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 Formation of Labor Contracts

Chapter III Fulfillment and Change of Labor Contracts

Chapter IV Dissolution and Termination of Labor Contracts

Chapter V Special Provisions

Section 1 Collective Contract

Section 2 Worker 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 for the purposes of improving the labor contractual system, clarifying the rights and obligations of both parties of labor contracts, protecting the legitimate rights and interests of employees, and establishing and developing a harmonious and stable employment relationship.

Article 2 This Law shall apply to the establishment of employment relationship between employees and enterprises, individual economic organizations, private non-enterprise entities, or other organizations (hereafter referred to as employers), and to the formation, fulfillment, change, dissolution, or termination of labor contracts.

The state organs, public institutions, social organizations, and their employees among them there is an employment relationship shall observe this Law in the formation, fulfillment, change, dissolution, or termination of their labor contracts.

Article 3 The principle of lawfulness, fairness, equality, free will, negotiation for agreement and good faith shall be observed in the formation of a labor contract.

A labor contract concluded according to the law shall have a binding force. The employer and the employee shall perform the obligations as stipulated in the labor contract.

Article 4 An employer shall establish a sound system of employment rules so as to ensure that its employees enjoy the labor rights and perform the employment obligations.

Where an employer formulates, amends or decides rules or important events concerning the remuneration, working time, break, vacation, work safety and sanitation, insurance and welfare, training of employees, labor discipline, or management of production quota, which are directly related to the interests of the employees, such rules or important events shall be discussed at the meeting of employees' representatives or the general meeting of all employees, and the employer shall also put forward proposals and opinions to the employees and negotiate with the labor union or the employees' representatives on a equal basis to reach agreements on these rules or events.

During the process of execution of a rule or decision about an important event, if the labor union or the employees deems it improper, they may require the employer to amend or improve it through negotiations.

The employer shall make an announcement of the rules and important events which are directly related to the interests of the employees or inform the employees of these rules or events.

Article 5 The labor administrative department of the people's government at the county level or above shall, together with the labor union and the representatives of the enterprise, establish a sound three-party mechanism to coordinate employment relationship and shall jointly seek to solve the major problems related to employment relations.

Article 6 The labor union shall assist and direct the employees when they conclude with the employers and fulfill labor contracts and establish a collective negotiation mechanism with the employers so as to maintain the lawful rights and interests of the employees.

Chapter II Formation of Labor Contracts

Article 7 An employer establishes an employment relationship with an employee from the date when the employer puts the employee to work. The employer shall prepare a roster of employees for inspection.

Article 8 When an employer hires an employee, it shall faithfully inform him of the work contents, conditions and location, occupational harm, work safety state, remuneration, and other information which the employee requires to be informed. The employer has the right to know the basic information of the employer which is directly related to the labor contract and the employee shall faithfully provide such information.

Article 9 When an employer hires an employee, it shall not detain his identity card or other certificates, nor require him to provide a guaranty or collect money or property from him under any other excuse.

Article 10 A written labor contract shall be concluded in the establishment of an employment relationship.

Where an employment relationship has already been established with an employee but no written labor contract has been entered simultaneously, a written labor contract shall be concluded within one month from the date when the employee begins to work.

Where an employer and an employee conclude a labor contract prior to the employment, the employment relationship is established from the date when the employee begins to work.

Article 11 Where an employer fails to conclude a written labor contract when the employer put his employee to work, if the remuneration stipulated between the employer and the employee is not clear, the remuneration to the new employee shall conform to the provisions of the collective contract. If there is no collective contract or if there is no such stipulation in the collective contract, the principle of equal pay for equal work shall be observed.

Article 12 Labor contracts are classified into fix-term labor contracts, labor contracts without a fixed term, and the labor contracts that set the completion of specific tasks as the term to end contracts.

Article 13 A fixed-term labor contract refers to a labor contract in which the employer and the employee stipulate the time of termination of the contract.

The employer and the employee may conclude a fixed-term labor contract upon negotiation.

Article 14 A labor contract without a fixed term refers to a labor contract in which the employer and the employee stipulate no certain time to end the contract.

An employer and an employee may, through negotiations, conclude a labor contract without a fixed term. Under any of the following circumstances, if the employee proposes or agrees to renew or conclude a labor contract, a labor contract without a fixed term shall be concluded unless the employee proposes to conclude a fixed-term labor contract:

1. The employee has already worked for the employer for 10 full years consecutively;

2. When the employer initially adopts the labor contract system or when a state-owned enterprise re-concludes the labor contract due to restructuring, the employee has already worked for this employer for 10 full years consecutively and he attains to the age which is less than 10 years up to the statutory retirement age; or

3. The labor contract is to be renewed after two fixed-term labor contracts have been concluded consecutively, and the employee is not under any of the circumstances as mentioned in Article 39 and Paragraphs (1) and (2) of Article 40 of this Law.

If the employer fails to sign a written labor contract with an employee after the lapse of one full year from the date when the employee begins to work, it shall be deemed that the employer and the employee have concluded a labor contract without a fixed term.

Article 15 A labor contract that sets the completion of a specific task as the term to end the contract refers to the labor contract in which the employer and the employee stipulate that the time period of the contract shall be based on the completion of a specific task.

An employer and an employee may, upon negotiation, conclude a labor contract that sets the completion of a specific task to end the contract.

Article 16 A labor contract shall be agreed with by the employer and the employee and shall come into effect after the employer and the employee affix their signatures or seals to the labor contract.

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

Article 17 A labor contract shall include the following clauses:

1. The employer's name, domicile, legal representative, or major person-in-charge;

2. The employee's name, domicile, identity card number, or other valid identity certificate number;

3. The time limit for the labor contract;

4. The job descriptions and work locations;

5. The work hours, break time, and vocations;

6. The remunerations;

7. The social security;

8. The employment protection, work conditions, and protection against and prevention of occupational harm; and

9. Other items that shall be included in the labor contract under any laws or regulations.

Apart from the essential clauses as prescribed in the preceding paragraph, the employer and the employee may, in the labor contract, stipulate the probation time period, training, confidentiality, supplementary insurances, welfares and benefits, and other items.

Article 18 If remunerations, work conditions, and other criterions are not expressly stipulated in a labor contract and a dispute is triggered, the employer and the employee may re-negotiate the contract. If no agreement is reached through negotiations, the provisions of the collective contract shall be followed. If there is no collective contract or if there is no such stipulation about the remuneration, the principle of equal pay for equal work shall be observed. If there is no collective contract or if there is no such stipulation about the work conditions and other criterions in the collective contract, the relevant provisions of the state shall be followed.

Article 19 If the term of a labor contract is not less than 3 months but less than 1 year, the probation period shall not exceed one month. If the term of a labor contract is not less than one year but less than 3 years, the probation period shall not exceed 2 months. For a labor contract with a fixed term of 3 years or more or without a fixed term, the probation term shall not exceed 6 months.

An employer can only impose one probation time period on an employee.

For a labor contract that sets the completion of a specific task as the term to end the contract or with a fixed term of less than 3 months, no probation period may be stipulated.

The probation period shall be included in the term of a labor contract. If a labor contract only provides the term of probation, the probation shall be null and void and the term of the probation shall be treated as the term of the labor contract.

Article 20 The wage of an employee during the probation period shall not be lower than the minimum wage for the same position of the same employer or lower than 80% of the wage stipulated in the labor contract, nor may it be lower than the minimum wage of the locality where the employer is located.

Article 21 During the probation period, except when the employee is under any of the circumstances as described in Article 39 and Article 40(i) and (ii), the employer shall not dissolve the labor contract. If an employer dissolves a labor contract during the probation period, it shall make an explanation.

Article 22 Where an employer pays special training expenses for the special technical training of his employees, the employer may enter an agreement with his employees to specify their service time period.

If an employee violates the stipulation regarding the service time period, he shall pay the employer a penalty for breach of contract. The amount of penalty for breach of contract shall not exceed the training fees provided by the employer. The penalty for breach of a contract in which the employer requires the employee to pay shall not exceed the training expenses attributable to the service time period that is unfulfilled.

The service time period stipulated by the employer and the employee does not affect the promotion of the remuneration of the employee during the probation period under the normal wage adjustment mechanism.

Article 23 An employer may enter an agreement with his employees in the labor contract to require his employees to keep the business secrets and intellectual property of the employer confidential.

For an employee who has the obligation of keeping confidential, the employer and the employee may stipulate non-competition clauses in the labor contract or in the confidentiality agreement and come to an agreement that, when the labor contract is dissolved or terminated, the employee shall be given economic compensations within the non-competition period. If the employee violates the stipulation of non-competition, it shall pay the employer a penalty for breaching the contract.

Article 24 The persons who should be subject to non-competition shall be limited to the senior mangers, senior technicians, and the other employees, who have the obligation to keep secrets, of employers. The scope, geographical range and time limit for non-competition shall be stipulated by the employer and the employee. The stipulation on non-competition shall not be contrary to any laws or regulations.

After the dissolution or termination of a labor contract, the non-competition period for any of the persons as mentioned in the preceding paragraph to work in any other employer producing or engaging in products of the same category or engaging in business of the same category as this employer shall not exceed two years.

Article 25 Except for the circumstances as prescribed in Articles 22 and 23 of this Law, the employer shall not stipulate with the employee that the employee shall pay the penalty for breaching contract.

Article 26 The following labor contracts are invalid or are partially invalid if:

1. a party employs the means of deception or coercion or takes advantage of the other party's difficulties to force the other party to conclude a labor contract or to make an amendment to a labor contract, which is contrary to his will;

2. an employer disclaims its legal liability or denies the employee's rights; or

3. the mandatory provisions of laws or administrative regulations are violated.

If there is any dispute over the invalidating or partially invalidating of a labor contract, the dispute shall be settled by the labor dispute arbitration institution or by the people's court.

Article 27 The invalidity of any part of a labor contract does not affect the validity of the other parts of the contract. The other parts shall still remain valid.

Article 28 If a labor contract has been confirmed to be invalid, the employer shall pay remunerations to his employees who have labored for the employer. The amount of remunerations shall be determined by analogy to the remuneration to the employees taking up the same or similar positions of the employer.

Chapter III Fulfillment and Change of Labor Contracts

Article 29 An employer and an employee shall, according to the stipulations of the labor contract, fully perform their respective obligations.

Article 30 An employer shall, under the contractual stipulations and the provisions of the state, timely pay its employees the full amount of remunerations.

Where an employer defers paying or fails to pay the full amount of remunerations, the employees may apply to the local people's court for an order of payment. The people's court shall issue an order of payment according to the law.

Article 31 An employer shall strictly execute the criterion on production quota, it shall not force any of its employees to work overtime or make any of his employees to do so in a disguised form. If an employer arranges overtime work, it shall pay its employee for the overtime work according to the relevant provisions of the state.

Article 32 If an employee refuses to perform the dangerous operations ordered by the manager of his employer who violates the safety regulations or forces the employee to risk his life, the employee shall not be deemed to have violated the labor contract.

An employee may criticize, expose to the authorities, or charge against the employer if the work conditions may endanger his life and health.

Article 33 An employer's change of its name, legal representative, key person-in-charge, or investor shall not affect the fulfillment of the labor contracts.

Article 34 In case of merger or split the original labor contracts of the employer still remain valid. Such labor contracts shall be performed by the new employer who succeeds the rights and obligations of the aforesaid employer.

Article 35 An employer and an employee may modify the contents stipulated in the labor contract if they so agree upon negotiations. The modifications to the labor contract shall be made in writing.

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

Chapter IV Dissolution and Termination of Labor Contracts

Article 36 An employer and an employee may dissolve the labor contract if they so agree upon negotiations.

Article 37 An employee may dissolve the labor contract if he notifies in writing the employer 30 days in advance. During the probation period, an employee may dissolve the labor contract if he notifies the employer 3 days in advance.

Article 38 Where an employer is under any of the following circumstances, its employees may dissolve the labor contract:

1. It fails to provide labor protection or work conditions as stipulated in the labor contract;

2. It fails to timely pay the full amount of remunerations;

3. It fails to pay social security premiums for the employees;

4. The rules and procedures set up by the employer are contrary to any law or regulation and impair the rights and interests of the employees;

5. The labor contract is invalidated due to the circumstance as mentioned in Article 26 (1) of this Law; or

6. Any other circumstances prescribed by other laws or administrative regulations that authorize employees to dissolve labor contracts.

If an employer forces any employee to work by the means of violence, threat, or illegally restraining personal freedom, or an employer violates the safety regulations to order or forces any employee to perform dangerous operations that endanger the employee's personal life, the employee may immediately dissolve the labor contract without notifying the employer in advance.

Article 39 Where an employee is under any of the following circumstances, his employer may dissolve the labor contract:

1. It is proved that the employee does not meet the recruitment conditions during the probation period;

2. The employee seriously violates the rules and procedures set up by the employer;

3. The employee causes any severe damage to the employer because he seriously neglects his duties or seeks private benefits;

4. The employee simultaneously enters an employment relationship with other employers and thus seriously affects his completion of the tasks of the employer, or the employee refuses to make the ratification after his employer points out the problem;

5. The labor contract is invalidated due to the circumstance as mentioned in Item (1), paragraph 1, Article 26of this Law; or

6. The employee is under investigation for criminal liabilities according to law.

Article 40 Under any of the following circumstances, the employer may dissolve the labor contract if it notifies the employee in writing 30 days in advance or after it pays the employee an extra month's wages:

1. The employee is sick or is injured for a non-work-related reason and cannot resume his original position after the expiration of the prescribed time period for medical treatment, nor can he assume any other position arranged by the employer;

2. The employee is incompetent to his position or is still so after training or changing his position; or

3. The objective situation, on which the conclusion of the labor contract is based, has changed considerably, the labor contract is unable to be performed and no agreement on changing the contents of the labor contract is reached after negotiations between the employer and the employee.

Article 41 Under any of the following circumstances, if it is necessary to lay off 20 or more employees, or if it is necessary to lay off less than 20 employees but the layoff accounts for 10% of the total number of the employees, the employer shall, 30 days in advance, make an explanation to the labor union or to all its employees. After it has solicited the opinions from the labor union or of the employees, it may lay off the number of employees upon reporting the employee reduction plan to the labor administrative department:

1. It is under revitalization according to the Enterprise Bankruptcy Law;

2. It encounters serious difficulties in production and business operation;

3. The enterprise changes products, makes important technological renovation, or adjusts the methods of its business operation, and it is still necessary to lay off the number of employees after changing the labor contract; or

4. The objective economic situation, on which the labor contract is based, has changed considerably and the employer is unable to perform the labor contract.

The following employees shall be given a priority to be kept when the employer cuts down the number of employees:

1. Those who have concluded a fixed-term labor contract with a long time period

2. Those who have concluded a labor contract without fixed term; and

3. Those whose family has no other employee and has the aged or minors to support.

If the employer intends to hire new employees within 6 months after it cuts down the number of employees according to the first paragraph of this Article, it shall notify the employees cut down and shall, in the equal conditions, give a priority to the employees cut down.

Article 42 An employer shall not dissolve the labor contract under Articles 40 and 41 of this Law if any of its employee:

1. is engaging in operations exposing him to occupational disease hazards and has not undergone an occupational health check-up before he leaves his position, or is suspected of having an occupational disease and is under diagnosis or medical observation;

2. has been confirmed as having lost or partially lost his capacity to work due to an occupational disease or a work-related injury during his employment with the employer ;

3. has contracted an illness or sustained a non-work-related injury and the proscribed time period of medical treatment has not expired;

4. is a female who is in her pregnancy, confinement, or nursing period;

5. has been working for the employer continuously for not less than 15 years and is less than 5 years away from his legal retirement age; or

6.finds himself in other circumstances under which an employer shall not dissolve the labor contract as proscribed in laws or administrative regulations

Article 43 Where an employer unilaterally dissolves a labor contract, it shall notify the labor union of the reasons in advance. If the employer violates any laws, administrative regulation, or stipulations of the labor contract, the labor union has the power to require the employer to make ratification. The employer shall consider the opinions of the labor union and notify the labor union of the relevant result in writing.

Article 44 A labor contract may be terminated under any of the following circumstances:

1. the term of a labor contract has expired;

2. the employee has begun to enjoy the basic benefits of his pension;

3. the employee is deceased, or is declared dead or missing by the people's court;

4. the employer is declared bankrupt;

5. the employer's business license is revoked or the employer is ordered to close down its business or to dissolve its business entity, or the employer makes a decision to liquidate its business ahead of the schedule; or

6. other circumstances proscribed by other laws or administrative regulations.

Article 45 If a labor contract expires and it is under any of the circumstances as described in Article 42 of this Law, the term of labor contract shall be extended until the disappearance of the relevant circumstance. However, the matters relating to the termination of the labor contract of an employee who has lost or partially lost his capacity to work as prescribed in Article 42 (ii) of this Law shall be handled according to the pertinent provisions on work-related injury insurance.

Article 46 The employer shall, under any of the following circumstances, pay the employee an economic compensation:

1. The employee dissolves the labor contract in pursuance of Article 38 of this Law;

2. The employer proposes to dissolve the labor contract, and it reaches an agreement with the employee on the dissolution through negotiations;

3. The employer dissolves the labor contract according to Article 40 of this Law;

4. The employer dissolves the labor contract according to the first Paragraph of Article 41 of this Law; or

5.The termination of a fixed-term labor contract according to Article 44 (i) of this Law unless the employee refuses to renew the contract even though the conditions offered by the employer are the same as or better than those stipulated in the current contract;

6. The labor contract is terminated according to Article 44 (iv) and (v) of this Law; or

7. Other circumstances as proscribed in other laws and administrative regulations.

Article 47 An employee shall be given an economic compensation based on the number of years he has worked for the employer and at the rate of one month's wage for each full year he worked. Any period of not less than six months but less than one year shall be counted as one year. The economic compensations payable to an employee for any period of less than six months shall be one-half of his monthly wages.

If the monthly wage of an employee is higher than three times the average monthly wage of employees declared by the people's government at the level of municipality directly under the central government or at the level of a districted city where the employer is located, the rate for the economic compensations to be paid to him shall be three times the average monthly wage of employees and shall be for no more than 12 years of his work.

The term of “monthly wage” mentioned in this Article refersto the employee's average monthly wage for the 12 months prior to the dissolution or termination of his labor contract.

Article 48 If an employer dissolves or terminates a labor contract in violation of this Law but the employee demands the continuous fulfillment of the contract, the employer shall do so. If the employee does not demand the continuous fulfillment of the contract or if the continuous fulfillment of the labor contract is impossible, the employer shall pay compensation to the employee according to Article 87 of this Law.

Article 49 The State shall take measures to establish and improve a comprehensive system to ensure that the employees' social security relationship can be transferred from one region to another and can be continued after the transfer.

Article 50 At the time of dissolution or termination of a labor contract, the employer shall issue a document to prove the dissolution or termination of the labor contract and complete, within 15 days, the procedures for the transfer of the employee's personal file and social security relationship.

The employee shall complete the procedures for the handover of his work as agreed upon between both parties. If relevant provisions of this Law require the employer to pay an economic compensation, it shall make a payment upon completion of the procedures for the handover of the employee's work.

The employer shall preserve the labor contracts, which have been dissolved or terminated, for not less than two years for reference purposes.

Chapter V Special Provisions

Section 1 Collective Contracts

Article 51 The employees of an enterprise may get together as a party to negotiate with their employer to conclude a collective contract on the matters of remuneration, working hours, breaks, vacations, work safety and hygiene, insurance, benefits, etc. The draft of the collective contract shall be presented to the general assembly of employees or all the employees for discussion and approval.

A collective contract may be concluded by the labor union on behalf of the employees of enterprise with the employer. If the enterprise does not have a labor union yet, the contract may be concluded between the employer and the representatives chosen by the employees under the guidance of the labor union at the next higher level.

Article 52 The employees of an enterprise as a party may negotiate with the employer to enter specialized collective contracts regarding the issues of the work safety and hygiene, protection of the rights and interests of female employees, the wage adjustment mechanism, etc.

Article 53 Industrial or regional collective contracts may be concluded between the labor unions and the representatives of enterprises in industries such as construction, mining, catering services, etc. in the regions at or below the county level.

Article 54 After a collective contract has been concluded, it shall be submitted to the labor administrative department. The collective contract shall become effective after the lapse of 15 days from the date of receipt thereof by the labor administrative department, unless the said department raises any objections to the contract.

A collective contract that has been concluded according to law is binding on both the employer and the employees. An industrial or regional collective contract is binding on both the employers and employees in the local industry or the region.

Article 55 The standards for remunerations, working conditions, etc. as stipulated in a collective contract shall not be lower than the minimum criterions as prescribed by the local people's government. The standards for remunerations, working conditions, etc. as stipulated in the labor contract between an employer and an employee shall not be lower than those as specified in the collective contract.

Article 56 If an employer's breach of the collective contract infringes upon the labor rights and interests of the employees, the labor union may, according to law, require the employer to bear the liability. If a dispute arising from the performance of the collective contract is not resolved after negotiations, the labor union may apply for arbitration or lodge a lawsuit in pursuance of law.

Section 2 Worker Dispatch Servic

Article 57 An entity intending to engage in labor dispatch shall meet the following conditions:    

(1) its registered capital shall be no less than RMB 2,000,000 yuan;  

(2) it has fixed business premises and facilities which are suitable for its business;  

(3) it has a labor dispatch management system compliant with laws;  

(4) other conditions required by laws and administrative regulations.  

An entity intending to engage in labor dispatch shall duly apply an administrative permit with the labor administrative authority. With such permit, an entity may duly clear corresponding company registration. Without such permit, any entity or individual shall not engage in labor dispatch.

Article 58 Worker dispatch service providers are employers as mentioned in this Law and shall perform an employer's obligations for its employees. The labor contract between a worker dispatch service provider and a worker to be dispatched shall, in addition to the matters specified in Article 17of this law, specify such matters as the entity to which the worker will be dispatched, the term of dispatch, positions, etc.

The labor contracts between a worker dispatch service provider and the workers to be dispatched shall be fixed-term labor contract with a term of not less than two years. The worker dispatch service provider shall pay the remunerations on a monthly basis. During the time period when there is no work for the workers, the worker dispatch service provider shall compensate the workers on monthly basis at the minimum wage prescribed by the people's government of the place where the worker dispatch service provider is located.

Article 59 To dispatch workers, a worker dispatch service provider shall enter into dispatch agreements with the entity that accepts the workers under the dispatch arrangement (hereinafter referred to as the “accepting entity”). The dispatch agreements shall stipulate the positions to which the workers are dispatched, the number of persons to be dispatched, the term of dispatch, the amounts and terms of payments of remunerations and social security premiums, and the liability for breach of agreement.

An accepting entity shall decide with the worker service dispatch provider on the term of dispatch based on the actual requirements of the positions, and it shall not dismember a continuous term of labor use into two or more short-term dispatch agreements.

Article 60 A worker dispatch service provider shall inform the workers dispatched of the content of the dispatch agreements.

No worker dispatch service provider may skimp any remuneration that an accepting entity pays to the workers according to the dispatch agreement.

No worker dispatch service provider or accepting entity may charge any fee against any dispatched worker.

Article 61 If a worker dispatch service provider assigns a worker to an accepting entity in another region, the worker's remuneration and work conditions shall be in line with the relevant standards of the place where the accepting entity is located.

Article 62 An accepting entity shall perform the following obligations:

1. To implement state labor standards and provide the corresponding working conditions and labor protection;

2. To communicate the job requirements and labor compensations for the dispatched workers;

3. To pay overtime remunerations and performance bonuses and provide benefits relevant to the position;

4. To provide the dispatched employees who assume the positions with required training; and

5. To implement a normal wage adjustment system in the case of continuous dispatch.

No accepting entity may in turn dispatch the workers to any other employer.

Article 63 Dispatched employee has the right to equal pay for equal work with the employees in the Unit. The Unit shall deploy measures of same labor remuneration allocation to dispatched employees and employees working at the same position. Without such employees working at the same position, the Unit shall determine the remuneration of dispatched employees referring to the same or similar position in the location of the Unit.  

In respect of the labor contract entered into between the labor dispatch entity and the dispatched employee, and the labor dispatch agreement entered between the labor dispatch entity and the employer, the labor remuneration payable to the dispatched employee specified or set out there in shall comply with the previous clause.

Article 64 The workers dispatched have the right to join the labor union of the worker dispatch service provider or of the accepting entity or to organize such unions, so as to protect their own lawful rights and interests.

Article 65 A worker dispatched may, according to Articles 36 and 38 of this Law, dissolve the labor contract between him and the worker dispatch service provider.

Where a worker dispatched is under any of the circumstances as mentioned in Article 39 and Article 40 (i) and (ii), the accepting entity may return the worker to the worker dispatch service provider, the worker dispatch service provider may dissolve the labor contract with the worker.

Article 66 The employment with labor contract is the basic employment format for enterprises in China. The labor dispatch is supplementary format and may only be used for temporary, auxiliary or substitute positions.    

For purpose of the previous clause, "temporary" means a position with the employer that will not last for more than six months; "auxiliary" means a position not for principal business of the employer; and "substitute" means a position that can be taken by the dispatched employee to replace any employee of the employer who cannot work for a period due to off‐the‐job study, leave and other reasons."   

The Unite shall strictly control the quantity of labor dispatch and shall not permit the quantity surpass one certain ratio of total quantity of employees; the specific ratio shall be prescribed by labor administrative department of the state council.

Article 67 No accepting entity may establish any worker dispatch service to dispatch the workers to itself and to its subsidiaries.

Section 3 Part-time Employments

Article 68 The “part-time employment” is a form of labor in which the remuneration is mainly calculated on hourly basis, the average working hours of a worker per day shall not exceed 4 hours, and the aggregate working hours per week for the same employer shall not exceed 24 hours.

Article 69 Both parties to a part-time employment may reach an oral agreement.

A worker who engages in part-time employment may conclude a labor contract with one or more employers, but a labor contract concluded subsequently may not prejudice the performance of a labor contract previously concluded.

Article 70 No probation period may be stipulated by both parties for a part-time employment.

Article 71 Either of the parties to part-time employment may inform the other party of the termination of labor at any time. Upon the termination of a part-time employment, the employer will pay no economic compensation to the employee.

Article 72 The criterions for the calculation of part-time employment on hourly basis shall not be lower than the minimum hourly wage prescribed by the people's government of the place where the employer is located.

The maximum remuneration settlement and payment cycle for part-time employment shall not exceed 15 days.

Chapter VI Supervision and Inspection

Article 73 The labor administrative department of the State Council shall be responsible for the supervision and inspection of the implementation of the system of labor contracts throughout the country.

The labor administrative department of the local people's governments at the county level and above shall be responsible for the supervision and inspection of the implementation of the system of labor contracts within their respective administrative areas.

During the supervision and inspection of the implementation of the system of labor contracts, the labor administrative departments of the people's governments at the county level and above shall solicit the opinions of the labor unions, enterprise representatives and relevant industrial administrative departments.

Article 74 The labor administrative department of the local people's government at the county level or above shall exercise supervision and inspection in respect of the implementation of the system of labor contracts:

1. The employers' formulation of rules and regulations directly related to the interests of workers, and the implementation thereof;

2. The formation and dissolution of labor contracts by employers and workers;

3. The compliance with relevant regulations on dispatch by worker dispatch service providers and the accepting entities;

4.The employers' compliance with provisions of the state on workers' working hours, breaks and vacations;

5. The employers' payment for remuneration as specified in the labor contracts and compliance with the minimum wage criterions;

6. The employers' participation in the social security and the payment for social security premiums; and

7. Other labor supervision matters as prescribed by laws and regulations.

Article 75 During the supervision and inspection process, the labor administrative department of the people's government at the county level or above has the power to consult the materials relevant to the labor contracts and collective contracts and to conduct on-the-spot inspections to the work places. The employers and employees shall faithfully provide pertinent information and materials.

When the functionaries of the labor administrative department conduct an inspection, they shall show their badges, exercise their duties and powers pursuant to laws and enforce the law in a well-disciplined manner.

Article 76 The relevant administrative departments of construction, health, work safety supervision and administration, etc. of the people's governments at the county level and above shall, with the scope of their respective functions, supervise and administer the employers' implementation of the system of labor contracts.

Article 77 For any employer whose lawful rights and interests are impaired, he may require the relevant department to deal with the case, apply for an arbitration, or lodge a lawsuit.

Article 78 A labor union shall protect the employees' legitimate rights and interests and supervise the employer's fulfillment of the labor contracts and collective contracts. If the employer violates any law or regulation or breaches any labor contract or collective contract, the labor union may put forward its opinions and require the employer to make ratification. If the employee applies for arbitration or lodges a lawsuit, the labor union shall support and help him in pursuance of law.

Article 79 Any organization or individual may report the violations of this law. The labor administrative departments of the people's governments at the county level and above shall timely verify and deal with such violations and shall grant awards to the meritorious persons who report the violations.

Chapter VII Legal Liabilities

Article 80 If the rules and procedure of an employer directly related to the employees' interests is contrary to any laws or regulations, the labor administration department shall order the employer to make ratification and give it a warning. If the rules and procedures cause any damage to the employees, the employer shall bear the liability for compensation.

Article 81 If the text of a labor contract provided by an employer does not include the mandatory clauses required by this Law or if an employer fails to deliver a copy of the labor contract to its employee, the labor administration department shall order the employer to make ratification. If any damage is caused to the employee, the employer shall bear the liability for compensation.

Article 82 If an employer fails to conclude a written labor contract with an employee after the lapse of more than one month but less than one year as of the day when it started using him, it shall pay to the worker his monthly wages at double amount.

If an employer fails, in violation of this Law, to conclude with an employee a labor contract without fixed term, it shall pay to the employee his monthly wage at double amount, starting from the date on which a labor contract without fixed term should have been concluded.

Article 83 If an employer stipulates the probation period with an employee to violate this Law, the labor administration department shall order the employer to make ratification. If the illegally stipulated probation has been performed, the employer shall pay compensation to the employee according to the time worked on probation beyond the statutory probation period, at the rate of the employee's monthly wage following the completion of his probation.

Article 84 Where an employer violates this Law by detaining the resident identity cards or other certificates of the employees, the labor administrative department shall order the employer to return the ID and certificates to the employees within a time limit and shall punish the employer according to the relevant laws.

Where an employer violates this Law by collecting money and property from employees in the name of guaranty or in any other excuses, the labor administrative department shall order the employer to return the said property to the employees within a time limit and fine the employer not less than 500 yuan but not more than 2,000 yuan for each person. If any damage is caused to the employees, the employer shall be liable for compensation.

When an employee dissolves or terminates the labor contract in pursuance of law, if the employer retains the archives or other articles of the employees, it shall be punished according to the provisions of the preceding paragraph.

Article 85 Where an employing entity is under any of the following circumstances, the labor administrative department shall order it to pay the remunerations, overtime remunerations or economic compensations within a time limit. If the remuneration is lower than the local minimum wage, the employer shall pay the shortfall. If payment is not made within the time limit, the employer shall be ordered to pay an extra compensation to the employee at a rate of not less than 50 percent and not more than 100 percent of the payable amount:

1. Failing to pay an employee his remunerations in full amount and on time as stipulated in the labor contract or prescribed by the state;

2. Paying an employee the wage below the local minimum wage standard;

3. Arranging overtime work without paying overtime remunerations; or

4. Dissolving or terminating a labor contract without paying the employee the economic compensation under this Law.

Article 86 Where a labor contract is confirmed invalid under Article 26of this Law and any damage is caused to the other party, the party at fault shall be liable for compensation.

Article 87 If an employer violates this Law by dissolving or terminating the labor contract, it shall pay compensation to the employee at the rate of twice the economic compensations as prescribed in Article 47of this Law.

Article 88 Where an employer is under any of the following circumstances, it shall be given an administrative punishment. If any crime is constituted, it shall be subject to criminal liabilities. If any damage is caused to the employee, the employer shall be liable for compensation:

1. To force the employee to work by violence, threat or illegal limitation of personal freedom;

2. To illegally command or force any employee to perform dangerous operations endangering the employee's life;

3. To insult, corporally punish, beat, illegally search, or restrain any employee; or

4. To cause damages to the physical or mental health of employees because of poor working conditions or severely polluted environments;

Article 89 Where an employer violates this Law by failing to issue to an employee a written certificate for the dissolution or termination of a labor contract, it shall be ordered to make a ratification by the labor administrative department. If any damage is caused to an employee, the employer shall be liable for compensation.

Article 90 Where an employee violates this Law to dissolve the labor contract, or violates the stipulations of the labor contract about the confidentiality obligation or non-competition, if any loss is caused to the employer, he shall be liable for compensation.

Article 91 Where an employer hires any employee whose labor contract with another employer has not been dissolved or terminated yet, if any loss is caused to the employer mentioned later, the employer first mentioned shall bear joint and several liability of compensation.

Article 92 If a labor dispatch entity violates this Law and engages in labor dispatch operation without permit, the labor administrative authority shall duly ban its operation, confiscate its unlawful proceeds and impose a fine no less than one time but no more than five times its unlawful proceeds, In case there is no unlawful proceeds, a fine no more than RMB 50,000 may be imposed.  

If a labor dispatch entity or an employer violates the provisions of labor dispatch of this Law, the labor administrative authority may order a rectification. If a dispatch entity or an employer does not rectify exceeding the time limit, a fine no less than RMB 5,000 and no more than RMB 10,000 shall be imposed per head. The administrative permit granted to the labor dispatch entity for operating labor dispatch shall be revoked. If any damage or loss is caused to the dispatched person, the labor dispatch entity shall be jointly and severally liable with the employer.

Article 93 Where an employer without the lawful business operation qualifications commits any violation or crime, it shall be subject to legal liabilities. If the employees have already worked for the employer, the employer or its capital contributors shall, under the relevant provisions of this Law, pay the employees remunerations, economic compensations or indemnities. If any damage is caused to the employee, it shall be liable for compensation.

Article 94 Where an individual as a business operation contractor hires employees in violation of this Law and causes any damage to any employee, the contracting organization and the individual business operation contractor shall be jointly and severally liable for compensation.

Article 95 If the labor administrative department, or any other relevant administrative department, or any of the functionaries thereof neglects its (his) duties, does not perform the statutory duties, or exercises its (his) duties in violation of law, it (he) shall be liable for compensation. The directly liable person-in-charge and other directly liable persons shall be given an administrative sanction. If any crime is constituted, they shall be subject to criminal liabilities.

Chapter VIII Supplementary Provisions

Article 96 For the formation, performance, modification, dissolution, or termination of a labor contract between a public institution and an employee under the system of employment, if it is otherwise provided for in any law, administrative regulation or by the State Council, the latter shall be followed. If there is no such provision, the relevant provisions of this Law shall be observed.

Article 97 Labor contracts concluded before the implementation of this Law and continue to exist on the implementation date of this Law shall continue to be performed. For the purposes of Item (3) of the second Paragraph of Article 14 of this Law, the number of consecutive times on which a fixed-term labor contract is concluded shall be counted from the first renewal of such contract to occur after the implementation of this Law.

If an employment relationship was established prior to the implementation of this Law without the conclusion of a written labor contract, such contract shall be concluded within one month from the date when this Law becomes effective.

If a labor contract existing on the implementation date of this Law is dissolved or terminated after the implementation of this Law and, according to Article 46of this Law, an economic compensation is payable, the number of years for which the economic compensation is payable shall be counted from the implementation date of this Law. If, under relevant effective regulations prior to the implementation of this Law, the employee is entitled to the economic compensation from the employer in respect of a period prior to the implementation of this Law, the matters shall be handled according to the relevant effective regulations at that time.

Article 98 This Law shall come into force as of January 1, 2008.