

 

15 working days